iShares Unveils Food Innovation ETF
The new fund represents one of BlackRock’s identified megatrends.
BlackRock is having a busy day on Wednesday. Not only did it host a press roundtable before the release of its megatrends report, its iShares arm rolled out a new cryptocurrency equity ETF on the NYSE Arca, and it launched the iShares Emergent Food and AgTech Multisector ETF (IVEG) on the Nasdaq exchange. IVEG comes with an expense ratio of 0.47%.
“I'd highlight food demand is projected to increase by 56% from 2010 to 2050. That's creating a real strain on global food production,” said Rachel Aguirre, head of U.S. iShares product, on the megatrends press call.
“At the same time, 34% of global emissions is attributed to global food production. If we're going to limit the impact of climate change and address it, we really are going to need to find innovations and solutions in this space,” she added, pointing out that more than half of shoppers consider sustainability when buying groceries.
Methodology
IVEG targets food- and agriculture-related technology and innovation via the Morningstar Global Food Innovation Index. The index has four themes it focuses on: agriculture technology; alternative proteins; nutritional innovation and safety; and sustainable food production and packaging, the prospectus notes.
In addition to meeting minimum size and liquidity requirements, Morningstar must classify a company as a producer of goods or services related to one of the themes or as a company that supplies the producers.
It must also derive revenues from one of the themes and expect to see profits from one of the themes increase by at least 5% over the following five-year period, the fund document says.
Companies in the investable universe are scored and ranked by their exposure to the index’s four themes, with index members selected from the top rankings. Index membership is capped at 50 constituents.
“This shift is underway; it’s happening. And IVEG provides investors access to companies that are involved in these innovative areas,” Aguirre noted. “It’s the entire value chain that we are putting within this thematic ETF.”
Contact Heather Bell at [email protected]
