The world of exchange trade funds has become recognized for offering a plethora of sector-specific and niche funds that cater to investor interest.
These funds have been as diverse as targeting builders in the 5G space to concentrating on renewable energy sources. A proposed ETF entrant is now related to social equality and civil rights. Financial data company LGBTQ Loyalty Holdings, Inc. (pink:LFAP) is set to launch an exchange traded fund linked to the LGBTQ+ ESG100 Index in the first quarter of 2021, and perhaps sooner depending upon on market conditions.
Earlier this year, the Florida-based company had prepared to launch its ETF, which will trade under the ticker “LGBT” on the Nasdaq, but the fund launch was hijacked by the coronavirus pandemic, and therefore was postponed.
“Due to the unprecedented volatility of the financial markets caused by COVID-19 and the extreme market concerns this pandemic has created in the retail investing world since February of this year, our Board of Directors believe it is in the best interest of our shareholders and advocates to support the decision to launch in the first quarter of 2021 or sooner if market conditions change,” according to the firm.
“The company is in the process of finalizing all necessary steps to rebalance and reconstitute the index under the current methodology.”
Burgeoning Universe of ETFs
When LGBT hits the market, it will become a part of a burgeoning universe of ETFs that further the environmental, social, governance theme into more singular issues, including racial equality and human rights. This is likely to appeal to a segment of investors with such interests, as other environmental, social, and equality related ETFs have proven popular recently, given the hotbed of activity in those areas.
LGBT’s underlying index “represents the top 100 hundred LGBTQ equality-driven U.S. companies from a universe of 500 publicly traded large-cap corporations. The companies are also screened to insure they meet our methodology ESG compliance, by a world leading provider of corporate governance and responsible investment,” according to LGBTQ Loyalty Holdings.
LGBTQ Loyalty Holdings, Inc. has done its research, and back-tested data illustrate that a $10,000 investment in that index five years ago would have returned an impressive 88%, drubbing the S&P 500 by almost 3,300 basis points over that period.
“Pressing corporations to implement diversity and ensure that their practices represent a commitment to LGBTQ equality is important,” said Barney Frank, former U.S. Congressman and LGBTQ Loyalty board member. “So is providing a positive incentive. Giving the LGBTQ community, and our friends and allies, a way to do this through their investments is the best example of this approach. I am proud to be a part of this effort, which brings together two of the major themes of my work in Congress: a financial system that serves both private and public needs, and human rights,” added Frank.
The new ETF will also feature 100 components from 11 sectors, with technology and health care names composing more than 45% of the fund’s weight.
The fund’s founders believe the time is right for the fund to be successful.
“The company and our supporters believe that the world is ready for a financial product to serve the principles and core values of the LGBTQ community and our allies. Advancing equality and supporting the LGBTQ community is at the forefront of our company,” stated the company’s press release.
“It is imperative we launch the ETF at the most appropriate time as our community and allies are counting on us. The application of prudent timing and execution will serve advancing LGBTQ equality for generations to come,” said Bobby Blair CEO.
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