Newcomer Debuts Socially Responsible ETF

October 10, 2017

Today, ETF newcomer Change Finance has rolled out a fund that seeks to target firms exhibiting high levels of environmental, social and corporate responsibility. The Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free ETF (CHGX) focuses on far more than just the issue of fossil fuel usage or involvement.

The fund lists on the NYSE Arca exchange and comes with an expense ratio of 0.75%.

Change Finance is an asset manager that is majority women-run and that has roots in climate change activism.

“Our investors want alignment with what they care about, without sacrificing performance. Fossil fuel-free is essential, but CHGX then goes further, divesting not only from companies who dig up, refine, burn and service fossil fuels, but also from companies that are serious polluters, that have significant human or labor rights violations, and that fail to meet a variety of other social and environmental standards,” said Change Finance CEO Donna Morton, who refers to CHGX as “a new chapter in investing.”

Methodology

CHGX’s index draws its components from the 1,000 largest U.S.-listed companies as reflected by the Solactive US Large & Mid Cap Index, relying on a scoring methodology provided by German analyst firm Oekom Research AG.

Companies operating in the oil, gas, coal and tobacco industries are excluded from consideration, while the remaining companies are scored on the type of products they offer; their history of business practices including with respect to human and labor rights and the environment; and their environmental and human impact, according to the prospectus.

To be considered for inclusion, companies must meet minimum score requirements. Sector weights reflect those of the Solactive US Large Cap Index, while individual companies are equal-weighted across the index.

In an example provided in the prospectus, this means that if the weight of the technology sector is 13% in the large-cap index, the methodology selects the largest 13 companies from the technology sector that remain in the selection universe.

Contact Heather Bell at [email protected]

 

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