Many investors look to their portfolios to ensure they align with their values and beliefs. Values ETFs provide one way to do that, but how do they “really” work? It’s one thing to invest in firms that meet one’s ethical or personal standards outside of financial considerations, but how does investing help direct those companies’ actions, and how can one balance investing concerns with those values?
See more: How Jewish Values ETF TOV Invests
For one thing, values ETFs can still provide market upside and exposures. Take the JLens 500 Jewish Advocacy U.S. ETF (TOV). TOV looks to help investors fight antisemitism and support certain key Jewish values through investing. TOV has a similar set of holdings to those found in the S&P 500, helping keep investors pretty close to overall market performance.
So, then, what does the fund do differently that helps its holders express their beliefs in the free market? For one thing, the fund can engage in shareholder advocacy. The fund’s ownership of its portfolio holdings allows its issuers to have a voice on important issues affecting those companies.
In TOV’s case, the fund’s managers and owners look to encourage companies to fight antisemitism and support Israel. Per its prospectus, the fund’s owners also look to support firms based on whether they meet certain values criteria. For example, the fund supports companies that demonstrate their alignment with the Jewish religion’s concept of “Tikkun Olam,” or “repairing the world.”
A values ETF like TOV can help investors express their beliefs in board rooms when firms decide how they want to act on certain issues. For TOV, that relates to a firm’s willingness to stand up for Israel and fight antisemitism. ETFs could focus on other values, for example, Islamic or Christian values. Whatever one’s beliefs, values-based ETFs like TOV can be helpful.
For more news, information, and analysis, visit the Faith Based Investing Channel.
Vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for TOV, for which it receives an index licensing fee. However, TOV is not issued, sponsored, endorsed, or sold by VettaFi. VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of TOV.
