From Greenwashing to Greenhushing: The Rise of ‘Anti-ESG’ ETFs
A backlash to so-called woke investments spurred interest in their anti-woke counterparts. But is it a new strategy or just marketing hype?

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ETFs claiming to shun companies that prioritize environmental, social and governance principles are on the rise. But how different are these strategies from other funds?
While the number of so-called “anti-ESG” ETFs has risen steadily in recent years, with the most recent fund launching just last month, sometimes the difference between them and vehicles that selected financial products without regard to ESG practices is more in the marketing materials than the investment choices. “[Managers] were saying they were going to invest in companies that were not focused on ESG, or they were going to invest and not take into account ESG,” said Hal Lambert, founder of Point Bridge, which launched one of the first overtly conservative funds in 2017. “But that’s how a lot of people invest already.”
Analyzing the burgeoning “anti-woke” market is made even more difficult by the lack of clear standards to define ESG and diversity, equity and inclusion, or DEI, practices. Used as finance-industry shorthand for what some investors consider liberal ideologies, the terms’ meanings vary based on the person or organization employing them.
ESG-y Does It
The Point Bridge America First ETF (MAGA), which is classified as an anti-ESG fund by Morningstar, launched in 2017 to track companies with PACs supporting Republican candidates. Although the fund did better under President Joe Biden than during President Donald Trump’s first term, Lambert said that it’s doing “extremely well” compared to an equally weighted S&P 500. “I did this because people were out protesting companies. They were upset at Disney, Nike, Target,” he said. “I’m looking at this going, ‘You don’t realize you own those stocks in your mutual funds and your 401(k) funds.’”
The most recent addition to the landscape is the Azoria 500 Meritocracy ETF, launched last month by James Fishback, an adviser to the Department of Government Efficiency, established earlier this year under President Trump. Fishback said the fund was meant to invest only in firms that don’t take gender or race into account when hiring, responding to the anti-DEI backlash that swept through American industry at the start of the second Trump era. Other funds capitalizing on it include:
- The God Bless America ETF (YALL), launched in 2022, which attempts to avoid investing in companies that engage in DEI initiatives or that fund “radical social movements,” per the fund’s website.
- The Constrained Capital ESG Orphans ETF (ORFN), also launched in 2022, which tracks companies typically left out of ESG-focused portfolios.
- The American Conservative Values ETF (ACVF), launched in 2020, which tracks US companies with perceived conservative values.
Some funds that label themselves anti-ESG, however, can’t really keep the promises they make, Lambert says. Removing companies that prioritize DEI from a fund’s holdings, for example, is easier today, as more and more companies revoke their DEI policies. Other strategies tend to either ignore certain sectors at the expense of higher returns or track the S&P 500 while charging comparatively high fees. (MAGA’s expense ratio is 0.72%.) Still, some of these funds continue to pique investor interest, with Strive’s US Energy ETF (DRLL), which tracks the energy sector but is heavily weighted toward oil and natural gas, and the Inspire 100 ETF (BIBL), which invests in what it calls “biblically aligned” large-caps, each having assets over $300 million.
A-Woke, My Love!
The retreat from ESG was illustrated last year when only 1% of shareholder resolutions supporting ESG practices across 70 of the largest asset managers received majority support, compared with almost a quarter in 2021. Critics get ESG wrong, however, when they assume it’s just a matter of “woke investing” as opposed to due diligence, said Peter Krull, partner at Earth Equity Advisors. ESG investing isn’t just about making an impact, but about whether a company’s strategy is viable in the long term, he said.
A coastal operation in Florida, for example, is susceptible to hurricanes in a way that a midwestern company isn’t. Investors are still putting their money in sustainable companies without advertising it, he added, a practice known as “greenhushing.” “They understand the importance of actually moving beyond the fundamentals, beyond a P/E ratio, or a company’s growth rate, or debt levels,” Krull said. “It’s looking to see what other risks aren’t being addressed in fundamentals or traditional equity research that can give a leg up over somebody else.”
Research suggests greenhushing may not be as effective as it seems, since some businesses weren’t invested in sustainable causes to begin with. Rather, they’ve simply stopped claiming to be engaging in sustainable operations. Companies like Nestlé and Nike dropped their “previously unsubstantiated” commitments to carbon neutrality, according to an analysis from the nonprofit NewClimate Institute.
A lack of standardization also precludes any true clarity about what is pro- or anti-ESG. Ratings on the research site Sustainalytics, for example, are going to differ from those on MSCI or another platform. Krull said his firm is tasked with deciding how they’re “going to tell the story in a way that people will pick up the phone or send us an email and say, ‘Hey, we want to work with you guys’ … Just saying we do ESG doesn’t honestly tell a damn thing.”
In These Polarized Times
Launching anti-ESG and anti-woke ETFs is simply the latest attempt by firms and asset managers to take advantage of an increasingly politically charged environment, said Maggie Kulyk, founder of Chicory Wealth, which focuses on socially responsible investing. “If there are firms that dabbled in trying to offer some product that had ESG slapped on it, but weren’t very serious about it to begin with, and are now exiting — fine,” Kulyk said. “You weren’t really committed to the thing to begin with.”
The labels have become more extreme, but the underlying holdings mostly stay the same, she said. “You’ve got a fund that includes things like controversial weapons and civilian firearms and tobacco, for example, but [it] still has 82% of its holdings with at least a 30% female board representation,” Kulyk said. “If you’re really anti-woke, why don’t you get those out of there?”
Krull predicts that investments in overtly ideological funds will continue to ramp up as political polarization drives investor decision-making. He said his firm, which also focuses on socially responsible investing, saw its AUM go up faster during Trump’s first term than it did during Obama’s time in office because people who felt politically powerless were trying to make a difference through sustainable investing. The same thing happened this time around, he added: “I wouldn’t be surprised if you saw … a divergence of these two philosophies.”