Honeytree Launches BEEZ Fund Amid ESG Backlash

The actively managed fund invests in 25 to 30 U.S. large-cap stocks.

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

Honeytree Investment Management launched its first ETF, an actively managed U.S. stock fund aimed at environmental, social and governance investing, as the political backlash faced by so-called ESG investing appears not to have diminished appetites for the products.  

The Honeytree U.S. Equity ETF (BEEZ) invests in 25 to 30 large-cap U.S. stocks that founders Paula Glick and Liz Simmie believe will generate “responsible growth,” according to the fund's prospectus. According to Simmie, the fund starts with the universe of U.S. stocks and narrows them down according to 25 criteria. It eliminates companies without investment-grade credit ratings, firms with market capitalization under $5 billion, weapons makers, oil and gas companies and tobacco companies, among other considerations. 

The launch comes as ESG remains popular among ETF providers despite conservative government officials across the U.S. pushing back and forcing pensions they oversee to abandon such funds. A recent survey from independent investment management firm Sage Advisory Services found that seven out of 11 exchange-traded fund providers said that ESG was still a first or second priority growth category for them. 

Simmie said in an interview that the fund’s active management allows she and Glick to consider qualitative factors to better focus on companies that will deliver growth while considering the interests of stakeholders, including employees and customers. She also said that the fund is for “high-conviction” ESG investors and so she isn’t worried about the difficulties some major ESG funds have had this year.  

“Our firm was built for that specific cohort of ESG-focused investors who are looking to align their whole portfolio under that umbrella,” Simmie said. “We didn’t build our product for the broad population, whose views on [diversity, equity and inclusion] turned because some influencer said it was stupid.” 

BEEZ ETF Launched Amid ESG Backlash

Glick and Simmie, who co-founded Toronto-based Honeytree in 2018, aren't shy about their ESG beliefs: "We are proud to live, work, and play on the traditional territory of the Mississaugas of the Credit First Nation, and the ancestral lands of the Haudenosaunee and the Huron-Wendat," their website reads. 

Simmie followed in the footsteps of her father, Peter Simmie, who co-founded Canadian asset manager Bristol Gate Capital Partners, a firm that manages over $2 billion in assets.

Honeytree also applies what Simmie calls a “Chick-fil-A Screen,” which eliminates companies whose senior management actively speaks out against LGBT rights or funds groups that do.  

Those criteria narrow the fund's possible picks to a list of 50 companies. From there, Simmie and Glick use a series of 45 fundamental financial and ESG factors to narrow their list down to the 25 stocks the fund holds. 

Simmie said BEEZ is the first of a series of actively managed, ESG-focused ETFs the firm plans to issue. 
 
Contact Gabe Alpert at [email protected]

Gabe Alpert is a former data reporter at etf.com with over seven years’ experience in financial journalism. He also previously contributed reporting and analysis to Barron’s Magazine, Investopedia and other publications.