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14 Best-Performing and Cheap ESG Funds for 2026
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14 Best-Performing and Affordable ESG ETFs for 2026
With more ESG funds available than ever, investors don't have to choose between principles and cost.
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6 years of experience Expertise Investing for beginners financial advice long-term investingAlana Benson is an editor who joined NerdWallet in 2019. Historically she has covered a wide variety of investing topics including stocks, socially responsible investing, cryptocurrency, mutual funds, HSAs and financial advice. She is also a frequent contributor to NerdWallet's "Smart Money" podcast. Alana has appeared on FOX Houston and the "PennyWise" podcast and has been quoted in MarketWatch and The Sun. Before joining NerdWallet, she wrote two books on identity theft and several young adult nonfiction titles. Her work has been featured in The New York Times, The Washington Post, The Associated Press, MSN, Yahoo Finance and MarketWatch.
Alana Benson is an editor who joined NerdWallet in 2019. Historically she has covered a wide variety of investing topics including stocks, socially responsible investing, cryptocurrency, mutual funds, HSAs and financial advice. She is also a frequent contributor to NerdWallet's "Smart Money" podcast. Alana has appeared on FOX Houston and the "PennyWise" podcast and has been quoted in MarketWatch and The Sun. Before joining NerdWallet, she wrote two books on identity theft and several young adult nonfiction titles. Her work has been featured in The New York Times, The Washington Post, The Associated Press, MSN, Yahoo Finance and MarketWatch. Published in Editor & Content Strategist + more + more
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19 years of experience Expertise Retirement planning investment management investment accountsArielle O’Shea leads the investing and taxes team at NerdWallet. She has covered personal finance and investing for nearly 20 years, and was a senior writer and spokesperson at NerdWallet before becoming an editor. Previously, she was a researcher and reporter for leading personal finance journalist and author Jean Chatzky, a role that included developing financial education programs, interviewing subject matter experts and helping to produce television and radio segments. Arielle has appeared on the "Today" show, NBC News and ABC's "World News Tonight," and has been quoted in national publications including The New York Times, MarketWatch and Bloomberg News. She is based in Charlottesville, Virginia.
Arielle O’Shea leads the investing and taxes team at NerdWallet. She has covered personal finance and investing for nearly 20 years, and was a senior writer and spokesperson at NerdWallet before becoming an editor. Previously, she was a researcher and reporter for leading personal finance journalist and author Jean Chatzky, a role that included developing financial education programs, interviewing subject matter experts and helping to produce television and radio segments. Arielle has appeared on the "Today" show, NBC News and ABC's "World News Tonight," and has been quoted in national publications including The New York Times, MarketWatch and Bloomberg News. She is based in Charlottesville, Virginia. Published in Head of Content, Investing & Taxes + more + moreInvestors are increasingly considering environmental, social and governance (ESG) principles when they choose investments. And the number of ESG-focused investments, including ETFs, is growing.
Investors are increasingly considering environmental, social and governance (ESG) principles when they choose investments. And the number of ESG-focused investments, including ETFs, is growing.What is an ESG ETF?
What is an ESG ETF?ESG funds are investments that are graded using environmental, social and governance principles. ESG funds invest in companies that aim to have a positive societal impact, such as those with a small carbon footprint or diverse leadership boards.
ESG funds are investments that are graded using environmental, social and governance principles . ESG funds invest in companies that aim to have a positive societal impact, such as those with a small carbon footprint or diverse leadership boards.ESG funds are not individual stocks. They are a collection of multiple stocks grouped together. Buying a fund rather than an individual stock can decrease risk, since a fund holds shares of many companies rather than just one. ETFs work similarly to index funds and other passively managed funds, with the main difference being that ETFs can be traded throughout the day, like stocks.
ESG funds are not individual stocks. They are a collection of multiple stocks grouped together. Buying a fund rather than an individual stock can decrease risk, since a fund holds shares of many companies rather than just one. ETFs work similarly to index funds and other passively managed funds, with the main difference being that ETFs can be traded throughout the day, like stocks.Best-performing ESG ETFs
Best-performing ESG ETFsHere are some of the best-performing ESG ETFs. To compile this list, our editors screened for U.S. equity ETFs with corporate governance themes, then ranked them by one-year performance.
Here are some of the best-performing ESG ETFs. To compile this list, our editors screened for U.S. equity ETFs with corporate governance themes, then ranked them by one-year performance.The best-performing ESG corporate governance ETF by one-year return is First Trust Emerging Markets Human Flourishing ETF (FTHF), which is up 92.03%.
