Non-ESG ETFs

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dopplerdave
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Non-ESG ETFs

Post by dopplerdave » Thu Oct 20, 2022 11:03 am

I have been using VTI, TLT, SHY and IAU for my PP but do not want to support the wokeness of Blackrock and Vanguard. Are there altenative ETFs that are not into the ESG movement?
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Re: Non-ESG ETFs

Post by Jack Jones » Thu Oct 20, 2022 4:21 pm

I believe non-ESG businesses will outperform ESG businesses, all else being equal, so I'm on board! How could the companies that hire based on merit and focus exclusively on their business lose to the less talented, perfectly rainbow-colored companies who split their focus between their business and the societal issues du'jour?
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Re: Non-ESG ETFs

Post by Xan » Thu Oct 20, 2022 4:28 pm

Jack Jones wrote:
Thu Oct 20, 2022 4:21 pm
I believe non-ESG businesses will outperform ESG businesses, all else being equal, so I'm on board! How could the companies that hire based on merit and focus exclusively on their business lose to the less talented, perfectly rainbow-colored companies who split their focus between their business and the societal issues du'jour?
I don't think he's asking about a non-ESG fund that invests in non-ESG companies, but rather in normal S&P 500 index funds, gold funds, long-term Treasury funds that are run by companies other than Blackrock and Vanguard (or similar).

Plenty of gold alternatives out there. Schwab has SGOL which I've used. TLT is the toughest one to replace, probably.
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Re: Non-ESG ETFs

Post by Tyler » Thu Oct 20, 2022 5:40 pm

dopplerdave wrote:
Thu Oct 20, 2022 11:03 am
Are there altenative ETFs that are not into the ESG movement?
I've also thought about this, but the trick is finding an alternative that isn't doing something similar. Look past the marketing materials and self-serving platitudes of a guy like Larry Fink, and when you get down to it providers are likely adding more ESG funds simply because they believe they're popular and it lets them charge higher fees for an extremely similar index. For example, ESGV is 3x the expense ratio of VTI for the same market.

Also, keep in mind that not every fund that a politically active company offers can or will be ESG. The investor-owned structure of Vanguard specifically makes it hard for them to change the prospectus to exclude certain companies, as I vaguely remember ESG things occasionally coming to a vote in VTI and failing. Sure, they may advertise ESG metrics on every fund to help you compare alternatives but you can also just ignore that data. BTW, if any of that is inaccurate please correct me.

In any case, the other biggest fund providers in the US are State Street, Schwab, and Fidelity. I don't really know where they stand on ESG issues, but that may just mean that they're doing a better job of keeping their heads down while doing the same things. Any insight into that would be helpful.

EDIT: OK, I finally caught up on some of the things that BlackRock is doing. For example, they openly boast about how they take direct voting action against companies that "fall short of our expectations" by making "insufficient progress on climate" or not having the right collection of "diversity and inclusion" on their board. So clearly it's not just about how the funds are run. BTW, their stock was just downgraded for the risks that the political advocacy puts on their business. So no matter how you feel about their political leanings, it's clearly adding new investing risks to the equation.

So I'll be reviewing my own holdings, too. At the very least, it's a good reminder to follow Harry's advice to not put your trust in any one financial institution. Diversifying your fund providers to reduce counter-party risk is a good idea.
Last edited by Tyler on Fri Oct 21, 2022 3:50 pm, edited 1 time in total.
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Re: Non-ESG ETFs

Post by dopplerdave » Fri Oct 21, 2022 1:27 pm

If you search Black Rock + ESG you get a sickening number of links to PR-like pages glowing about how committed they are to fight climate change, etc. But you get the same crap with Vanguard, State Street, Schwab and Fidelity. Black Rock seems to be the worst however as many state treasurers (especially those that produce fossil fuels) are pulling their funds out of Black Rock. But none of the news articles say where they are putting them afterwards.

It must be having a negative effect as Black Rock has taken to advertising a lot on Fox. (Almost as much as the pillow guy).

