Daily ETF Watch: More Socially Responsible Funds

December 28, 2015

Goldman Sachs is jumping into the growing trend of socially responsible investing by putting into registration an ETF that would invest only in environmentally and socially aware names. Meanwhile, the No. 3 ETF provider, State Street Global Advisors, is turning its focus to gender diversity.

Here’s the latest in filings:

The Goldman Sachs S&P 500 Environmental & Socially Responsible ETF will track an index that selects securities from the S&P 500, but excludes fossil-fuel-heavy industries, as well as companies that produce and sell tobacco and military armaments in excess of certain thresholds, according to the prospectus.

These securities are then scored by “environmental and social factors” to determine the companies’ ability to “adapt to trends such as resource scarcity, climate change or an aging population.” Only the highest-scoring names in each sector are included in the index.

ETF investors today have a number of funds to choose from that focus on so-called environment, social and governance mandates from providers such as iShares, AdvisorShares and Vident. Goldman Sachs’ ETF would join the firm’s growing roster of smart-beta funds, and is expected to be listed on the NYSE Arca. Ticker and fees were not disclosed.

The fund will track an index comprising companies that do a great job at advancing women through gender diversity on their boards of directors and in management in general.

There’s extensive research that shows that companies with gender-diverse leadership tend to outperform long-term companies that don’t.

The U.S. large-cap portfolio will pick securities from the largest 1,000 U.S. stocks, based on market capitalization, and invest in those that meet ratio-based criteria.

The ETF will come with a management fee of 0.20%, according to the prospectus. No ticker was disclosed.

Contact Cinthia Murphy at [email protected].

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