Impact Shares launched the actively managed Impact Shares Affordable Housing MBS ETF (OWNS) Tuesday, introducing a fixed income option in its lineup of funds aiming to provide a social good.
The fund trades on the NYSE Arca and has an expense ratio of 0.30%.
OWNS primarily invests in mortgage-backed securities from federally backed housing loan originators, along with similar securities issued by minority-owned banks and institutions that are designated issuers to low-income communities.
Those securities are screened to make sure that at least 51% of the underlying loans are issued to areas that are majority-populated by people of color or where a significant portion of the population lives below the poverty line.
ImpactShares CEO Ethan Powell told ETF.com that creating the fund will allow institutions to move those loans off their books, thus freeing up more capacity to originate new mortgage issuances to homebuyers.
“The theory of change is that by increasing capital flow to these specific loans, you are creating additional capacity within these affordable lending programs,” he said.
Impact Shares Chief Engagement Officer Marvin Owens said home ownership has been the traditional way of building long-term wealth in the U.S., but African Americans haven’t had nearly the access to that as white Americans do. The Black homeownership rate in the U.S. has ranged from 42% to 49% since the St. Louis Federal Reserve began tracking the statistic in 1994, while white homeownership has ranged from 70% to 76%.