USCL ETF: What Is It? Returns, Expense Ratio, Holdings, and Alternative ETFs Explained
A US large- and mid-cap climate transition ETF that adjusts holding weights based on carbon emissions intensity and climate risk scores. Its expense ratio is low.
SubscribeWhat Is This ETF?
This passive ETF tracks the MSCI USA Climate Transition & Physical Risk Index. It holds a portfolio of US large- and mid-cap stocks, with weights adjusted for carbon emissions intensity, emissions reduction targets, green business revenue, and climate risk management scores.
It suits long-term investors who want diversified exposure to the US stock market along with a climate transition theme and fossil fuel and weapons screening.
Launched by BlackRock (iShares) in 2023, it is a passive (index-tracking) ETF.
How Does It Invest?
| Item | Details |
|---|---|
| Tracking Index | MSCI USA Climate Transition & Physical Risk Index |
| Management Style | Passive (index-tracking) |
| Rebalancing Frequency | Semiannual |
| Dividend Frequency | Quarterly |
| Total Expense Ratio | 0.08% |
The fund calculates carbon emissions intensity, emissions reduction targets, green business revenue, and climate risk management scores, then gives higher weights to companies with stronger climate transition capabilities than their sector peers. At the same time, it excludes companies involved in certain businesses such as oil sands, coal mining, tobacco, and controversial weapons.
- A sector-neutral approach applies climate weighting without overconcentrating in any single sector
- Expense ratio is kept at a low level
Size and Costs
Assets under management (AUM) stand at $2.8B, and the total expense ratio is 0.08% per year.
Its fees are on the low side compared with ESG and climate category peers, and thanks to its sector-neutral design, its sector composition does not differ greatly from traditional broad US equity ETFs.
Performance and Trends
1-Year Price Performance
Dividend & Yield
52-Week Price RangeThe fund moves broadly in line with US large- and mid-cap stocks, and because of the climate weighting adjustments, it keeps a relatively low allocation to the carbon-intensive energy and materials sectors.
As institutional and long-term investors continue to show interest in ESG and climate transition theme ETFs, the low fee level and broad diversification have been the main drivers of fund inflows.
Strengths and Weaknesses
Its strengths are a low expense ratio and a sector-neutral climate transition design, while the exclusion of stocks through climate screening may be a constraint for some investors.
💪 Key Strengths
⚠️ Points to Watch
Alternative ETFs and Related Products
ESGU, ESGV, DSI, and SUSA shown in the table are US equity ETFs with similar ESG screening strategies, though each uses a different tracking index and screening criteria. ESGU follows the MSCI USA ESG Screened Index, while ESGV is managed with Vanguard's ESG inclusion and exclusion approach based on the total US stock market. To focus more on the climate transition theme, you can also consider CRBN (which tracks a low-carbon index). To hold broad US equities without ESG screening, VTI and ITOT are direct substitutes.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 ESGU | iShares Trust iShares ESG Aware MSCI USA ETF | $165.22 | -1.9% | $18.2B | 0.15% | 0.94% | +10.9% |
 ESGV | Vanguard ESG U.S. Stock ETF | $132.73 | -2.1% | $13.3B | 0.09% | 0.9% | +9.8% |
 DSI | iShares ESG MSCI KLD 400 ETF | $142.93 | -2.1% | $5.5B | 0.25% | 0.89% | +10.2% |
 SUSA | iShares ESG Optimized MSCI USA ETF | $155.03 | -1.9% | $4.1B | 0.25% | 0.84% | +11.5% |
 USCA | Xtrackers MSCI USA Climate Action Equity ETF | $44.81 | -1.8% | $3.5B | 0.07% | 1.06% | +6.8% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
| NVDA | NVIDIA Corp | 0.21% | $204.64 | -4.2% | $4.93T | 25.9 | 0.38% |
| AAPL | Apple Inc | 0.09% | $344.63 | -1.2% | $5.03T | 39.5 | 0.32% |
| MSFT | Microsoft Corp | 0.11% | $521.91 | -1.6% | $3.88T | 27.3 | 0.74% |
| AVGO | Broadcom Inc | 0.11% | $326.08 | -5.5% | $1.56T | 41.6 | 0.8% |
| AMZN | Amazon.com Inc | 0.10% | $240.35 | -1.4% | $2.59T | 19.4 | - |
Investor Checkpoints
These are the key points to review before investing in USCL. A climate transition theme and broad diversification coexist, but the possibility of changes to the climate assessment methodology and currency exposure should be checked in advance.
| Checkpoint | What to Check | Current Status |
|---|---|---|
| 💵 Total Expense Ratio | Check the impact of cumulative fees over a long holding period | Kept at a low level |
| 🌱 Climate Screening Criteria | Understand the methodology for calculating MSCI climate transition scores | Methodology may change |
| 📊 Sector Composition | Check sector differences versus broad US equities | Sector-neutral approach applied |
| 💱 Exchange Rate | Not currency hedged, so US dollar exchange rate effects apply | Not currency hedged |
If the index provider changes its climate assessment methodology, the portfolio composition may change, and because of the low allocation to the energy and materials sectors, performance may differ from the broad market during periods when those sectors rally.
It is an option worth considering for long-term investors who want a low expense ratio and a sector-neutral climate transition design. If you want pure low-cost US equity exposure without climate screening, VTI and ITOT are more suitable.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
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