BetaShares Global Sustainability Leaders ETF (ETHI) — Review & Analysis

ETHI is Australia's largest ethically-screened global equity ETF, with $3.7 billion in assets as at May 2026 — about 1.0% of the entire $358 billion Australian ETF market. Betashares launched ETHI in January 2017 and it has since become the default "ethical" allocation in values-driven portfolios. The fund tracks the Nasdaq Future Global Sustainability Leaders Index, holding approximately 200 large global companies that pass a range of ethical and environmental screens. Companies are excluded if they have material exposure to fossil fuels, tobacco, gambling, weapons, alcohol, pornography, animal cruelty or have failed labour and human rights criteria. The management fee is 0.59% per annum — high vs passive global ETFs but typical for thematic/screened products.

To compare ETHI side-by-side with every other ETF on the ASX, see the full ETF directory.

ETHI's largest holdings as at May 2026 include Nvidia, Apple, Tesla, Visa, Mastercard, Home Depot, Costco, ASML and Adobe — many of the same large global companies in VGS, minus the excluded sectors. The fund has zero fossil-fuel exposure (no ExxonMobil, Chevron, Shell, BP), zero tobacco (no Philip Morris), and zero weapons (no Lockheed Martin, Raytheon). Top sector weights are approximately 35% technology, 15% financials, 13% consumer discretionary and 12% healthcare. ETHI's missing sectors are a real performance drag in years when energy and defence rally — 2022 was a clear example, and ETHI's 12-month return of +3.6% as at May 2026 trails broad-market VGS (+14.4%) over the same window.

ETHI pays distributions semi-annually (late June and late December) at a modest yield. As at May 2026, the trailing 12-month distribution yield runs around 1-1.5% gross. There are no franking credits — the underlying holdings are international. ETHI is currency-unhedged. Over the 5 years to May 2026, ETHI returned +54.4% total return — meaningfully behind VGS (+84.2%) and IVV (+101.8%) over the same window. The performance gap reflects the missing exposure to fossil-fuel and defence companies during 2022-23 energy and defence rallies.

ETHI is the right choice for investors whose values matter as much as returns — particularly those who specifically want to avoid fossil-fuel exposure. The 0.59% MER (vs VGS's 0.18%) is the cost of the screens; the missed energy-rally is the cost of the methodology. For long-term ethical investors, the trade-off is reasonable; for purely return-maximising investors, VGS at one-third the cost is the rational pick. A $10,000 investment in ETHI at its January 2017 launch (with all distributions reinvested) would be worth roughly $26,000 as at May 2026 — an annualised return of about 10.8% per year over the 9-year period.