The best-performing ESG corporate governance ETF by one-year return is First Trust Emerging Markets Human Flourishing ETF (FTHF), which is up 92.03%.
The best-performing ESG corporate governance ETF by one-year return is First Trust Emerging Markets Human Flourishing ETF (FTHF), which is up 92.03%.Ticker
TickerCompany
CompanyPerformance (Year)
Performance (Year)FTHF
FTHFFirst Trust Emerging Markets Human Flourishing ETF
First Trust Emerging Markets Human Flourishing ETF92.03%
92.03%EMDM
EMDMFirst Trust Bloomberg Emerging Market Democracies ETF
First Trust Bloomberg Emerging Market Democracies ETF74.81%
74.81%FRDM
FRDMAlpha Architect Freedom 100 Emerging Markets ETF
Alpha Architect Freedom 100 Emerging Markets ETF72.61%
72.61%STXE
STXEStrive Emerging Markets Ex-China ETF
Strive Emerging Markets Ex-China ETF60.60%
60.60%OAEM
OAEMOneAscent Emerging Markets ETF
OneAscent Emerging Markets ETF53.46%
53.46%EMSF
EMSFMatthews Emerging Markets Sustainable Future Active ETF
Matthews Emerging Markets Sustainable Future Active ETF52.59%
52.59%NBCE
NBCENeuberger China Equity ETF
Neuberger China Equity ETF51.19%
51.19%Source: Finviz. Data is current as of May 4, 2026, and is intended for informational purposes only.
Source: Finviz. Data is current as of May 4, 2026, and is intended for informational purposes only.» Some brokers are better than others. Read our roundup of top-rated brokerages for ETFs
» Some brokers are better than others. » Some brokers are better than others. Read our roundup of top-rated brokerages for ETFsCheapest ESG funds
Cheapest ESG fundsSustainable funds used to get a bad rap for being expensive, and it's true that the funds above may carry higher expense ratios than their traditional peers. Impact investors are often willing to pay a bit more to ensure they're investing in a way that aligns with their values, but if you're also concerned with costs — and all investors should be — ETFs can provide some relief.
Sustainable funds used to get a bad rap for being expensive, and it's true that the funds above may carry higher expense ratios than their traditional peers. Impact investors are often willing to pay a bit more to ensure they're investing in a way that aligns with their values, but if you're also concerned with costs — and all investors should be — ETFs can provide some relief.To determine the cheapest ESG ETFs, we looked at corporate governance-themed funds and filtered by expense ratio.
To determine the cheapest ESG ETFs, we looked at corporate governance-themed funds and filtered by expense ratio.The lowest-cost ESG corporate governance ETF by expense ratio is TCW Transform 500 ETF (VOTE), with an expense ratio of 0.05%.
The lowest-cost ESG corporate governance ETF by expense ratio is TCW Transform 500 ETF (VOTE), with an expense ratio of 0.05%.
The lowest-cost ESG corporate governance ETF by expense ratio is TCW Transform 500 ETF (VOTE), with an expense ratio of 0.05%.Ticker
TickerCompany
CompanyNet Expense Ratio
Net Expense RatioVOTE
VOTETCW Transform 500 ETF
TCW Transform 500 ETF0.05%
0.05%USCA
USCAXtrackers MSCI USA Climate Action Equity ETF
Xtrackers MSCI USA Climate Action Equity ETF0.07%
0.07%GMUN
GMUNGoldman Sachs Access Municipal Bond ETF
Goldman Sachs Access Municipal Bond ETF0.08%
0.08%XVV
XVViShares ESG Select Screened S&P 500 ETF
iShares ESG Select Screened S&P 500 ETF0.08%
0.08%ESGV
ESGVVanguard ESG U.S. Stock ETF
Vanguard ESG U.S. Stock ETF0.09%
0.09%FEUS
FEUSFlexShares ESG & Climate US Large Cap Core Index Fund
FlexShares ESG & Climate US Large Cap Core Index Fund0.09%
0.09%IQSU
IQSUNYLI Candriam U.S. Large Cap Equity ETF
NYLI Candriam U.S. Large Cap Equity ETF0.09%
0.09%Source: Finviz. Data is current as of May 4, 2026, and is intended for informational purposes only.
Source: Finviz. Data is current as of May 4, 2026, and is intended for informational purposes only.» How much does a fund cost? Estimate a fund’s expenses with a mutual fund calculator
» How much does a fund cost? » How much does a fund cost? Estimate a fund’s expenses with a mutual fund calculatorWhat are some of the benefits of investing in ESG ETFs?
