Purpose Investments is set to launch Europe’s first ETF targeting enterprise software companies with the product featuring an environmental, social and governance (ESG) tilt.

The Purpose Enterprise Software ESG-S UCITS ETF (SOFT) will list on the London Stock Exchange in late July with a total expense ratio (TER) of 0.59%.

Tracking the Solactive Purpose Enterprise Software ESG Screened index, SOFT will provide exposure to software as a service (Saas) companies.

The index has 54 constituents, including household names such as Adobe, Shopify and Twitter and lesser-known holdings including Paycom Software, Palo Alto Networks and Hubspot. 

The benchmark has returned 501.9% since its inception in June 2017 with average annual volatility of 31.6%, according to data from Solactive.

As well as focusing on a specific part of the software sector, SOFT is classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR) by excluding companies involved in controversial weapons and fossil fuels.

Som Seif, founder and CEO of Purpose Investments, commented: “The global pandemic drove unprecedented growth in the [software] sector, as businesses were forced to pivot and further embrace digitisation, and we believe these trends will have long lasting implications. 

“As the global economy continues to recover, SOFT will provide investors with exposure to the varied, and ESG screened, selection of companies at the forefront of the digital revolution.” 

White-label ETF issuer, HANetf, will partner with Purpose Investments on the launch, making it their third combined venture after debuting Europe’s first cannabis ETF, The Medical Cannabis and Wellness UCITS ETF (CBDX), in January 2020 and Europe’s first carbon-offset ETF, the HANetf S&P Global Clean Energy Select HANzero UCITS ETF (ZERO), in June 2021.

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