Daily ETF Watch: Climate Leader Fund Debuts
New Etho fund targets companies with smaller carbon footprints.
Today saw the launch of another fund targeting climate change. The Etho Climate Leadership U.S. ETF (ETHO) selects its companies based on their carbon impact, which is based on each firm’s total greenhouse gas emissions from all of its operations. However, ETHO also has an added environment, social and government issues element.
Eligible companies must have at least $100 million in market capitalization and cannot be classified as an energy sector company, according to the prospectus. Potential components also cannot be involved in the aerospace, tobacco, defense, gambling, gold or silver industries or subindustries.
General sustainability issues can also affect a company’s inclusion. Companies targeted by nongovernmental organizations for poor sustainability practices can be excluded from the index, while those whose products contribute to strong sustainability practices that counterbalance other negative criteria can be included.
The prospectus notes that the index has no set component count and includes all U.S. companies meeting the index criteria. Typically, it will have between 400 and 430 components from the small-, mid- and large-cap segments.
The fund listed on the NYSE Arca and comes with an expense ratio of 0.75%.
WisdomTree Launches
WisdomTree added another fund to its lineup of currency-hedged ETFs. The WisdomTree Global Hedged SmallCap Dividend Fund (HGSD) is the currency-hedged version of the WisdomTree Global SmallCap Dividend Fund (GSD), which rolled out earlier this month.
The index for both funds includes companies drawn from the bottom 5% of WisdomTree’s investment universe, as defined by the WisdomTree Global Dividend Index. The components must have at least $200 million in market capitalization in addition to meeting liquidity requirements. The index selects the largest 1,000 companies after the screens have been applied to the selection pool and weights them by dividends paid.
HGSD, like GSD, comes with an expense ratio of 0.43%.
Schwab Lowers Fund Fees
Charles Schwab has shaved a basis point off of each of the expense ratios for three of its largest funds. The ETFs in question all launched in 2009 and have consistently been the cheapest in their respective asset classes since their debuts.
The Schwab U.S. Broad Market ETF (SCHB | A-100) has $5.3 billion in assets under management, and its expense ratio has been cut from 0.04% to 0.03%. The fund was already the cheapest in its asset class, but at 3 basis points, it can’t get much cheaper. As far as competing funds, the $57 billion Vanguard Total Stock Market (VTI | A-100) comes the closest to matching the Schwab fund’s costs, at 5 basis points.
Meanwhile, both the $1.6 billion Schwab U.S. Large-Cap Value ETF (SCHV | A-96) and the $2.6 billion Schwab U.S. Large-Cap Growth ETF (SCHG | A-92) saw their respective expense ratios cut to 0.06% from 0.07%. Again, the Vanguard funds come the closest in terms of price. The Vanguard Value ETF (VTV | A-100) and the Vanguard Growth ETF (VUG | A-92) both charge 9 basis points.
Contact Heather Bell at [email protected].