This seems like a nice time for me to move my woke funds into something similar as I can book a nice loss and lower next year's taxes. That way I would avoid feeding two beasts at the same time, the woke banks and the USG. But the only obvious one is to sell IAU and buy BAR.
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Re: Non-ESG ETFs

Post by Tyler » Fri Oct 21, 2022 3:34 pm

Xan wrote:
Thu Oct 20, 2022 4:28 pm
Plenty of gold alternatives out there. Schwab has SGOL which I've used. TLT is the toughest one to replace, probably.
GLDM (State Street) is currently the cheapest gold ETF option with a 0.10 ER. For LT treasuries, I really want to like SCHQ (Schwab) because of the very low 0.03 ER. The only thing holding me back is the small $100m AUM, as I generally don't like funds with possible liquidity issues. But SPTL (State Street) is a very nice middle ground.
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Re: Non-ESG ETFs

Post by whatchamacallit » Fri Oct 21, 2022 7:09 pm

When the SEC is the one pushing for ESG, then the only escape will be another country.

https://www.sec.gov/sec-response-climat ... ortunities
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Re: Non-ESG ETFs

Post by Kevin K. » Sat Oct 22, 2022 5:19 pm

From last week's Bogleheads conference speakers, re: ESG funds:



And this recent article in the NYT really says it all:

https://www.nytimes.com/2022/09/29/opin ... =share-url
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Re: Non-ESG ETFs

Post by Ugly_Bird » Sat Oct 22, 2022 6:28 pm

dopplerdave wrote:
Thu Oct 20, 2022 11:03 am
I have been using VTI, TLT, SHY and IAU for my PP but do not want to support the wokeness of Blackrock and Vanguard. Are there altenative ETFs that are not into the ESG movement?
What is this about? Is there some new bogus affecting our PP investments?
Could someone explain please?
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Re: Non-ESG ETFs

Post by Kbg » Sat Oct 22, 2022 10:31 pm

Hmmm…be a greedy capitalist with your money. Buy the lowest cost etf and support some anti esg charity organization instead. Likely far more effective.
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Re: Non-ESG ETFs

Post by dopplerdave » Mon Oct 24, 2022 5:52 pm

As of today, I am BlackRock free. My current PP consists of VTI, SCHO, GLDM and SPTL. (I held VTI previously so did not change it).

What is interesting is that in every case, the expense ratio was significantly lower than I was paying with BlackRock. So it was well worth the exercise of looking for alternatives even if you are not concerned about their ESG motivations.
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Re: Non-ESG ETFs

Post by Kbg » Tue Oct 25, 2022 11:01 am

dopplerdave wrote:
Mon Oct 24, 2022 5:52 pm
What is interesting is that in every case, the expense ratio was significantly lower than I was paying with BlackRock. So it was well worth the exercise of looking for alternatives even if you are not concerned about their ESG motivations.
Yep, more money in your pocket less in the managers.
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Re: Non-ESG ETFs

Post by vnatale » Tue Oct 25, 2022 11:12 am

Kbg wrote:
Tue Oct 25, 2022 11:01 am

dopplerdave wrote:
Mon Oct 24, 2022 5:52 pm

What is interesting is that in every case, the expense ratio was significantly lower than I was paying with BlackRock. So it was well worth the exercise of looking for alternatives even if you are not concerned about their ESG motivations.


Yep, more money in your pocket less in the managers.


What John Bogle preached for decades!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Non-ESG ETFs

Post by Kbg » Wed Oct 26, 2022 8:44 am

Small rant, feel free to ignore.

On ESG funds...I don't invest in them, but if someone wants to that's what free markets are all about. Being anti-ESG is not conservative or libertarian. It's you telling someone else how they should invest their money which is anti-conservative and libertarian. No one forces anyone into an ESG, it's a choice they make and have every right to make.

If they aren't for you, cool! If they are for someone else, also cool!
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Re: Non-ESG ETFs

Post by Xan » Wed Oct 26, 2022 8:49 am

I don't see anything anti-conservative or anti-libertarian about having opinions on what's good for society and what isn't. Maybe proposing a government ban on ESG would be anti-libertarian.
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Re: Non-ESG ETFs

Post by Kbg » Wed Oct 26, 2022 9:13 am

From what I've read (not deeply), Bernstein has it correct. They are mainly a Wall Street sales tool that enables charging more for something that is barely different from a vanilla index fund.
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Re: Non-ESG ETFs

Post by Tyler » Wed Oct 26, 2022 1:02 pm

The problem with BlackRock is not that they offer ESG funds for people who care about those things and want to support them with their own money. Just like paying more for organic produce that is fundamentally the same product, people can pay more for ESG funds if they like. To each his own.

