ESG Coming to Your 401k Plan

Just before Thanksgiving, the Biden administration made some changes where they basically gave 401k plan providers and pension managers the ability to use ESG funds inside retirement accounts. ESG stands for environmental, social, and governance factors. This shouldn’t come as a large surprise, but it’s interesting because ESG is fairly new to investing.

The S&P 500 is available in most 401k plans and has an ESG rating of AAA, meaning the S&P 500 environmental, social, and governance standard is the highest possible. The ESGU ETF is 5x the cost of the S&P 500. As you see these ESGUs pop up in investments, maybe try and avoid them.

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