“A common hesitation among investors when considering ESG strategies is uncertainty around performance,” said Global X in a recent note. “While many investors would prefer to align their investments with their principles, few are willing to accept lower returns in exchange. To that end, we looked into how KRMA’s index has performed relative to the S&P 500 and other indexes. The result: KRMA’s index has outperformed these indexes since inception, indicating that this ESG strategy has not had to come with tradeoffs.”
Connecting With KRMA ETF
The strategy draws on dozens of sources to identify companies that have demonstrated a long term focus on creating positive outcomes for five stakeholder groups, including employees, customers, communities, suppliers, and stock and debt holders, according to Global X.
KRMA holds 140 stocks, over a third of which hail from the technology and healthcare sectors. Consumer discretionary and industrial names combine for over 27% of the fund’s weight.
KRMA’s underlying index identifies “companies for based on their demonstrated ability to achieve positive outcomes for five key stakeholders: 1) customers; 2) employees; 3) suppliers; 4) local communities; and 4) stock & debt holders. This makes KRMA’s index an inclusionary methodology – Companies have to earn their way into the index – rather than an exclusionary one, where companies are removed from a prominent index for failing to meet certain requirements,” according to Global X.
For more information on socially responsible investment strategies, visit our socially responsible ETFs category.