Environmental, social, and governance (ESG) investing has something for everybody in terms of the issues they care about. For the animal lovers, they’ll want to check out the US Vegan Climate ETF (VEGN).
“ESG, or environmental, social and governance, investing has grown progressively more popular over the past couple of years,” wrote David Dierking on an article on The Street. “The idea of investing while at the same time avoiding “sin stocks” in the areas of oil drilling, gambling, weapons manufacturing, and other similar industries has proven to be an intriguing idea for many investors, particularly millennials, who wish to take a social stance with their portfolios.”
VEGN seeks to track the performance, before fees and expenses, of the Beyond Investing US Vegan Climate Index. The index’s construction begins with the constituents of the Solactive US Large Cap Index, consisting of approximately 500 of the largest U.S.-listed companies.
“The U.S. Vegan Climate ETF (VEGN) screens for a variety of ESG considerations, primarily animal harm and exploitation, as well as fossil fuels, environmental damage, and human rights. VEGN follows a cap-weighted index, so it’s heavily tilted towards large-cap names,” wrote Dierking. “In a way, the name of the fund is a bit of a misnomer. Investors may have the notion that the fund invests in companies strictly tied to the vegan lifestyle, such as Beyond Meat (BYND). In reality, it’s just excluding companies that engage in the practices detailed above.”
Getting Broad ESG Exposure
ESG has proven its mettle even amid the coronavirus pandemic. Even as economies around the world begin to reopen their doors, investors can gain exposure to ESG as equities indexes continue to recover, such as the S&P 500—that’s where the Xtrackers S&P 500 ESG ETF (SNPE) comes into play.
SNPE seeks investment results that correspond generally to the performance, before fees and expenses, of the S&P 500 ESG Index. The index is a broad-based, market capitalization weighted index that provides exposure to companies with high ESG performance relative to their sector peers while maintaining similar overall industry group weights as the S&P 500 Index. The fund uses a full replication indexing strategy to seek to track the underlying index.
Taking a closer look at SNPE’s holdings, it has a nice mix of technology household names—a must in the current market environment as a heavy reliance on tech is apparent given the number of countries implanting lockdown restrictions and social distancing measures. Continued reliance on tech will continue as people adjust to the coronavirus pandemic.
At a paltry 0.11% expense ratio, SNPE also offers ESG exposure at a low cost. For more information on the fund, click here.
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