Invest With Impact: The Importance of Transparency in a Portfolio

Increasingly, research shows that transparent companies can be effective impact investments. Transparent companies, by opening their books and holding themselves accountable to investors, ultimately engage in fewer business controversies and environmental violations that significantly impact portfolio returns.

In the upcoming webcast, Invest with Impact: The Importance of Transparency in a Portfolio, Thomas Hartmann-Boyce, client portfolio manager at ARK Invest, and Paul A. Pagnato, chairman at Transparency Invest and co-chairman at Cresset, will discuss the investment case for transparent companies for investors searching for growth opportunities.

Ark Invest Management has launched the ARK Transparency ETF (CBOE: CTRU) to help investors follow companies with a high level of transparency around their corporate actions. CTRU has a 0.55% expense ratio.

CTRU tracks about 100 companies based on Transparency Invest’s proprietary scoring methodology. Firms receive a higher rating in Transparency Invest’s rankings if they have shorter terms and conditions pages and fewer lawsuits, or if they reveal the full costs of items and services on their websites and score high on corporate reputation rankings.

“ARK believes that transparency serves as a catalyst for innovation and positive change, enhancing the performance of companies while benefiting the well-being of all,” ARK’s founder, CIO, and CEO, Cathie Wood, said in a note. “Transparency implies openness, communication, accountability, and trust, and should be a cornerstone of modern society and business. Given our own belief in the value of transparency, we were impressed by the methodology developed by Transparency, LLC to determine the most transparent companies in the world and we are excited to bring this truly innovative fund to the market!”

The fund also exhibits some socially responsible or environmental, social, and governance characteristics. The underlying index excludes exposure to (i) alcohol, (ii) banking, (iii) chemicals, (iv) confectionary, (v) fossil fuel transportation, (vi) gambling, (vii) metals, (viii) minerals, (ix) natural gas, (x) oil, and (xi) tobacco, according to a prospectus sheet.

Underlying components included in the index are also equally weighted, and it is rebalanced quarterly.

Financial advisors who are interested in learning more about the transparent investment strategy can register for the Thursday, December 9 webcast.