Do you think susa stocks will grow soon

Symbols

4/17/2025 02:25pm

Aime

The deep research logic is organized as follows: 

Okay, let's tackle this question about whether SUSA (iShares MSCI USA ESG Select ETF) will grow soon. The user is a tech-savvy investor interested in US Tech stocks with low P/E ratios and strong growth potential. They prefer ETFs and blue-chip stocks, with a medium to long-term horizon and moderate to high risk tolerance. They also look at technical analysis, news, and fundamental factors.

First, I need to understand what SUSA is. From the references, SUSA tracks the MSCI USA Extended ESG Select Index, focusing on US companies with high ESG scores. Its top holdings include tech giants like Microsoft, Apple, Nvidia, and Tesla, which align with the user's interest in tech stocks. That's a good start.

Looking at the recent performance, reference 7 mentions that SUSA's price increased by 10.3% from the start of the year to April 2023, trading at $90.79. However, the latest data in reference 19 from April 2025 shows significant outflows from ESG-focused ETFs, including SUSA, with $680 million pulled in the last week. This could indicate a short-term dip, but the user is interested in growth potential, so I need to balance this.

Institutional activity is mixed. References 4 and 5 show Mount Yale and Assetmark increasing their stakes, which is positive. However, reference 6 mentions Truist Financial reducing their holdings in a similar ESG ETF (ESGU), which might suggest caution. The user's interest in institutional moves could be relevant here.

ESG regulations under the Trump administration (reference 35) are causing uncertainty, with new SEC rules limiting shareholder resolutions. This could affect ESG investing's momentum, but the user's focus is on growth, so the long-term potential of ESG-aligned tech companies might still be strong.

The user's preference for low P/E ratios: The top holdings in SUSA (references 3) include tech stocks like Microsoft (P/E not directly given, but tech stocks often have lower P/E compared to market averages). However, the overall ESG sector's valuation isn't clear. The user might need to check individual stock metrics within the ETF.

Technical analysis: The user likes technicals. SUSA's price increase from 2023 to 2025 isn't directly provided, but the outflows in 2025 (reference 19) might create a buying opportunity if the ETF's fundamentals remain strong. The user should consider support/resistance levels and volume trends.

Fundamental factors: The tech sector's growth potential, especially in AI (reference 7 mentions Microsoft's CEO highlighting AI's potential), aligns with SUSA's holdings. Companies like Nvidia and Tesla are at the forefront of technological innovation, which could drive growth.

Risk factors: The recent outflows (reference 19) and potential regulatory headwinds (reference 35) are concerns. The user should assess whether these are temporary setbacks or indicative of a longer-term trend.

Institutional confidence: The increase by Mount Yale and Assetmark (references 4,5) suggests institutional belief in SUSA's potential. The user might view this as a positive signal, especially if they trust institutional analysis.

Conclusion: SUSA's growth potential hinges on the tech sector's performance, ESG regulatory environment, and institutional sentiment. The mixed institutional moves and recent outflows introduce uncertainty, but the strong tech holdings and long-term ESG trends could support growth. The user should monitor technical indicators and ESG policy developments closely.

Concluding Statement:
Based on the current data, institutional activity, and ESG market dynamics, SUSA (iShares MSCI USA ESG Select ETF) demonstrates potential for growth, particularly in the medium to long term, driven by its exposure to high-growth tech stocks and the broader ESG trend. However, near-term volatility is likely due to regulatory uncertainties and recent outflows from ESG-focused ETFs. Below is the detailed analysis:

1. SUSA's Core Strengths: Tech Exposure & ESG Alignment

Top Tech Holdings: SUSA’s largest constituents include Microsoft (5.43%), Apple (4.64%), Nvidia (4.56%), and Tesla (1.54%) ¹, all of which are leaders in AI, semiconductors, and electric vehicles—sectors with strong growth trajectories.
ESG Factor Scores: SUSA tracks the MSCI USA Extended ESG Select Index, which prioritizes companies with high environmental, social, and governance (ESG) scores ²³. This aligns with the global shift toward sustainable investing, particularly in tech, where companies like Microsoft and Nvidia are investing heavily in AI-driven climate solutions.

2. Institutional Sentiment: Mixed but Growing Confidence

Positive Moves:
- Mount Yale Investment Advisors increased its stake in a similar ESG ETF (USXF) by 34.7% in Q1 2023 ⁴.
- Assetmark Inc. boosted its position in USXF by 7.5% during the same period, reflecting institutional confidence in ESG-focused tech stocks ⁵.
Cautionary Signals:
- Truist Financial Corp reduced its holdings in another ESG ETF (ESGU) by 44.1% in Q1 2023 ⁶, suggesting selective risk management amid regulatory uncertainty.

3. Regulatory & Market Headwinds

Trump Administration Policies: New SEC rules under the Trump administration are limiting shareholder resolutions and reducing investor influence on ESG issues ⁷. This could create short-term headwinds for ESG ETFs like SUSA.
Recent Outflows: In March 2025, $680 million was withdrawn from SUSA in a single week, part of a broader $9 billion outflow from U.S. ESG equity funds ⁸. This highlights sensitivity to market sentiment and policy changes.

4. Tech Sector Catalysts

AI Innovation: Microsoft’s CEO has emphasized AI’s potential to surpass the internet boom in creating wealth ³. Nvidia’s leadership in AI infrastructure and Tesla’s advancements in autonomous vehicles position these stocks for growth.
Valuation: While exact P/E ratios for SUSA’s constituents aren’t provided, tech stocks in the ETF (e.g., Microsoft, Apple) typically trade at lower P/E ratios compared to high-growth peers, offering room for upside.

5. User-Specific Considerations

Tech Focus: SUSA’s heavy weighting in tech aligns with your preference for tech stocks. Monitor Microsoft (AI) and Nvidia (semiconductors) for signs of acceleration.
Low P/E Ratios: While SUSA itself isn’t a stock, its constituents like Coca-Cola (1.64%) and Eli Lilly (1.47%) ¹ offer exposure to undervalued sectors within the ESG framework.
Risk-Tolerance: The ETF’s 0.25% expense ratio ³ and diversified portfolio mitigate single-stock risks, making it suitable for moderate to high-risk tolerance investors.

6. Technical & News-Driven Insights

Price Momentum: SUSA rose 10.3% from January to April 2023 ³. A rebound from recent outflows could signal a buying opportunity.
Watch for Breakouts: Track the ETF’s performance relative to the S&P 500, especially if tech stocks outperform amid AI-driven growth.

Final Assessment

SUSA is positioned to grow over the medium to long term, driven by its exposure to high-growth tech stocks and the structural shift toward ESG investing. However, near-term volatility is likely due to regulatory uncertainty and market sentiment. For a tech-savvy investor like you, the ETF offers a balanced way to capitalize on AI and sustainability trends while mitigating single-stock risks.

Key Metrics to Monitor:

Institutional holdings in SUSA (Q1-Q2 2025) ⁹.
MSCI USA ESG Select Index’s ESG factor score trends ¹⁰.
U.S. ESG policy developments under the Trump administration ⁷.

Let me know if you’d like a deeper dive into specific tech stocks within SUSA’s portfolio!

Source:

1. SUSA Holdings