Pax World, the Portsmouth, N.H.-based money management firm focused on so-called sustainable investing, rolled out its second ETF today, a fund focused on companies outside of North America that meet its social, environmental and governance screens.
The Pax MSCI EAFE ESG Index ETF (NYSEArca: EAPS) will be based on the MSCI EAFE ESG Index and have an expense ratio of 0.55 percent, according to the company’s website. The fund will invest 80 percent of its assets in components of or depositary receipts representing the index. The remaining 20 percent may be held in futures, options, swaps or cash.
Pax World's relationship with Esposito Securities, the Dallas-based financial services and trading firm that provided the seed money for the new fund, has featured prominently in the launch of the new fund. Esposito Securities took the unusual step of issuing its own press release that framed its relationship with Pax as more of a partnership, rather than merely a supplier of capital.
"We've been working on our relationship with Pax for the last six months, and we're going to bring out another [ETF] right after this launch," Mark Esposito, the chief executive officer of the firm that bears his name, said in a telephone interview.
The next ETF that’s still in the works, the Pax FTSE Environmental Technologies (ET50) Index ETF (NYSEArca: ETFY), is slated to launch within the next two to four weeks.
Esposito said that ETFY won't launch immediately because his firm still needs to determine how to hedge its investment in the fund.
ETFY will have an expense ratio, like EAPS, of 0.55 percent.
Pax's one existing ETF, Pax MSCI North America ESG Index ETF (NYSEArca: NASI), has gathered $2.83 million since its launch in May of last year, according to data compiled by IndexUniverse.com. NASI, which has an annual expense ratio of 0.50 percent, seeks to track the performance of the MSCI North America ESG Index.
The company said its screening philosophy provides insight into a company’s management, culture and risk profile—all of which can have an effect on share price.