Today InsightShares, an ETF issuer linked to UBS and focused on “cause-based” investments, is rolling out a fund that targets companies that support veterans by hiring them. The InsightShares Patriotic Employers ETF (HONR) tracks an index based on Victory Media’s Military Friendly Employers list, which is updated annually.
HONR comes with an expense ratio of 0.65% and lists on the NYSE Arca.
"This ETF provides investors with exposure to companies that recognize the value of our nation's veterans to the workforce," said Richard Cea, executive director of exchange-traded products at UBS.
"We believe this is an innovative way for investors to express their support for the veteran community,” he added.
Victory Media is a veteran-owned media company that targets the military community. To be included on its list of military-friendly employers, a company must meet a certain number of criteria regarding the hiring, retention and advancement of veterans as well as compliance with legal protections aimed at veterans.
They also must not have any claims or complaints filed against them with the U.S. Departments of Labor or Defense or the Consumer Financial Protection Bureau regarding their treatment of veterans, and they must not be excluded from federal contracting opportunities based on their treatment of veterans they employ, according to the prospectus.
Companies included in the index from the Victory Media list must also be included in the Solactive US Large & Mid Cap Index, be listed on a U.S. stock exchange, meet size ($1 billion in market capitalization) and liquidity (three-month average daily trading volume of $25 million) and positive operating income over the prior one-year period. Components selected for the index are equally weighted. As of the start of 2018, the index included 104 securities, the document says.
The fund will donate part of its revenues via the UBS Optimus Foundation to charities focused on veterans.
Just last week, InsightShares launched the InsightShares LGBT Employment Equality ETF (PRID), which tracks an index based on criteria standardized by the Human Rights Campaign. Similarly, PRID contributes some of its revenues to LGBT-focused charities.
The funds represent a sort of two-pronged approach from an ESG perspective—not only do investors get to support companies that are helping causes that the investors believe in, but they are also generating contributions to organizations that support those causes.
Competitor In The Pipeline
Interestingly, Pacer just filed for a similar fund. The Pacer Military Times Best for Vets Equity ETF (VETS) will list on the Nasdaq and track an index derived from the Military Times Best for Vets Employers list that is published by Sightline Media Group. The list relies on surveys that cover a company’s recruitment of veterans, culture, policies and treatment of reservists, according to the prospectus.
To be included, a company must have made it onto the list for the three previous years, have a market capitalization of at least $200 million and have sufficient liquidity. The index for VETS will also weight its components equally. However, it included just 37 components during the first month of 2018.
The filing did not include an expense ratio.
Contact Heather Bell at [email protected]