iShares MSCI KLD 400 Social ETF (DSI)

US ETF iShares MSCI KLD 400 Social ETF (DSI) Summary

Profile:

iShares MSCI KLD 400 Social ETF (DSI) is a socially responsible ETF that tracks the MSCI KLD 400 Social Index. This index comprises 400 large- and mid-cap US companies with strong environmental, social, and governance (ESG) practices. DSI offers investors exposure to a diversified portfolio of socially responsible companies across various sectors.

Objective:

The ETF's primary investment goal is to track the performance of the MSCI KLD 400 Social Index. DSI seeks to provide investors with long-term capital appreciation and income, while aligning their investments with social responsibility values.

Issuer:

BlackRock, the world's largest asset management firm, issues DSI. BlackRock has a strong reputation and track record in the ETF market, managing over $10 trillion in assets globally. The ETF is managed by a team of experienced portfolio managers with expertise in ESG investing.

Market Share:

DSI holds a significant market share within the socially responsible ETF space, capturing approximately 25% of the segment's assets under management.

Total Net Assets:

As of October 27, 2023, DSI has total net assets of approximately $8.4 billion.

Moat:

DSI benefits from several competitive advantages:

• First-mover advantage: DSI was one of the first socially responsible ETFs launched in the US, giving it an established position in the market.
• Strong brand recognition: BlackRock's strong brand and reputation enhance investor trust and attract assets.
• Low expense ratio: DSI's expense ratio of 0.19% is relatively low compared to other socially responsible ETFs.

Financial Performance:

DSI has historically outperformed its benchmark, the S&P 500 Index, with lower volatility. Over the past 5 years, DSI generated an average annual return of 12.5%, compared to 9.8% for the S&P 500.

Growth Trajectory:

The market for socially responsible investing is experiencing rapid growth, creating a positive outlook for DSI. As investors increasingly prioritize ESG considerations, DSI is well-positioned to benefit from this trend.

Liquidity:

DSI has an average daily trading volume of over 1 million shares, indicating high liquidity and ease of trading. The bid-ask spread is typically tight, minimizing transaction costs.

Market Dynamics:

Several factors influence DSI's market environment:

• Increased investor demand for ESG investing: This trend drives the growth of DSI's assets under management.
• Regulatory changes promoting ESG disclosure: These changes enhance transparency and facilitate investor decision-making.
• Performance of the underlying index: The performance of the MSCI KLD 400 Social Index directly impacts DSI's returns.

Competitors:

DSI's key competitors include:

• Vanguard ESG U.S. Stock ETF (ESGV): Market share of approximately 20%, expense ratio of 0.12%.
• iShares ESG Aware MSCI USA ETF (ESGU): Market share of approximately 15%, expense ratio of 0.15%.

Expense Ratio:

DSI's expense ratio is 0.19%, which includes management fees and other operational costs.

Investment approach and strategy:

DSI employs a passive investment approach, tracking the MSCI KLD 400 Social Index. The ETF holds all the constituents of the index in the same proportion as their weighting in the index.

Key Points:

• Socially responsible ETF with strong ESG focus
• Outperformed benchmark with lower volatility
• High liquidity and low expense ratio
• Well-positioned for growth in the ESG investing market

Risks:

• Market risk: DSI's returns are subject to fluctuations in the underlying stock market.
• Tracking error: DSI's performance may deviate from the MSCI KLD 400 Social Index due to factors such as trading costs and cash drag.
• ESG factors may not always align with financial performance: Investing in companies with strong ESG practices does not guarantee superior financial returns.

Volatility:

DSI's historical volatility is slightly lower than the S&P 500 Index, indicating a lower level of risk.

Who Should Consider Investing:

DSI is suitable for investors who:

• Seek exposure to a diversified portfolio of socially responsible companies.
• Are willing to accept some tracking error compared to the underlying index.
• Have a long-term investment horizon.

Fundamental Rating Based on AI:

Based on an AI analysis of various factors like financial health, market position, and future prospects, DSI receives a Fundamental Rating of 8 out of 10. The AI model considers DSI's strong track record, competitive advantages, and positive growth trajectory, resulting in a favorable rating.

Resources and Disclaimers:

• iShares website: https://www.ishares.com/us/products/etf/product-detail?productId=284281
• BlackRock website: https://www.blackrock.com/us/individual/products/product-detail/ishares-msci-kld-400-social-etf-dsi

This information is for educational purposes only and should not be considered investment advice. Please consult a financial advisor before making any investment decisions.