What are some of the benefits of investing in ESG ETFs?“Putting our investment dollars to work in ESG influences the behavior of the largest and most powerful multinational corporations in the world for the greater good of society," says Kenneth Chavis, a certified financial planner and senior wealth advisor at Versant Capital Management in Phoenix. “To me, this illuminates the breadth of power the everyday investor has, and is an excellent way to make a large-scale, meaningful difference,”
“Putting our investment dollars to work in ESG influences the behavior of the largest and most powerful multinational corporations in the world for the greater good of society," says Kenneth Chavis, a certified financial planner and senior wealth advisor at Versant Capital Management in Phoenix. “To me, this illuminates the breadth of power the everyday investor has, and is an excellent way to make a large-scale, meaningful difference,”But if influencing powerful companies to make meaningful change isn't a good enough reason to invest with ESG principles, there's another reason: the potential for increased performance.
But if influencing powerful companies to make meaningful change isn't a good enough reason to invest with ESG principles, there's another reason: the potential for increased performance.Morgan Stanley's most recent Sustainable Reality report shows that while ESG funds can sometimes underperform their traditional counterparts in the short term, long-term performance paints a slightly brighter picture.
Morgan Stanley's most recent Sustainable Reality report shows that while ESG funds can sometimes underperform their traditional counterparts in the short term, long-term performance paints a slightly brighter picture.The report found that if you had put $100 into an ESG fund back in 2018, that investment would be worth $162 in 2026. On the other hand, if you had put that money into a traditional fund, the investment would be worth $152 — a slightly lower return
The report found that if you had put $100 into an ESG fund back in 2018, that investment would be worth $162 in 2026. On the other hand, if you had put that money into a traditional fund, the investment would be worth $152 — a slightly lower return Morgan Stanley Institute for Institute for Sustainable Investing. Sustainable Reality. Accessed Mar 30, 2026. .» Need more information? Learn how to get started with socially responsible investing
» Need more information? » Need more information? Learn how to get started with socially responsible investingHow to choose the best ESG funds for you
How to choose the best ESG funds for youDeciding you want to invest in ESG funds adds some extra considerations you may not have when picking more conventional funds.
Deciding you want to invest in ESG funds adds some extra considerations you may not have when picking more conventional funds.1. Understand the difference between active and passive funds
1. Understand the difference between active and passive fundsActive and passive funds have different pros and cons. Make sure you know their differences before you dive in.
Active and passive funds have different pros and cons. Make sure you know their differences before you dive in.Strategy. Actively managed funds aim to beat the stock market's performance. This strategy may sound good in theory, but overall, actively managed funds often underperform their passive counterparts. Passively managed funds are also known as index funds because they are invested to reflect a specific market index, such as the S&P 500. These funds mirror the performance of the index they track.
Strategy. Strategy. Actively managed funds aim to beat the stock market's performance. This strategy may sound good in theory, but overall, actively managed funds often underperform their passive counterparts. Passively managed funds are also known as index funds because they are invested to reflect a specific market index, such as the S&P 500. These funds mirror the performance of the index they track.Cost. Keep in mind, higher fees can also negate higher returns. Many of the funds listed as "best overall" above are actively managed, whereas the funds on the low-cost list are passive. Actively managed ESG funds tend to be more expensive than passively managed funds, so if you’re looking to add sustainable investments to your portfolio with a smaller price tag, passively managed ESG funds may be a better option.
Cost. Cost. Keep in mind, higher fees can also negate higher returns. Many of the funds listed as "best overall" above are actively managed, whereas the funds on the low-cost list are passive. Actively managed ESG funds tend to be more expensive than passively managed funds, so if you’re looking to add sustainable investments to your portfolio with a smaller price tag, passively managed ESG funds may be a better option.Availability. There are far more actively managed ESG funds than passively managed ESG funds, but passively managed ESG funds are becoming more common. And while passive ESG funds have been growing in popularity, you’ll have more choices if you’re looking at active funds.
Availability. Availability. There are far more actively managed ESG funds than passively managed ESG funds, but passively managed ESG funds are becoming more common. And while passive ESG funds have been growing in popularity, you’ll have more choices if you’re looking at active funds.When choosing between active and passive funds, Chavis emphasizes that the decision depends on factors such as your investment goals, investing experience and tax situation. He also recommends consulting an investment professional during this process
When choosing between active and passive funds, Chavis emphasizes that the decision depends on factors such as your investment goals, investing experience and tax situation. He also recommends consulting an investment professional during this process2. Decide where you want to have an impact
2. Decide where you want to have an impactIn addition to checking expense ratios, make sure an ESG fund’s mission speaks to you. “An investor should look for an ESG fund that is in alignment with their goals. Let’s say social impact is of the utmost importance to you, specifically regarding diversity, equity and inclusion initiatives. You should seek a fund that rewards, in investment dollars, companies for high diversity, equity and inclusion scores on their boards, executive teams and with their employment practices,” says Chavis.
