Evolve Funds Group (Evolve) has launched what is says are the world’s first ETFs to bring carbon neutrality to traditional indices through the newly formed Evolve CleanBeta series.
The Evolve S&P/TSX 60 CleanBeta Fund (SIXT) and the Evolve S&P 500 CleanBeta Fund (FIVE) have closed their initial offering of units and will begin trading on the Toronto Stock Exchange (TSX) under the ticker symbols: SIXT (CAD Unhedged ETF Units), FIVE (CAD Hedged ETF Units), FIVE.B (CAD Unhedged ETF Units), and FIVE.U (USD Unhedged ETF Units)
SIXT and FIVE seek to provide long-term capital growth by replicating, net of fees and expenses, the performance of the S&P/TSX 60 Index and S&P 500 Index, respectively, while striving to offset the carbon footprint of the constituent securities in the portfolio.
“While institutional investors have been adopting ESG strategies in their portfolios for many years, other investors have remained skeptical about the screening methodologies that are being applied,” says Raj Lala, President and CEO at Evolve. “As we begin the greatest wealth transfer in history, advisors recognise that ESG investing is essential, since climate change is being viewed as one of the most important elements of the investment decision making process with clients’ children and grandchildren. CleanBeta takes a unique approach by decarbonising the core of investor portfolios.”
In order to offset the carbon in these portfolios, Evolve will rely on a carbon footprint calculation provided by S&P Dow Jones Indices utilizing Trucost. Trucost is a division of S&P Global. The data and analysis provided by Trucost will determine the carbon exposure of the companies in the indices. SIXT and FIVE will employ a variety of strategies, including purchasing and retiring carbon credits, as a means to neutralise the full carbon footprints.
“On behalf of Toronto Stock Exchange, I’d like to congratulate Evolve ETFs on bringing this innovative product to market which, as Evolve states, will strive to offset the carbon footprint of the constituent securities in the portfolio,” says Loui Anastasopoulos, President, Capital Formation and Enterprise Marketing Officer at TMX Group. “We are committed to supporting the ongoing evolution of socially responsible and sustainable investing across our markets, including capital raising as well as products and services that facilitate ESG investing.”
The S&P/TSX 60 Index is a portfolio index of the large-cap market segment of the Canadian equity market. The S&P/TSX 60 Index is provided by S&P Dow Jones Indices LLC and is a market capitalisation-weighted index of securities of its Constituent Issuers. The Index is comprised of 60 of the largest (by market capitalisation) and most liquid constituents of the S&P/TSX Composite Index and is generally rebalanced quarterly.
The S&P 500 is widely regarded as the best single gauge of large-cap US equities. The S&P 500 is provided by S&P Dow Jones Indices LLC and is a market capitalisation-weighted index of securities of its Constituent Issuers. The S&P 500 includes 500 leading companies in leading industries of the US economy. The S&P 500 is also the US component of the S&P Global 1200.