Large-Cap US Sustainable Funds Lead Big US Stocks This Year

US large-cap sustainable funds have gained an average of 14.94% in the year through Oct. 30, beating the 10.92% gain of the Morningstar US Large Cap Index. By comparison, the Morningstar US Sustainability Index gained 15.42%, the Morningstar US Market Index rose 17.87%, while the SPDR S&P 500 ETF SPY gained 18.27%.

This article looks at the performance of the largest US sustainable big-cap funds during the same period, as well as of the five top-performing US large-cap sustainable funds so far this year. Sustainable investing has become a focus for many investors who want to generate strong financial returns while supporting environmentally and socially responsible practices.

Methodology

To locate our sustainable funds, we used Morningstar Direct to screen for large-cap US equity. We selected funds from the oldest share class that fell into the sustainable investment overall category. The funds from this screen were ranked by their fund size and then, separately, by total return. We analyzed the largest five sustainable funds and compared them with the SPDR S&P 500 ETF and the Morningstar US Market Index. This yielded 120 funds.

5 Largest US Sustainable Funds

Parnassus Core Equity Fund

“This strategy is one of the pioneers in ESG investing. Relative to other US large-blend options, this strategy’s approach leans more heavily on ESG research to help parse the investable universe and manage risk. The managers narrow the investment universe by screening stocks based on various quality and valuation metrics and look for companies with enduring competitive advantages, increasingly relevant products or services, exemplary management, and ethical practices.”

“In 2025’s first half, the strategy bested the index and landed in the top quartile of peers, thanks in part to picks such as Cigna Group CI and AutoZone AZO helping. Overall, it has captured just 79% of the index’s losses during market drawdowns since (Todd) Ahlsten joined, while rising 92% as much in rallies. Even though the strategy tends to lag when stocks move higher, its asymmetric risk/reward profile has contributed to strong results over full market cycles.”

-Stephen Welch, Morningstar Senior Analyst

• Morningstar ESG Risk Rating: High
• Morningstar Rating: ★★★
• Morningstar Category: Large Blend

You can read our June 20, 2025, interview with Todd Ahlsten here.

Vanguard FTSE Social Index Fund

“The fund tracks the FTSE US Choice Index, which targets large- and mid-cap US companies that comply with its ESG criteria. It excludes companies operating in controversial businesses, violating the UN Global Compact principles for corporate sustainability, or failing FTSE’s diversity and sanction criteria.”

“The fund also leaves out market leaders that don’t qualify for its ESG screens, such as Berkshire Hathaway BRK.A BRK.B and Johnson & Johnson JNJ. In turn, it tilts more toward the remaining mega-cap stocks, which increases concentration in its largest holdings. Its top 10 holdings accounted for 39% of its assets, 6 percentage points higher than the category index, as of April 2025.”

-Lan Anh Tran, Morningstar Analyst

• Morningstar ESG Risk Rating: Above Average
• Morningstar Rating: ★★★★
• Morningstar Category: Large Blend

iShares ESG Aware MSCI USA ETF

“This fund tracks the MSCI USA Extended ESG Focus Index, which captures large- and mid-cap stocks with good ESG practices. The index filters out companies with controversial product lines or those currently involved in severe controversies. An optimizer determines the weightings of the remaining stocks, systematically tilting toward firms with better ESG characteristics while aiming for a 0.5% tracking error versus its parent index, the MSCI USA Index. The fund’s actual tracking error hovered around 0.6% annualized from its 2016 inception through April 2025 –not far from its target."

“The team leverages BlackRock’s industry-leading technology and a robust global infrastructure to consistently deliver tight index-tracking performance in all the global markets that it touches. Automated workflows and the team’s extensive supporting staff effectively minimize potential disruptions caused by personnel changes.”

-Lan Anh Tran, Morningstar Analyst

• Morningstar ESG Risk Rating: Above Average
• Morningstar Rating: ★★★
• Morningstar Category: Large Blend

Vanguard ESG US Stock ETF

“The fund tracks the FTSE USA All Cap Choice Index, which sweeps in US companies compliant with its environmental, social, and governance criteria. The index excludes companies operating in controversial businesses, violating the UN Global Compact principles for corporate sustainability, or failing FTSE’s diversity and sanction criteria. This approach does not exclusively target firms with best-in-class ESG practices, so the resulting portfolio only excludes around 300 names out of the 1,600-plus stocks in its starting universe.”

