ETF Series Solutions lists a fossil fuel free ETF
ETF Series Solutions, of Brand Value ETF fame, is listing an ESG ETF with a bite, The Change Finance Diversified Impact US Large Cap Fossil Fuel Free ETF (CHGX).
CHGX uses a purpose-built index made up of 100 US businesses and REITs.
Its index is built by screening stocks in the Solactive US Large & Mid Cap Index for their ESG footprints. Oekam Research, a German sustainability ratings agency, looks at what industry companies are in and immediately excludes those in oil, gas and coal. Companies in weapons, nuclear power, pesticides and GMO receive negative scoring but are not ipso facto excluded. Oekam then looks at whether companies have a "history of controversial business practices". Controversial practices can include environmental destruction, treating employees badly, rampant tax avoidance and negligent safety records.
What companies remain are then sorted by sector, ranked by market cap and the top 100 selected. Selected companies receive an equal weight of 1%. Companies are deliberately chosen such that the sector balances corresponds to the Solactive US Large Cap Index. "For example, if the technology sector makes up 13.27% of the Solactive US Large Cap Index, the 13 largest technology Eligible Companies will be included in the Index with a total weight of 13%," the prospectus says.
Canadian issuer Evolve has its car innovation ETF on the OTC market in the US. The Evolve Automobile Innovation Index ETF (EATOF) invests in companies that help develop electric gearboxes, self-driving or network services for cars. It is the first ETF that tracks an index of this type.
Today's news from around the webWarren Buffet willing to bet again
Having won a major bet that the S&P 500 would beat a basket of hedge funds, the oracle of Ohama is willing to make the same bet again. He says that active managers can never hope to beat the index. And even if they outperform it, their fees are so high that they will erode their performance.
Larry Fink: ETFs will take 15% of bond market by 2022
BlackRock boss says that ETFs will play an increasingly large role in ETFs as they allow investors to pick and vary their exposure to debt. Right now passives account for only 1 percent of the global bond market. In five years from now, Mr Fink says, that'll be closer to 15 percent.
Assets in index-tracking funds still a minority
The global equity market is worth $68 trillion. Of this, only $12 trillion sits in funds that track an index, new research from BlackRock has found. By contrast roughly $17 trillion sits in actively managed funds - almost 50 percent more. The other $40 trillion is held by governments, pension funds and businesses without oversight by asset managers of any kind.