The deeper issue is that BlackRock uses their voting rights (as extremely large holders of any company's stock) to actively pressure the board of every major company to adopt ESG values. That's not about choice. It's about direct political coercion.
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Re: Non-ESG ETFs

Post by Kriegsspiel » Wed Oct 26, 2022 5:47 pm

Tyler wrote:
Wed Oct 26, 2022 1:02 pm
The deeper issue is that BlackRock uses their voting rights (as extremely large holders of any company's stock) to actively pressure the board of every major company to adopt ESG values. That's not about choice. It's about direct political coercion.
Tyler's got it. I was blissfully unaware that Vanguard voted and was involved in the corporations that we invested in through them. They portray themselves as a passive, "take what the market gives you" kind of place, but they're actively influencing corporations. And in antagonistic ways too; for instance, voting with Engine Number One against Exxon.

Anyways, you've already identified the worst ones, Blackrock and Vanguard. I poked around a bit, and I think Fidelity is the least quisling-like of the major investment fund companies. The most thorough solution is to invest in individual corporate stocks, which prevents the funds from voting your shares as they see fit.
And as for him who lacks the courage to defend even his own soul: Let him not brag of his progressive views, boast of his status as an academician or a recognized artist, a distinguished citizen or general. Let him say to himself plainly: I am cattle, I am a coward, I seek only warmth and to eat my fill.
Solzhenitsyn, Live Not By Lies
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Re: Non-ESG ETFs

Post by whatchamacallit » Wed Oct 26, 2022 6:19 pm

I can't hypothesize a solution. Most people's stock is locked up in their retirement accounts and I don't see enough people actually taking the time to think about it.

The power to make a difference is going to have to come from the customers of the companies.

The other problem is future growth is now perceived to be coming from China and India so there is not enough incentive to cater to the states.
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Re: Non-ESG ETFs

Post by Kbg » Wed Oct 26, 2022 10:00 pm

Kriegsspiel wrote:
Wed Oct 26, 2022 5:47 pm
Tyler wrote:
Wed Oct 26, 2022 1:02 pm
The deeper issue is that BlackRock uses their voting rights (as extremely large holders of any company's stock) to actively pressure the board of every major company to adopt ESG values. That's not about choice. It's about direct political coercion.
Tyler's got it. I was blissfully unaware that Vanguard voted and was involved in the corporations that we invested in through them. They portray themselves as a passive, "take what the market gives you" kind of place, but they're actively influencing corporations. And in antagonistic ways too; for instance, voting with Engine Number One against Exxon.

Anyways, you've already identified the worst ones, Blackrock and Vanguard. I poked around a bit, and I think Fidelity is the least quisling-like of the major investment fund companies. The most thorough solution is to invest in individual corporate stocks, which prevents the funds from voting your shares as they see fit.
I was wondering if someone would bring voting shares up. No disagreement with any of this...as in yep it's not good that they get to use the sum total of other's money to vote according to what the investment corporation agrees with.
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Re: Non-ESG ETFs

Post by coasting » Wed Oct 26, 2022 11:25 pm

Kbg wrote:
Wed Oct 26, 2022 10:00 pm
Kriegsspiel wrote:
Wed Oct 26, 2022 5:47 pm
Tyler wrote:
Wed Oct 26, 2022 1:02 pm
The deeper issue is that BlackRock uses their voting rights (as extremely large holders of any company's stock) to actively pressure the board of every major company to adopt ESG values. That's not about choice. It's about direct political coercion.
Tyler's got it. I was blissfully unaware that Vanguard voted and was involved in the corporations that we invested in through them. They portray themselves as a passive, "take what the market gives you" kind of place, but they're actively influencing corporations. And in antagonistic ways too; for instance, voting with Engine Number One against Exxon.

Anyways, you've already identified the worst ones, Blackrock and Vanguard. I poked around a bit, and I think Fidelity is the least quisling-like of the major investment fund companies. The most thorough solution is to invest in individual corporate stocks, which prevents the funds from voting your shares as they see fit.
I was wondering if someone would bring voting shares up. No disagreement with any of this...as in yep it's not good that they get to use the sum total of other's money to vote according to what the investment corporation agrees with.
I think the fund companies would actually prefer to put the choice into the hands of investors. They just vote now because somebody has to do it. And naturally ESG mindset creeps in because it is fashionable.

