Emerge ETFs: Combining Female-Led Management & ESG

[This ETF Industry Perspective is sponsored by Emerge Capital Management in partnership with Cboe Global Markets.]

Exchange-traded funds (ETFs) have grown in popularity across the United States and Canada, providing access to an ever-growing array of innovative investment opportunities. And yet, despite multiple product launches each year, two key themes are still overlooked: sustainable investing and the rise of female portfolio managers.

Numbers Don’t Lie

Female fund managers continue to prove their success, and yet as of the end of 2021, only 11.8% of portfolio managers at a global level, only 11.8% of portfolio managers were female, according to Citywire’s Alpha Female Report. 

The numbers aren’t much better for environmental, social and governance (ESG) ETFs. At the end of 2020, there were only 328 ESG ETFs found on the United States and Canadian stock exchanges, out of almost 4,000 ETFs listed across both countries.

Emerge Capital Management is working hard to change that. And with more and more millennials looking to invest, their efforts couldn’t come at a better time. Millennials pushed the growth of sustainable strategies, with $51.1 billion invested in these stocks between 2010 and 2020, according to Morningstar. Now, everyone wants in.

A Female Focus on Sustainable Investing

In September 2022, Emerge launched five new ETFs, all with a focus on sustainability. Furthermore, each of the ETFs are run by high-performing female portfolio managers. Together, these latest additions to the Emerge product shelf mark a huge step toward a future of more equality-focused management strategies.

The new ETFs, which launched on Cboe and are now available for trading, are as follows:

• Emerge EMPWR Sustainable Dividend Equity ETF under the ticker EMCA. It aims to provide long-term total returns and current income by investing in dividend U.S. equity securities, focusing on ESG criteria.
• Emerge EMPWR Sustainable Select Growth Equity ETF under the ticker EMGC. It aims to provide long-term growth by investing in U.S. equity securities, focusing on ESG criteria.
• Emerge EMPWR Sustainable Global Core Equity ETF under the ticker EMZA. It aims to provide long-term growth by investing in global equities and focusing on ESG criteria.
• Emerge EMPWR Sustainable Emerging Markets Equity ETF under the ticker EMCH. It aims to provide long-term growth by investing in emerging market equities and focusing on ESG criteria.
• Emerge EMPWR Unified Sustainable Equity ETF under the ticker EMPW. It aims to provide long-term growth by investing in global equities and focusing on ESG criteria.

ETFs based on the same strategies were also launched simultaneously on the NEO Exchange (a Cboe Global Markets Company), in Canada.

Moving Forward, Despite the Pushback

These new Emerge ETFs come at a time when ESG ETFs are under threat. The U.S. Department of Labor released a regulation proposal in October 2020 intended to eliminate ESG ETFs from retirement pension funds. If approved, it would be a significant loss for such products.

However, the proposed regulation is unlikely to receive approval. ESG ETFs are a future opportunity that provide far too much growth to be missed. And with oil and gas stocks becoming less and less likely to provide long-term growth, these funds will be necessary now, and in the future.

Emerge is providing investors with two benefits through their most recent product launch. First, it offers an opportunity for long-term growth via ESG funds. Second, it offers access to highly talented portfolio managers who have been overlooked simply because they’re female.

And when it comes to your financial goals, cash is king .. .or, perhaps we should say, “cash is queen.