On Wednesday, Humankind Investments, a quantitatively driven asset manager specializing in socially responsible investments, announced the launch of its first ETF, the Humankind US Stock ETF (NYSE Arca: HKND). The fund seeks to provide broad exposure to US equities with a focus on companies that contribute the greatest value to society, as measured by Humankind’s proprietary index.
This fund launch marks the first in a series of socially responsible ETF products from Humankind Investments, a firm started by CEO and former Vanguard analyst James Katz in 2019 with the goal of taking a more quantitative and holistic approach to ESG investing. Katz and his team bring 50+ years of combined experience to the firm, with previous roles at leading asset management firms and academic institutions. Since its founding, Humankind has attracted over $100 million in investor assets.
“Amid the increasingly crowded sustainable investing landscape, we launched Humankind to bring a fresh, unified, scientific approach to the ESG discourse. While many managers develop ESG strategies as just one part of a broader platform of active and passive offerings, Humankind is exclusively focused on socially responsible investing,” said Katz.
He continued, “This commitment is reflected in the corporate DNA of the Humankind US Stock ETF – to our knowledge, it’s the first Registered Investment Company organized as a benefit corporation. But what truly distinguishes our process are the proprietary quantitative models we use to measure societal impact, which incorporates a wider scope of issues than what is typically reflected in traditional financial measurement.”
Stronger, Better, Equitable
HKND leverages the firm’s proprietary Humankind US Equity Index to track the top 1,000 US companies that promote healthier, safer, more equitable, and longer lives. The Index’s ranking is based on a quantitative analysis of each company’s positive and negative contributions to society as measured by its impact on investors, consumers, employees, and citizens – defined as its “Humankind Value.” This pioneering concept is captured by a single dollar figure that is meant to represent a company’s true social and economic value to humanity.
The firm’s Index scoring methodology draws on a combination of nationally recognized third-party data providers, as well as academic research, government data, and NGO data to evaluate a universe of domestic US companies. Those that gain inclusion within the Index are weighted based on their Humankind Value, subject to liquidity and diversification constraints.
“We developed our Humankind Value score with the belief that traditional investment analysis, with its typically narrow focus on standalone financial performance, fails to fully capture a company’s ability to remain sustainable and competitive in the long run,” added Katz. “By concentrating our investments in the companies that maximize value across a wider range of key stakeholders and thematic issues, we aim to promote the best possible outcomes for people as both investors and as human beings.”
Sustainable ETFs are increasingly attracting investor interest, becoming a more frequent tool for investors looking for socially conscious investment options, particularly amid the pandemic and growing climate change concerns. In 2020, investors put a record $27.4 billion into US-listed ETFs that focus on ESG practices, according to data from FactSet.
For more information, visit https://www.humankind.co/.