Vegan-Themed Active ETF Launches

December 29, 2021

An ETF issued by a plant-based business consultant seeks to be the only pure-play ETF for plant-based companies.

The VegTech Plant-based Innovation & Climate ETF (EATV) debuted on the NYSE Arca Wednesday with an expense ratio of 0.75%.

The actively managed fund buys into companies that it deems to be innovators in plant-based food production and technology. Any company that produces equipment used in animal agriculture is screened out of the investable universe, but firms making products that contain trace amounts of animals or animal products in their end products are allowed. That information is gleaned from financial statements and reading ingredient labels.

EATV will also consider investing in “climate companies,” or firms that have demonstrated plans to reduce their greenhouse gas emissions or that sell products with smaller carbon footprints than their competition.

The fund also changed its name from its initial filing, going from using the phrase “environmental impact” to “climate” with the latest effective filing.

VegTech co-founder Elysabeth Alfano told ETF.com in an interview that the idea for the fund came after she and portfolio manager Sasha Goodman published a list of investable vegan companies in March. That list was never meant to be a working index for the fund, but it drew further attention from people looking to invest in vegan-friendly companies.

EATV is actively managed, so it can stay abreast of an ever-changing industry that faces dual pressures of feeding a growing global population and minimizing harmful environmental practices, she said.

Secular Trend

“As we look to produce more nutritious food for more people, we’re looking for a more efficient food and materials supply system,” Alfano explained. “We think that is … the tip of a secular trend.”

There’s not much of a comparison for EATV in the existing ETF marketplace. The U.S. Vegan Climate ETF (VEGN) tracks an index of large cap stocks that exclude companies deemed to be contributing to animal suffering or climate change, but that leaves nonfood-related stocks like Tesla, Nvidia, UnitedHealth Group, Visa and Mastercard as its top holdings.

A potential competitor is the Global X AgTech & Food Innovation ETF (KROP), which tracks an index of companies involved in agriculture innovation, and the VanEck Future of Food ETF (YUMY), which takes a similar theme but in an actively managed fund.

The Defiance Next Gen Food & Agriculture ETF (DIET) survived only six months before being shut down in May 2020.

EATV’s top holdings include Beyond Meat, alcohol producer MGP Ingredients, biotech company Amyris, vegan cosmetics maker ELF and sports drink maker Celsius Holdings.

 

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Contact Dan Mika at [email protected], and follow him on Twitter

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