Today, State Street Global Advisors launched an ESG version of its SPDR S&P 500 ETF Trust (SPY), the largest ETF in the world. The SPDR S&P 500 ESG ETF (EFIV) includes the companies of the S&P 500 Index, but screens out those that violate basic ESG requirements.
EFIV comes with an expense ratio of 0.10%, just one basis point more than SPY. It lists on the NYSE Arca.
The fund methodology eliminates companies with significant involvement in the tobacco and “controversial” military weapons industries as well as those that score poorly in certain ESG evaluation frameworks. That means companies scoring in the bottom 5% for the United Nations Global Compact or rank in the bottom 25% among their industry peers in terms of S&P DJI ESG Score are excluded from the index, the prospectus says.
“EFIV meets growing demand for cost effective solutions that help put ESG investing into action by offering investors an ETF that seeks to track a more sustainable version of one of the most renowned benchmarks in the world,” said Sue Thompson, State Street’s head of SPDR Americas distribution.
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