Although active managers might have been busy polishing their environmental, social, and government (ESG) credentials in the past year, investing in the space is not a stock picker’s preserve. It is important to note that passive funds play a vital role in the ESG space, with most of them have considerable following ranging from iShares Global Clean Energy UCITS ETF (INRG) to conventional indices like the S&P 500.
Most importantly, ESG versions of ETFs have considerable allure compared to other passives since they offer diversified and cheap market exposure. However, those considering using them should check the exposure they are offering since when it comes to ESG ETFs, there are notable differences with index composition.
Northern Trust Asset Management launches two climate-focused ETFs
Sustainability and low volatility ETFs are gaining ground. Recently, Northern Trust Asset Management’s FlexShares ETF launched two climate-focused ETFs. The ETFs include the FlexShares® Developed Market High Dividend Climate ESG UCITS ETF (QDFD) and the FlexShare® Developed Markets Low Volatility Climate ESG UCITS ETF (QVFD). These ETFs represent FlexShares’ first ETFs available in Europe, with more additional funds expected in the future.
Marie Dzanis, Europe, Middle East, and Africa (EMEA) head, said that they are delighted to present FlexShare products in Europe reflecting in Northern Trust Asset Management’s over three decades of experience in the management of sustainability-focused investment strategies. The ETFs have been actively designed with indexing transparency, and they are built specifically to fit within the evolving needs of EMEA investors. They will manage portfolio volatility and bring income to a low-yield environment while focusing on quality.
ETFs to capitalize the portfolio’s ESG exposure and carbon footprint reduction
The strategies will leverage Northern Trust Asset Management’s Quality factor to identify companies exhibiting strength in profitability, cash flow, and management expertise while capitalizing the portfolio’s ESG exposure and carbon footprint reduction. QDFD is an income fund that features stocks exhibiting the high potential of generating incomes combined with ESG and quality to optimize quality, enhance dividend yield and improve ESG ratings. On the other hand, QVFD is a low volatility fund that features stocks showing lower overall absolute volatility cash flow.
Humankind Investment launches ESG ETF
Quantitatively driven asset manager Humankind Investments, which specializes in socially responsible investments, has launched its first ETF, the Humankind US stock ETF (NYSEAMERICAN:HKND). The fund will offer broad exposure to US equities, with a focus on companies contributing to greater value in society as measured by Humankind’s index.
This fund launch is the first in a number of socially responsible ETFs products from the company founded by former Vanguard analyst James Katz in 2019. The company was established with the objective of taking a holistic and more quantitative approach to ESG investing. Katz and his team have over 50 years of combined experience having held various roles at academic institutions and asset management firms. Since its establishment, Humankind has attracted over $100 million in investor assets.
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