The socially responsible investment theme has grown in popularity as more investors try to align personal beliefs with their own investment outcomes, and within the steadily expanding ETF, fixed-income investors may now have another option to choose from.
“Investors are realizing that ESG strategies do not require a sacrifice in returns. Combining this mindset with the rapidly growing popularity of ETFs makes the timing perfect.” Robert G. Smith, President and CIO at Sage Advisory, said in a note.
On Monday, Sage Advisor launched the Sage ESG Intermediate Credit ETF (CBOE: GUDB), which has a 0.35% expense ratio.
The new Sage ESG Intermediate Credit ETF will try to reflect the performance of the Sage ESG Intermediate Credit Index, which consists of corporate bonds selected from the Barclays Capital U.S. Intermediate Credit Bond Index that meet Environmental, Social and Governance (ESG) criteria, according to a prospectus sheet.
Specifically, the underlying index uses the Sage/Sustainalytics proprietary methodology to assign each debt issuer in the Barclays Capital U.S. Intermediate Credit Bond Index an ESG score from 1 to 100. To be eligible for inclusion in the Index, an issuer must have a minimum overall ESG score of 50 and must rank in the top third of its peer group. Additionally, each issuer must have a Controversy Score of no higher than 3 out of 5 and must meet certain other proprietary conditions specific to each industry group.