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SerenityShares Investments, a Washington-based investmenmt advisor, has launched the SerenityShares IMPACT ETF (NYSE: ICAN), providing access to US-listed equities whose business models seek to improve environmental and societal concerns.
While traditional ESG-themed ETFs focus on screening out firms operating in controversial industries (such as tobacco, weapons, and fossil fuels), ICAN represents the next generation of funds which aim to positively screen for and increase exposure to companies whose activities actively benefit society and the planet.
“SerenityShares was launched because we believe that the next evolution of ETF products will provide solutions,” said Scott Sacknoff, chief investment officer, SerenityShares. “Our ticker ‘ICAN’ symbolizes the belief that when it comes to investing, we can do more than just invest—our investments can make an impact.”
“The underlying philosophy of SerenityShares is to develop products that provide investors with a simple solution that meets their core investment needs,” added Kathleen Neumann, president of SerenityShares. “A growing class of investors wants to have an impact fund among their suite of investment options. With the launch of our Impact ETF, a single fund can enable institutions and retail clients the ability to not only invest, but invest with a purpose in a diversified basket of US-listed companies.”
The fund tracks the SPADE IMPACT Index, whose methodology focuses on 20 core impact themes identified and defined by SerenityShares, including environmental stewardship, access to local healthcare, renewable energy, clean water, eldercare, education, community building, and access to libraries of information. Eligible firms must be listed on either NYSE or Nasdaq and have a market capitalization of at least $1.5 billion.
Constituents are weighted by market capitalization with minimum (0.5%) and maximum (3.5%) weighting thresholds utilized. There are currently 115 stocks in the index and the largest sector exposures are to industrials, technology, healthcare and consumer non-cyclicals, with each representing approximately 15-20% of the total index value.
By choosing to package the strategy in an ETF wrapper, investors may also enjoy enhanced liquidity, transparency, tax efficiency and convenience.
ICAN has a total expense ratio of 0.50%.
Demand for ICAN is expected to be driven by a growing awareness that incorporating ESG-screens into the investment process can positively affect an investor’s bottom line. In their 2016 survey, the Global Impact Investing Network reported 158 organizations raised $77bn for impact investments, compared to $10.3bn in 2013.
Additionally, research suggests younger-generation investors (who are increasingly representing a larger proportion of total investable wealth) are more likely to adopt socially responsible investments. According to UBS, “the rising influence of the millennial generation – those born between the early 1980s and early 2000s – and their sustainability and impact-motivated beliefs are helping to drive a shift in societal expectations, and in the way capital is directed.”