ETF Watch: Oppenheimer Launches Socially Responsible Funds

October 31, 2016

Today Oppenheimer rolled out two revenue-weighted funds targeting environmental, social and governance criteria in its selection approach. The Oppenheimer ESG Revenue ETF (ESGL) and Oppenheimer Global ESG Revenue ETF (ESGF) trade on the NYSE Arca and come with expense ratios of 0.40% and 0.45%, respectively.

ESGL, the U.S. ETF, tracks an index derived from the S&P 500. Its methodology scores potential components on ESG factors relative to their industry peers; companies scoring in the top 50% compared with rest of their selection universe, and that pass a “controversy category screen” are included in the index and weighted according to their respective revenue earned, the prospectus said.

ESGF’s index is derived from the MSCI All Country World Index using an ESG scoring system developed by MSCI ESG Research. Similar to ESGL’s index, the companies that rank in the top 50% are selected for the index, but are then also ranked according to their Sharpe ratio, with only the top 50% actually being included in the index. Like ESGL, ESGF’s index weights its components based on revenue earned. 

First Trust Plans Risk Management Funds

First Trust has filed for a pair of actively managed funds that will be subadvised by Choice Financial Partners under the business name EquityCompass Strategies. The EquityCompass Equity Risk Manager ETF and the EquityCompass Tactical Equity Risk Manager ETF both invest in large-cap U.S. equities and have the ability to move all their assets into cash, cash equivalents and short-term fixed-income instruments when market conditions are deemed unfavorable.

Both funds use technical analysis and fundamental market indicators to determine its portfolio holdings and allocations, according to the prospectus. Among the funds’ goals are limiting volatility and avoiding exposure to prolonged market downturns. However, the tactical fund can also take short positions in the U.S. market via exchange-traded futures, options and swaps during unfavorable periods in the market.

Contact Heather Bell at [email protected].

 

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