The Investor Democracy is Expected (INDEX) Act was introduced in the Senate in May "to address corporate voting power by requiring any asset manager of a passive index fund with more than 1% of a company’s voting shares to vote those shares in accordance with the instructions of the fund’s investors—not at the discretion of the asset manager."
https://www.banking.senate.gov/newsroom ... -investors

Seems no further action since a hearing in June: https://www.congress.gov/bill/117th-con ... -bill/4241

It sounds like a great idea, but details are important. Note the Routine Matters Exception section in
https://www.sullivan.senate.gov/imo/med ... 051722.pdf
For example, if we go down this route you still need enough shareholders to actually vote in order to satisfy a company's shareholder meeting quorum.

So some kind of default is probably still required. I know I don't want to cast votes for each of the 500 stocks in my S&P 500 fund. But maybe a system could let you delegate your vote to follow some other groups direction - such as: cast my vote according to instructions of the Anti-ESG Activist Association (or whatever group shares your goals and values).
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Re: Non-ESG ETFs

Post by Kriegsspiel » Thu Oct 27, 2022 4:01 pm

coasting wrote:
Wed Oct 26, 2022 11:25 pm
I think the fund companies would actually prefer to put the choice into the hands of investors. They just vote now because somebody has to do it.
I don't think so. The more natural default choice is to not vote (the corporation could have a "present" vote or something). Just hold the shares. Like passive investors freeride on active investors setting the stock price, they could freeride on active investor's votes. I think the fund companies like having the option to wield power over corporations.

While it's not a stretch to assume that passive index investors don't even want to vote on corporate actions, it would probably be trivial for the fund companies to give their investors a way to vote on whichever corporate actions they want to vote on, and abstain from ones they don't want to.
The Investor Democracy is Expected (INDEX) Act was introduced in the Senate in May "to address corporate voting power by requiring any asset manager of a passive index fund with more than 1% of a company’s voting shares to vote those shares in accordance with the instructions of the fund’s investors—not at the discretion of the asset manager."
https://www.banking.senate.gov/newsroom ... -investors

Seems no further action since a hearing in June: https://www.congress.gov/bill/117th-con ... -bill/4241

It sounds like a great idea, but details are important. Note the Routine Matters Exception section in
https://www.sullivan.senate.gov/imo/med ... 051722.pdf
For example, if we go down this route you still need enough shareholders to actually vote in order to satisfy a company's shareholder meeting quorum.

So some kind of default is probably still required. I know I don't want to cast votes for each of the 500 stocks in my S&P 500 fund. But maybe a system could let you delegate your vote to follow some other groups direction - such as: cast my vote according to instructions of the Anti-ESG Activist Association (or whatever group shares your goals and values).
The default is a "present" vote, or something like that. Delegating your votes to a group of your choice is an interesting idea too.
And as for him who lacks the courage to defend even his own soul: Let him not brag of his progressive views, boast of his status as an academician or a recognized artist, a distinguished citizen or general. Let him say to himself plainly: I am cattle, I am a coward, I seek only warmth and to eat my fill.
Solzhenitsyn, Live Not By Lies
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Re: Non-ESG ETFs

Post by Maddy » Sun Oct 30, 2022 7:19 am

Kriegsspiel wrote:
Wed Oct 26, 2022 5:47 pm
The most thorough solution is to invest in individual corporate stocks. . .
What dollar amount, generally speaking, is required to get into an individual stock? I've always assumed that a certain minimum is required for no better reason than to keep transfer agents from wasting their time on the "little people."
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Re: Non-ESG ETFs

Post by Mark Leavy » Sun Oct 30, 2022 10:59 am

You can buy just 1 share (at whatever the stock price is) for most any (every?) stock on the market.

Some brokerages allow you to buy fractional shares (Interactive Brokers) where you can spend as little as $25 on each company. Not sure how voting would work though if you own less than a full share.
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Re: Non-ESG ETFs

Post by Xan » Sun Oct 30, 2022 11:01 am

Schwab will let you buy fractional share at $5 for stocks on the S&P 500.
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