Daily ETF Watch: Global Impact Fund Debuts

April 22, 2016

Today iShares added to its lineup of socially responsible ETFs with the launch of the iShares Sustainable MSCI Global Impact ETF (MPCT) on the Nasdaq stock exchange. The fund tracks an index derived from its MSCI ACWI benchmark that targets companies focused on global problems that fall under the United Nations sustainable development goals.

MPCT comes with an expense ratio of 0.49%.

Its underlying benchmark, the MSCI ACWI Sustainable Impact Index, screens the MSCI ACWI components to identify the companies that derive at least 50% of their sales from products or services that address particular global challenges while complying with basic environmental, social and governance guidelines, the prospectus said.

Among the global problems that fall within the scope of the UN’s goals are “nutritious food, treatment of major diseases, sanitary products, education, affordable housing, energy efficiency, green building, sustainable water, and pollution prevention,” the prospectus said.

The fund includes stocks of all sizes, with strong concentrations in the consumer staples, health care and industrials sectors. Twenty-two countries from the emerging and developed-market categories, including the U.S., are represented in the index.

Second Drone Fund Coming

ETF Series Solutions is hoping to take on the PureFunds Drone Economy Strategy ETF (IFLY) with a drone ETF of its own.

The Drone ETF, detailed in a regulatory filing, will track an index comprising global developed-market equities focused on products or services related to unmanned aerial vehicles.

The strategy may include small-, mid- and large-capitalization companies, according to the prospectus, and tap into various industries including aerospace, defense, automotive, communication, electronics, machinery, semiconductor and information technology.

The fund’s methodology will screen companies for “investability,” and liquidity thresholds. It will also require a minimum market capitalization of $250 million, according to the prospectus. In all, the portfolio should have 40-50 holdings at any given time.

As niche-y as the Drone ETF is, when launched, it would be second of its kind to hit the ETF market. PureFunds’ IFLY, launched this past March, taps into the same theme, but offers slightly different exposure.

IFLY can reach a broader segment of stocks, including emerging market equities. Its underlying benchmark also includes global companies that are not only involved in the development and manufacture of drone technology, but those that use drone technology. The methodology classifies the former group as “Drone Economy Suppliers” and the latter as “Drone Economy Drivers.”

IFLY, which came to market on March 9, has $2.6 million in assets and carries an 0.75% expense ratio. The prospectus for the Drone ETF did not specify fees and ticker, but noted it will launch on the Bats Exchange, which owns ETF.com.

Contact Heather Bell at [email protected] and Cinthia Murphy at [email protected].

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