eToro launches a diversified ESG Portfolio

Broker eToro announced the launch today ESG-Leaders - a portfolio that offers retail investors long-term exposure to companies that are leaders in environmental, social and corporate (ESG) best practices.

ESG is a new investment trend

The portfolio is built by identifying four companies with some of the highest ESG ratings for their sector across 11 industry sectors while taking into account market capitalization, liquidity and analyst ratings from the sellers. The 11 selected industrial sectors that were included are: discretionary goods, consumer goods, energy, finance, healthcare, industry, information technology, materials, real estate, telecommunications services and media. Names in the portfolio include Nivea's parent company Beiersdorf, ABB, Nvidia, and Telefonica.

"Our research⁽¹⁾ show that three in five (62%) individual investors sometimes or always consider ESG factors before investing. ESG insights may provide additional information about a company not normally included in traditional financial analysis, and increasing evidence suggests that positive ESG results can improve returns" Explains Dani Brinker, head of investment portfolios at eToro. 

The launch of the wallet is the follow-up introducing ESG assessment to the eToro platform for over 2700 shares. Powered by ESG Book, a world leader in ESG data and technology, ESG results combine the most up-to-date market news, NGO signals and company reported information, enabling users to consider environmental, social and governance factors when building portfolios.

“Depending on the nature of the industry, companies are exposed to varying degrees to environmental, social and governance factors. For example, an energy company will be more exposed to environmental risks, while a financial services company is more exposed to management risks. ' Constructing a portfolio composed of the best ESG leaders from 11 industry sectors, offers a comprehensive, diversified portfolio, providing exposure to companies that are leaders in all three ESG aspects - added Dani Brinker.

EToro wallets as a recipe for diversification

EToro Smart Wallets offer investors exposure to a variety of market topics. By bundling several assets under a specific methodology and using a passive investment approach, eToro Smart Portfolios are long-term investment solutions that offer diversified exposure with no management fees.

Initial investment starts at $ 500 and traders have access to tools and charts to track portfolio performance while eToro's social feed keeps them updated on sector developments. At the moment, the wallet is not available for US users.