Hartford Funds announced the launch of its first ESG-focused exchange traded fund, HEET, yesterday. The fund will seek to achieve a better ESG profile compared to its benchmark, the Russell 1000 Index. HEET will be sub-advised by Schroder Investment Management North America Inc. and Schroder Investment Management North America Ltd. Ashley Lester, PhD, Head of Systematic Investments at Schroders, has been tapped to manage the new ETF.
“The Hartford Schroders ESG US Equity ETF enables us to offer a flexible, cost-effective strategy that is designed to help investors achieve their long-term investment goals, while also having a positive influence on our world,” said Vernon Meyer, Chief Investment Officer at Hartford Funds. “We believe that applying ESG principles to an ETF, and leveraging Schroders’ quantitative investing expertise and proprietary approach to ESG investing, can provide stronger returns and make for a better investor experience on multiple levels.”
The fund will measure strength of environmental practices, climate change impact, and stakeholder relationships, as well as other ESG factors. It will utilize a systematic investment approach developed by Schroders that looks at value, profitability, momentum, and low volatility. The fund seeks to have a carbon footprint under half of the footprint of its benchmark. This footprint will be measured by carbon emissions divided by sales.
Investors are increasingly factoring in ESG practices as they decide how to assemble their portfolios, as companies that are mindful about ESG practices tend to also be mindful in other contexts.
HEET is listed on the CBOE BZX Exchange and has an estimated expense ratio of .39%. It has $2.5 million in AUM, with top holdings that include 6.44% in Apple Inc. and 6.06% in Microsoft.
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