Sage, Inspire Launch ETFs

Two firms roll out values-based funds.

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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

Sage Advisory today has rolled out a bond fund that targets the intermediate-term credit bond space from an environmental, socially responsible and governance (ESG) perspective, while Inspire Investing has added a fourth fund to its lineup of “biblically responsible” ETFs.

Sage Launches ESG Bond Fund

The Sage ESG Intermediate Credit ETF (GUDB) tracks an index derived from the Barclays Capital U.S. Intermediate Credit Bond Index.

GUDB comes with an expense ratio of 0.35% and will list on Cboe Global Markets.

The methodology developed by Sage and London-based ESG ratings firm Sustainalytics prioritizes positive exposure to ESG characteristics and maintaining liquidity, the press release notes.

The issuers in the index are rated based on ESG criteria and assigned a score between 1 and 100. Issuers are also assigned a “controversy score” between 1 and 5 that is based on news, incidents of misconduct, controversies and events that are associated with ESG risks.

To be eligible for inclusion, an issuer must have an ESG score of at least 50, and a controversy score of 3 or less, according to the prospectus.

The underlying index aims to maintain the sector exposure, duration, maturity and yield curve positioning of its parent index, which covers investment-grade credit bonds denominated in U.S. dollars. The resulting benchmark will typically include roughly 120 components.

“Investors are realizing that ESG strategies do not require a sacrifice in returns. Combining this mindset with the rapidly growing popularity of ETFs makes the timing perfect,” said Sage President and CIO Robert Smith.

Currently, the largest available ESG bond ETF is the NuShares ESG U.S. Aggregate Bond ETF (NUBD), which launched earlier this year, and comes with an expense ratio of 0.20%. It has roughly $40 million in assets under management.

 

Inspire Debuts US Large-Cap ETF

Inspire Investing has launched a biblically responsible ETF that covers the large-cap U.S. space. The Inspire 100 ETF (BIBL) joins three other Inspire funds falling within the same theme that focus on other asset classes and have $104 million in combined assets under management.

“All of our funds are built using our Inspire Impact score methodology, which identifies the most inspiring biblically aligned companies in the world,” said Inspire CEO Robert Netzly.

The new fund comes with an expense ratio of 0.35% and lists on the NYSE Arca exchange.

BIBL’s index selects its components from the combined universe of the S&P 500 and the Russell 1000. It first screens the universe to exclude companies that participate in activities that are not acceptable under the values laid out in the Bible, including abortion, gambling, alcohol, tobacco, pornography, LGBT lifestyle and human rights violations.

From there, the methodology scores the remaining companies based on their positive attributes based on the products and services they provide, the workplace environment they provide, community activities and efforts in support of the environment, the prospectus says.

'Bare-Knuckle Brawl'

“It’s really designed to be a bare-knuckle brawl against the S&P 500. The only difference is this is biblically responsible and they’re not,” Netzly said.

He notes that the firm has seen a lot of interest from institutions, including Christian foundations, and says there has been a lot of feedback from investors that there was nothing available in the biblically responsible space that they could switch their assets into from secular funds without significantly impacting their portfolio metrics.

“We really wanted to give people an easy straight-across comparison—market-cap-weighted, rebalanced annually, tax efficient, low-cost as possible—but make it biblically responsible,” Netzly added.

As such, the methodology selects the 100 highest-scoring companies, and weights them based on market capitalization. The other Inspire products are equal-weighted, but Netzly says the firm used cap weighting for BIBL in order to appeal to investors looking for an S&P 500 replacement.

Contact Heather Bell at [email protected]

 

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