“ Its top holdings–its main return drivers–have consistently overlapped with those of the average category peer and category index. The fund benefits from its broad, diversified, and low-turnover portfolio like other ESG-agnostic broad index funds.”

-Lan Anh Tran, Morningstar Analyst

• Morningstar ESG Risk Rating: Above Average
• Morningstar Rating: ★★★
• Morningstar Category: Large Blend

Victory Pioneer Fund

“The managers, Jeff Kripke and James Yu, adopt an attractive quality-focused and risk-aware approach. They assess businesses on three pillars: competitive advantages, financial strength, and environmental, social, and governance factors. The resulting portfolio holds 40–50 stocks and is concentrated in its top 10 holdings, and the managers are not afraid to own the big index heavyweights at overweight positions."

“This is a concentrated 40- to 50-stock portfolio. As of June 2025, 45% of the fund’s assets were in its top 10 holdings. This concentration has been consistent, typically 15 to 20 percentage points more than the large-blend category’s Russell 1000 benchmark, since Jeff Kripke took over the portfolio.”

-Chris Tate, Morningstar Senior Analyst

• Morningstar ESG Risk Rating: Average
• Morningstar Rating: ★★★★★
• Morningstar Category: Large Blend

Top-Performing Sustainable Funds

TCW Transform Systems ETF

“This strategy leans toward smaller, more growth-oriented companies than its average peer in the large blend Morningstar Category. Examining additional factor exposure, this strategy has consistently had exposure to high-momentum stocks compared with Morningstar Category peers over the past few years.”

“More importantly, when looking across a longer horizon, the strategy surpassed the index. On a three-year basis, it outperformed the index by an annualized 4.4 percentage points.”

-Morningstar Manager Research

• Morningstar ESG Risk Rating: Low
• Morningstar Rating: ★★★★★
• Morningstar Category: Large Blend

Invesco ESG NASDAQ 100 ETF

“The investment seeks to track the investment results (before fees and expenses) of the Nasdaq-100 ESG Index (the “underlying index”). The fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index. The underlying index is designed to measure the performance of companies included in the Nasdaq-100 Index (the “parent index”) that also meet the index provider’s ESG criteria.”

-Morningstar Manager Research

• Morningstar ESG Risk Rating: High
• Morningstar Rating: ★★★★★
• Morningstar Category: Large Growth

Alger Responsible Investing

“The strategy gets a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy’s portfolio shows it has maintained an overweight in yield exposure and an underweight in momentum exposure compared with category peers. High-yield exposure is attributed to holding more stocks with high dividend or buyback yields.”

“The most meaningful contributor to the rating is the stability of the management team. Specifically, the fund has not seen a manager change in the last eight years. The management team’s listed portfolio management experience, which averages 32 years, also bolsters the rating.”

-Morningstar Manager Research

You can read Morningstar’s Oct. 17, 2025 interview with Alger CEO Dan Chung here.

• Morningstar ESG Risk Rating: High
• Morningstar Rating: ★★★
• Morningstar Category: Large Growth

Victory Pioneer Fund

“Over rolling three-year periods during that span, the fund beat the prospectus and category benchmark at least 73% of the time. Stock-picking in the technology and industrials sectors stood out, but positive contributions spanned the style spectrum.”

“The two managers have built an exceptional track record. From Kripke’s start through July 2025, the A shares’ return outpaced the S&P 500 prospectus benchmark by 60 basis points annualized to land in the large-blend Morningstar Category’s top decile. Positioning during drawdowns and the subsequent rebounds, as well as typically avoiding big losers, have been hallmarks for the most part.”

-Chris Tate, Morningstar Senior Analyst

Morningstar ESG Risk Rating: Average Morningstar Rating: ★★★★★

Morningstar Category: Large Blend

Parnassus Growth Equity

“The process benefits from its relatively concentrated portfolio, with its top 10 holdings accounting for 50% of assets. High-conviction picks court the risk of blowing up, but can also drive outperformance. However, the rating is limited by the parent firm’s five-year risk-adjusted success ratio of 25%. The measure indicates the percentage of a firm’s funds that have outperformed their respective category’s median return for the period.”

“In the last two years, the fund’s Institutional share class has returned 30.1%, compared with the 33.6% return of the category benchmark, the Russell 1000 Growth Index, for the same period. However, it surpassed peers, as the category’s average return for the period was 29.6%.”

-Morningstar Manager Research

• Morningstar ESG Risk Rating: Above Average
• Morningstar Category: Large Growth