Sage, Inspire Launch ETFs

October 31, 2017

Sage Advisory today has rolled out a bond fund that targets the intermediate-term credit bond space from an environmental, socially responsible and governance (ESG) perspective, while Inspire Investing has added a fourth fund to its lineup of “biblically responsible” ETFs.

Sage Launches ESG Bond Fund

The Sage ESG Intermediate Credit ETF (GUDB) tracks an index derived from the Barclays Capital U.S. Intermediate Credit Bond Index.

GUDB comes with an expense ratio of 0.35% and will list on Cboe Global Markets.

The methodology developed by Sage and London-based ESG ratings firm Sustainalytics prioritizes positive exposure to ESG characteristics and maintaining liquidity, the press release notes.

The issuers in the index are rated based on ESG criteria and assigned a score between 1 and 100. Issuers are also assigned a “controversy score” between 1 and 5 that is based on news, incidents of misconduct, controversies and events that are associated with ESG risks.

To be eligible for inclusion, an issuer must have an ESG score of at least 50, and a controversy score of 3 or less, according to the prospectus.

The underlying index aims to maintain the sector exposure, duration, maturity and yield curve positioning of its parent index, which covers investment-grade credit bonds denominated in U.S. dollars. The resulting benchmark will typically include roughly 120 components.

“Investors are realizing that ESG strategies do not require a sacrifice in returns. Combining this mindset with the rapidly growing popularity of ETFs makes the timing perfect,” said Sage President and CIO Robert Smith.

Currently, the largest available ESG bond ETF is the NuShares ESG U.S. Aggregate Bond ETF (NUBD), which launched earlier this year, and comes with an expense ratio of 0.20%. It has roughly $40 million in assets under management.

 

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