In addition to checking expense ratios, make sure an ESG fund’s mission speaks to you. “An investor should look for an ESG fund that is in alignment with their goals. Let’s say social impact is of the utmost importance to you, specifically regarding diversity, equity and inclusion initiatives. You should seek a fund that rewards, in investment dollars, companies for high diversity, equity and inclusion scores on their boards, executive teams and with their employment practices,” says Chavis.Think about whether there are particular missions you’d like to support with your investment dollars, such as clean water, renewable energy or women in leadership. If there’s an impact area that’s really important to you, that may outweigh a slightly higher expense ratio.
Think about whether there are particular missions you’d like to support with your investment dollars, such as clean water, renewable energy or women in leadership. If there’s an impact area that’s really important to you, that may outweigh a slightly higher expense ratio.3. Consider your existing investments
3. Consider your existing investmentsBefore adding any new investments to your portfolio, think about how an ESG fund would fit in. Be sure you're not overinvesting in a particular industry or asset class. If you’d like to invest in ESG funds but don’t want to choose your investments yourself, there are several robo-advisors that offer ESG portfolios for no extra charge.
Before adding any new investments to your portfolio, think about how an ESG fund would fit in. Be sure you're not overinvesting in a particular industry or asset class. If you’d like to invest in ESG funds but don’t want to choose your investments yourself, there are several robo-advisors that offer ESG portfolios for no extra charge.» See the list: Our picks for the best robo-advisors
» See the list: » See the list: Our picks for the best robo-advisors4. Understand your ESG fund’s impact
4. Understand your ESG fund’s impactMaybe you’ve added a few ESG funds to your portfolio. So how do you know if those investment dollars actually made a difference?
Maybe you’ve added a few ESG funds to your portfolio. So how do you know if those investment dollars actually made a difference?“What I would look for, and what investors should insist upon, is an impact report,” says Jon Hale, the former Global Head of Sustainability Research at Morningstar. “That will give you a way to assess the impact of a fund as an investment. Impact reports talk about things like shareholder engagement, the portfolio’s carbon footprint or gender diversity on the Boards of the companies held. That’s a good way to gain a sense of what impact you’re having as an investor.”
“What I would look for, and what investors should insist upon, is an impact report,” says Jon Hale, the former Global Head of Sustainability Research at Morningstar. “That will give you a way to assess the impact of a fund as an investment. Impact reports talk about things like shareholder engagement, the portfolio’s carbon footprint or gender diversity on the Boards of the companies held. That’s a good way to gain a sense of what impact you’re having as an investor.”ESG funds may periodically release an impact report, or you can probably request one from the fund managers.
ESG funds may periodically release an impact report, or you can probably request one from the fund managers. ADEarn 3.69% APY by investing in U.S. Treasury Bills*
Earn 3.69 % APY by investing in U.S. Treasury Bills* Maximize your cash by investing in low-risk, government-backed T-Bills. All the work is done for you — just make the deposit and watch your money grow. Learn More *Rate when held to maturity. Rate shown is subject to price fluctuations. Neither the author nor editor held positions in the aforementioned investments at the time of publication. Neither the author nor editor held positions in the aforementioned investments at the time of publication. Neither the author nor editor held positions in the aforementioned investments at the time of publication.ON THIS PAGE
What is an ESG ETF? What is an ESG ETF? Best-performing ESG ETFs Best-performing ESG ETFs Cheapest ESG funds Cheapest ESG funds What are some of the benefits of investing in ESG ETFs? What are some of the benefits of investing in ESG ETFs? How to choose the best ESG funds for you How to choose the best ESG funds for youON THIS PAGE
What is an ESG ETF? What is an ESG ETF? Best-performing ESG ETFs Best-performing ESG ETFs Cheapest ESG funds Cheapest ESG funds What are some of the benefits of investing in ESG ETFs? What are some of the benefits of investing in ESG ETFs? How to choose the best ESG funds for you How to choose the best ESG funds for you More like this Investment Basics Investing Best Robo-Advisors: Top Picks for 2026 We spent hours testing robo-advisors to find ones that charge low fees but still offer high-quality features, including automated portfolio rebalancing, exposure to a range of asset classes and financial planning tools. 2 By Alana Benson, Sabrina Parys ESG for Beginners: Environmental, Social and Governance Investing ESG, or environmental, social and governance investing, is a way to build a more ethical portfolio. Alana Benson