Ethical investing has moved firmly into the mainstream, and screened global Equity funds have become a core holding for many Australians. The Betashares Global Sustainability Leaders ETF (ASX: ETHI) offers a diversified basket of large global companies that pass a series of sustainability screens. After a steady twelve months and strong longer-term returns, the fund has kept climbing quietly, prompting investors to ask whether its blend of ethical screening and exposure to global quality-growth leaders can keep delivering into 2026.

What the ETF Does

This ETF is a passively managed fund that invests in a diversified portfolio of large global companies selected against a set of ethical and sustainability criteria. The screens exclude businesses involved in areas such as fossil fuels, tobacco, gambling and weapons, and favour companies identified as climate leaders, which in practice tilts the portfolio toward technology, healthcare and consumer names listed mainly in the United States and Europe. It tracks a rules-based sustainability index and holds a broad spread of companies, though the screening gives it a growth-leaning character. This version is unhedged, so returns for Australian investors also reflect currency movements. The fund trades on the ASX like an ordinary share, offering a screened, globally diversified equity exposure in a single holding for values-aligned investors.

Why It Is in Focus

Sustainability-screened funds remain among the most popular Options for investors who want global equity exposure aligned with ethical preferences, and this fund has been one of the larger such funds on the ASX. Its heavy tilt toward global technology and quality-growth names ties it closely to the broader market debate about whether those leaders can sustain their gains. The combination of an ethical mandate and steady recent performance keeps this ETF in focus as investors weigh both their values and the valuations behind the portfolio.

What Could Drive It Next

With a heavy weighting to large technology and quality-growth companies, this fund's direction is closely tied to those market leaders and to Earnings from artificial intelligence, software and healthcare. Being unhedged, currency moves between the Australian dollar and offshore currencies affect returns. Continued inflows into ethical strategies could support the theme. Because a handful of mega-caps carry significant weight, their results and guidance will shape the fund's near-term path more than broad market averages.

Risks to Watch

The tilt toward large growth and technology names delivers strong gains in good times but exposes the fund to sharp pullbacks if those leaders stumble. The ethical screens reduce Diversification by excluding whole sectors such as energy and resources, which can cause the fund to diverge from the broad market. As an unhedged fund, a stronger Australian dollar would erode returns. Valuations across the growth cohort are elevated, leaving room for disappointment on earnings.

Closing

This ETF pairs an ethical, sustainability-screened mandate with exposure to global quality-growth leaders, and its steady record reflects a favourable run for that style. Whether the quiet climb continues depends heavily on the same mega-caps driving markets broadly, so investors should weigh the fund's concentration and currency exposure alongside its screens.