Environmental, social and governance, or ESG, exchange traded fund strategies are gaining traction in the investment community as more clients seek investments that align with their values.
On the upcoming webcast this Tuesday, Jan. 16, The Evolution and Expansion of ESG Investing, Jordan Farris, Head of ETF Product Development for Nuveen, and Max Mintz, Financial Advisor at Common Interests, will delve into the growth of ESG investing, the opportunities it may provide your clients, and how to incorporate ESG focused products into your practice.
For instance, the NuShares ESG U.S. Aggregate Bond ETF (NYSEArca: NUBD) helps fixed-income investors pair their bond investment needs with environmental, social and governance principles.
The ESG U.S. Aggregate Bond ETF tries to reflect the performance of the Bloomberg Barclays MSCI US Aggregate ESG Select Index, which screens for certain environmental, social and governance, or ESG, criteria when selecting from securities taken out of the benchmark Bloomberg Barclays US Aggregate Bond Index, a broadly designed index that captures U.S. investment-grade, taxable fixed income securities.
Environmental assessment categories can include a company’s impact on climate change, natural resource use, and waste management and emission management. Social evaluation categories can include a company’s relations with employees and suppliers, product safety and sourcing practices. Governance assessment categories can include governance practices and business ethics, according to the prospectus.
The ESG criteria also consider how a company follows national and international laws and regulations, along with commonly accepted global norms related to ESG matters. The underlying index exclude companies with significant activities in certain controversial businesses, including those involving alcohol, tobacco, nuclear power, gambling, and firearms and other weapons.
Investors can also fill out their equity portfolio with ESG-related ETFs, such as the NuShares ESG Large-Cap Value ETF (BATS: NULV), NuShares ESG Large-Cap Growth ETF (BATS: NULG), NuShares ESG Mid-Cap Value ETF (BATS: NUMV), NuShares ESG Mid-Cap Growth ETF (BATS: NUMG) and NuShares ESG Small-Cap ETF (BATS: NUSC), which screen companies of various market capitalization and asset categories for environmental, social and governance principles.
Financial advisors who are interested in learning more about environmental, social and governance-related strategies can register for the Tuesday, January 16 webcast here.