USEA
iShares MSCI USA ESG Enhanced UCITS ETF USD (Acc)
Published by Radif Partners · Updated
Overview
iShares MSCI USA ESG Enhanced UCITS ETF USD (Acc) (USEA) tracks the MSCI USA ESG Enhanced Focus CTB index and holds its constituents directly, a physical replication managed by iShares. Dividends are reinvested inside the fund rather than paid out, so USEA suits investors building a position over time. The fund is domiciled in IE, which determines the withholding tax treatment applied to its dividends. Annual charges come to 0.07% of assets, and the fund holds 14.0B under management. It is not eligible for the French PEA, but can be held in a securities account, a UK ISA or a German Depot. Its risk level is rated medium. Launched on 2019-07-03, the fund is denominated in USD and has 7 years of track record. It is a UCITS fund, so it follows the European framework on diversification, liquidity and asset segregation. Because USEA accumulates, nothing is taxed while the shares are held: the charge falls on disposal, against your capital gains allowance in a general account, and not at all inside an ISA or a SIPP. Domicile in IE sets the withholding the fund itself suffers on the dividends it receives, a cost absent from the stated fee but present in the return.
At 0.07%, this fund sits among the cheapest in its category: of 224 comparable funds, only a tenth match it or do better. On £10,000 that is about 7 a year against 20 for the median fund, close to 130 of difference over a decade. Once fees are at the floor, they stop being where the difference lies: it moves to replication quality, read in the tracking difference, and to your broker's dealing cost, which can exceed the fee saving if you buy in small amounts.
Replication is physical: the fund actually holds the constituents of MSCI USA ESG Enhanced Focus CTB, which makes its contents verifiable line by line in the issuer's report. Two points deserve attention. Securities lending first, practised by most physical funds to reduce costs: it earns a few hundredths of a point and creates an exposure to the borrower, covered by collateral, with the annual report stating the proportion lent. Rebalancing second: every change in the index's composition forces the fund to buy and sell, and those internal costs are not in the 0.07% headline. That is why two funds at the same price do not track their index with the same fidelity.
The domicile, Ireland, is not an administrative detail: it determines the withholding tax the fund suffers on the dividends it receives, and that loss appears in no fee table. On US equities, the Ireland-US treaty cuts withholding from thirty to fifteen per cent, which on a world index is mechanically worth several tenths of a point a year and explains Irish dominance of this segment. For the holder, the UCITS framework also brings the key information document in their own language, diversification rules, and separation of the fund's assets from the issuer's.
Income is accumulated: dividends from the holdings are reinvested inside the fund rather than paid out. In a taxable account that defers taxation to the moment of sale instead of triggering it annually, leaving the whole return at work, and that is the main advantage of this share class. Two qualifications go with it. A holder who needs income has to sell units to obtain it, which is one more decision to take and sometimes at a bad moment. And the deferral is not universal: some countries tax a notional annual return whatever the distribution policy, in which case the accumulating class changes nothing.
With 14.0 billion in assets and 7 years of history, this fund has the size and the record that make closure unlikely and the spread narrow. Three checks remain, once a year, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of MSCI USA ESG Enhanced Focus CTB, which can change its selection or weighting rules without the fund's name moving, in which case what you hold has changed with nothing to announce it.
MSCI USA ESG Enhanced Focus CTB applies a non-financial screen, and the first thing to establish is which one: a simple exclusion of a few activities leaves a portfolio very close to the starting index, while selecting the best-rated in each sector removes a large part of it. Both often carry the same kind of name. Two practical consequences: the deviation from the broad index becomes deliberate and can last for years, and the rating comes from a provider whose method changes, so the composition shifts without any public rule having moved. The exclusion list is in the prospectus, and that is the only document that binds.
The published returns for this fund are incomplete, and that is itself information: without a multi-year record, the only available check is the structure, the 0.07% ongoing charge, 14.0 billion in assets and the replication method. A recent or little-followed fund is not a bad fund for that reason, but it can only be judged on what is known in advance rather than on what it has done.
0.07%
14.0B
14,000M USDMedium
584
Physical
Accumulating
USD
IE
MSCI USA ESG Enhanced Focus CTB
iShares
2019-07-03 (7 years)
Contextual Analysis
Fund Size
With 14.0B in assets, this is a large fund, good liquidity and tight spreads.
Fee Positioning
A TER of 0.07% is among the lowest on the market, excellent value.
Track Record
Launched in 2019-07-03, this fund has 7 years of history, enough to evaluate consistency.
Risk Profile
Medium risk, good risk/return balance for a 5+ year horizon.
Performance
Returns Summary
| Period | Ann. Return | Cumulative |
|---|---|---|
| 1 Month (est.) | – | – |
| 3 Months (est.) | – | – |
| 6 Months (est.) | – | – |
| YTD (est.) | – | – |
| 1 Year | – | – |
| 3 Years | – | – |
| 5 Years | – | – |
| Since inception (7y) | – | – |
Key Facts
Fund Profile
Themes & Zones
Holdings
Risk
How to Buy This ETF
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About this ETF
The iShares MSCI USA ESG Enhanced UCITS ETF USD (Acc) tracks the MSCI USA ESG Enhanced Focus CTB index. It is managed by iShares using physical replication and follows a accumulating distribution policy. The fund is denominated in USD and domiciled in IE. It has a total expense ratio (TER) of 0.07%.
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Frequently asked questions
What do USEA's 0.07% charges actually cost?
They are taken from the fund's value continuously and never billed separately: on £1,000 invested that is about £0.70 a year and roughly £7 over ten years at a constant amount. That is the only cost of the fund itself. Your broker's commission and the spread between buying and selling price come on top, and they weigh most on small frequent purchases.
How do you buy USEA, and on which venue?
Through any broker that lists ISIN IE00BHZPJ890. The same strategy often exists in several share classes with different fees and distribution policies, and what counts is the class you buy rather than the one you read about: check the ISIN, not the name. A limit order avoids paying the spread of a thin order book, particularly outside the trading hours of the underlying markets.
Is USEA genuinely diversified?
Less so than the number of holdings suggests. MSCI USA ESG Enhanced Focus CTB weights its constituents by market capitalisation, so the largest companies make up a share of the fund far above their number, and that concentration deepens without any rule changing. The useful check is the weight of the top ten holdings, published monthly by iShares: that figure says how many companies the outcome actually depends on.
What should you re-check on USEA once a year?
Three things, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of MSCI USA ESG Enhanced Focus CTB, which can change its selection or weighting rules without the fund's name moving: in that case what you hold has changed with nothing to announce it.
Does USEA lend out the securities it holds?
Probably in part: most physical funds lend securities to reduce their costs, and iShares publishes the proportion in the annual report. Lending income is worth a few hundredths of a point, shared between the fund and the issuer. The risk is the borrower's, covered by collateral worth more than the amount lent, and it appears in the prospectus rather than in the stated fee.
This ranking is for informational purposes only and does not constitute a recommendation to buy or sell any security. Displayed performance is simulated.