BNY Mellon Investment Management is developing its first actively managed ETFs, with initial offerings likely to center around sustainable solutions.
According to the latest Securities and Exchange Commission EDGAR filings, BNY Mellon Investment Management is crafting an actively managed BNY Mellon Sustainable US Equity ETF, BNY Mellon Sustainable International Equity ETF, and BNY Mellon Sustainable Global Emerging Markets ETF. ETF tickers and management fees have yet to be announced.
The three actively managed ETFs will be sub-advised by Newton, a leading equity and multi-asset manager with more than four decades of Sustainable and Responsible Investing experience.
Specifically, the BNY Mellon Sustainable US Equity ETF will invest in equity securities of U.S. companies that demonstrate attractive investment attributes and sustainable business practices. The BNY Mellon Sustainable International Equity ETF will hold securities of foreign companies that demonstrate attractive investment attributes and sustainable business practices. Lastly, the BNY Mellon Sustainable Global Emerging Markets ETF will include equity securities of emerging market companies that demonstrate attractive investment attributes and sustainable business practices.
Newton Investment Management Limited considers a company to be engaged in “sustainable business practices” if the company engages in such practices in an economic sense and takes appropriate measures to manage any material consequences or impact of its policies and operations in relation to environmental, social, and governance, or ESG, matters.
“The fund may invest in companies that have committed explicitly to improving their environmental and social impacts that will lead to a transformation of their business models. No investment will be made in a company that is deemed to have material environmental, social or governance issues intrinsic to its business activities, such as a tobacco company due to the health implications of smoking. Newton also may invest in companies where it believes it can encourage sustainable business practices through ongoing company engagement and active proxy voting, such as by encouraging the company’s management to improve the company’s environmental footprint or voting the shares it holds of a company to improve the company’s governance structure,” according to the filling.
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