What Is DSI? iShares ESG MSCI KLD 400 ETF

The mechanism is arithmetic rather than intent. Start from a broad US index, exclude companies that fail the social and environmental criteria, and reweight the survivors by market value. The excluded names tend to sit in energy, tobacco, weapons, gambling and firms with unresolved controversies. Their weight has to go somewhere, and in a cap-weighted structure it flows to the largest remaining companies, which are technology businesses.

The result is visible at the top. NVIDIA at 13.3% is more than an eighth of the entire fund in one stock. Reading the holdings table at face value understates the second position, because Alphabet's Class A shares at 6.0% and Class C shares at 4.7% are the same company under two tickers: the real position is 10.7%, ahead of Microsoft at 7.6%. Together, NVIDIA and Alphabet are roughly a quarter of the fund. The ten largest holdings come to 44.4%.

Below them sit Tesla at 3.4%, AMD at 2.7%, Intel at 1.8%, Visa at 1.7%, Applied Materials at 1.6% and Lam Research at 1.6%. Four of those six are semiconductor businesses. An index of 400 socially screened companies has ended up with a large, specific exposure to the chip cycle, which is not something a buyer would infer from the fund's description.

Screens of this family exclude companies involved in tobacco, alcohol, gambling, weapons, nuclear power, adult entertainment and, in most versions, fossil fuel extraction, along with those carrying severe unresolved governance or human rights controversies. Energy is entirely absent from the fund's five largest sectors, which for many buyers is the intended outcome and the main practical difference from a broad index fund.

This is a stricter approach than the optimisation-based ESG funds that aim to track a parent index closely. Holding 400 companies from a universe of thousands is a real restriction, and the fund will diverge from the broad market by more than a lightly screened alternative would. That divergence runs in both directions and has nothing to do with skill.

It also means accepting someone else's definition of the criteria. Rating providers reach different conclusions about the same company, and a screen that keeps Tesla and semiconductor manufacturers while excluding energy producers embeds a particular set of judgements about supply chains, resource use and labour. Anyone with specific exclusions in mind should check the current holdings against them rather than relying on the label.

At 0.25%, the fee sits well above unscreened broad market index funds and in the normal range for screened products. That difference is the ongoing cost of the methodology, and over long holding periods it compounds. The 0.87% yield is low, consistent with a portfolio weighted toward technology companies that reinvest rather than distribute.

The concentration is the practical issue. With 44.4% in ten holdings and a single stock at 13.3%, this is not a diversified core holding in the way its 400-name count suggests. A large move in NVIDIA moves the fund noticeably, and the semiconductor cluster beneath it amplifies rather than offsets that.

The reasonable use is as a US equity allocation for an investor who wants the exclusions applied and understands what the remaining portfolio looks like. The unreasonable use is treating it as equivalent to a total market fund with a clean conscience attached. The two hold materially different things, and the difference will show up in returns in both directions, particularly around the semiconductor cycle.

Approximate weights as of August 2026. Each ticker links to its individual stock guide in Walnut.

There are three common ways to get DSI exposure. Buy shares (or fractional shares) of DSI directly at any major broker that lists it. Hold it as a core position and layer more concentrated ideas on top. Or build it into a thematic portfolio in Walnut, so DSI sits alongside other holdings that express the same thesis, with target weights you can rebalance toward. DSI trades like a stock during market hours, so you buy it the same way you would any listed share.

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Whether DSI is a good buy depends less on any single call and more on your time horizon and what you already hold: it tracks the MSCI KLD 400 Social Index, so the real question is whether you want that exposure in your mix and at what weight. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is DSI a buy?

DSI gives you the MSCI KLD 400 Social Index exposure in one ticker at a 0.25% expense ratio. Most investors use it as a core holding and layer more concentrated thematic portfolios on top.

Whether DSI is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is DSI a buy?

DSI yields 0.87% as of August 2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see DSI dividend: yield and schedule.

New to funds like DSI? Start with what an ETF is, then how to buy an ETF, or browse the full guide to ETF investing.