Saying that environmental, social, and governance (ESG) investing is growing in popularity is starting to become a broken record in the capital markets. Still, ESG is music to the ears of investors and the issues they care about, which can only bring good karma via ETFs like the Global X Conscious Companies ETF (KRMA).
KRMA seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Concinnity Conscious Companies Index. The fund invests at least 80% of its total assets in the securities of the underlying index.
The underlying index is designed to provide exposure to companies listed in the U.S. that operate their businesses in a sustainable and responsible manner, as measured by their ability to achieve positive outcomes that are consistent with a multi-stakeholder operating system (“MsOS”), as defined by the provider of the underlying index. Per Morningstar numbers, the fund is up about 15% year-to-date.
KRMA gives investors access to:
- Well-Managed Companies: As the first ETF to utilize the Multi-stakeholder Operating System (MsOS), KRMA offers exposure to companies achieving positive outcomes for 5 key stakeholders: Customers, Suppliers, Stock & Debt Holders, Local Communities, and notably, Employees.
- Rigorous Research: Through the Concinnity Conscious Companies Index, KRMA employs proactive (positive) screens in a proprietary, 3-step process that monitors for consistent achievement, establishing a very high bar for inclusion.
- Depth and Breadth: KRMA applies a wide range of sources that focus on measuring positive outcomes, including fundamental financial ratios to assess for operational efficiency and other long-term value creation indicators.
In anticipation of an ESG-friendly Joe Biden presidency, KRMA jumped above its 50-day moving average and could have more room to run.
ESG ETFs Thriving Despite COVID
Investorplace noted the growing phenomenon known as ESG in a recent article:
“ESG investing considers a firm’s environmental, social and governance factors in its investment philosophy. Despite the challenges posed by the novel coronavirus, 2020 has also seen many consumers as well as investors put values-based living and investing at the center of their actions.”
The article continued:
“In its most recent review of ESG investing, the Global Sustainable Investment Alliance (GSIA) reported that ‘Globally, sustainable investing assets in the five major markets stood at $30.7 trillion at the start of 2018, a 34% increase in two years.'”
“From 2016 to 2018, the fastest growing region has been Japan, followed by Australia/New Zealand and Canada … The largest three regions — based on the value of their sustainable investing assets — were Europe, the United States and Japan.”
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