We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is iShares Paris-Aligned Climate MSCI USA ETF (PABU) a Strong ETF Right Now?
Read MoreHide Full Article
The iShares Paris-Aligned Climate MSCI USA ETF (PABU - Free Report) was launched on 04/08/2022, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $2.28 billion, this makes it one of the larger ETFs in the Style Box - All Cap Blend. PABU is managed by Blackrock. Before fees and expenses, PABU seeks to match the performance of the MSCI USA CLMT PARIS ALGN BNC EXT SLCT ID.
The MSCI USA Climate Paris Aligned Benchmark Extended Select Index composed of U.S. large & mid-capitalization stocks designed to be compatible with the objectives of the Paris Agreement by following a decarbonization trajectory, reducing exposure to climate-related transition & physical risks & increasing exposure to companies favourably positioned for the transition to a low-carbon economy.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.15%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For PABU, it has heaviest allocation in the Information Technology sector --about 39.9% of the portfolio --while Financials and Healthcare round out the top three.
When you look at individual holdings, Nvidia Corp (NVDA) accounts for about 9.64% of the fund's total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).
PABU's top 10 holdings account for about 45.04% of its total assets under management.
Performance and Risk
The ETF has added roughly 10.41% and was up about 14.15% so far this year and in the past one year (as of 09/24/2025), respectively. PABU has traded between $53.19 and $72.07 during this last 52-week period.
The ETF has a beta of 1.04 and standard deviation of 17.53% for the trailing three-year period. With about 178 holdings, it effectively diversifies company-specific risk .
Alternatives
iShares Paris-Aligned Climate MSCI USA ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX and the iShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. Vanguard ESG U.S. Stock ETF has $11.52 billion in assets, iShares ESG Aware MSCI USA ETF has $14.84 billion. ESGV has an expense ratio of 0.09% and ESGU changes 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Blend
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is iShares Paris-Aligned Climate MSCI USA ETF (PABU) a Strong ETF Right Now?
The iShares Paris-Aligned Climate MSCI USA ETF (PABU - Free Report) was launched on 04/08/2022, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $2.28 billion, this makes it one of the larger ETFs in the Style Box - All Cap Blend. PABU is managed by Blackrock. Before fees and expenses, PABU seeks to match the performance of the MSCI USA CLMT PARIS ALGN BNC EXT SLCT ID.
The MSCI USA Climate Paris Aligned Benchmark Extended Select Index composed of U.S. large & mid-capitalization stocks designed to be compatible with the objectives of the Paris Agreement by following a decarbonization trajectory, reducing exposure to climate-related transition & physical risks & increasing exposure to companies favourably positioned for the transition to a low-carbon economy.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.15%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For PABU, it has heaviest allocation in the Information Technology sector --about 39.9% of the portfolio --while Financials and Healthcare round out the top three.
When you look at individual holdings, Nvidia Corp (NVDA) accounts for about 9.64% of the fund's total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).
PABU's top 10 holdings account for about 45.04% of its total assets under management.
Performance and Risk
The ETF has added roughly 10.41% and was up about 14.15% so far this year and in the past one year (as of 09/24/2025), respectively. PABU has traded between $53.19 and $72.07 during this last 52-week period.
The ETF has a beta of 1.04 and standard deviation of 17.53% for the trailing three-year period. With about 178 holdings, it effectively diversifies company-specific risk .
Alternatives
iShares Paris-Aligned Climate MSCI USA ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX and the iShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. Vanguard ESG U.S. Stock ETF has $11.52 billion in assets, iShares ESG Aware MSCI USA ETF has $14.84 billion. ESGV has an expense ratio of 0.09% and ESGU changes 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Blend
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.