Impact Shares has launched the Impact Shares Affordable Housing MBS ETF (NYSE: OWNS), an ETF that invests in agency mortgage-backed securities (MBS) backed by pools of mortgage loans made to minority families, low- and moderate-income (LMI) families, and/or families that live in persistent poverty areas.
OWNS seeks to invest in the dignity of homeownership for these traditionally underserved communities. Sub-advised by Community Capital Management (CCM), a pioneer in fixed income impact investing, OWNS is designed to support the preservation and growth of affordable homeownership by creating financing for LMI borrowers.
OWNS offers investors a capital markets solution for bridging the racial wealth gap to help address the affordable housing crisis in the U.S. and looks to make a positive impact on the well-being of individuals, families, and communities. Seed investors in the Fund include Allianz Life Insurance Company of North America, BancorpSouth, Woodforest National Bank, and the California Community Foundation, among other banks, insurers, and foundations. Jane Street Capital will serve as Lead Market Maker to support the launch and ongoing trading of OWNS.
“Homeownership is one of the primary tools for building wealth and its benefits are far-reaching, from enhancing childhood development and school performance to increasing spending and employment in local communities to mental and physical well-being,” says David Sand, chief impact strategist at CCM. “Affordable housing for LMI, minority, and Black borrowers has been a primary focus for CCM for over two decades. We’re excited to partner with Impact Shares to offer a unique investment opportunity using the flexible, transparent ETF wrapper.”
The launch of OWNS coincides with the three-year anniversary of the Impact Shares NAACP Minority Empowerment ETF (NACP). Launched in July 2018 in partnership with the National Association for the Advancement of Colored People (NAACP) as Impact Shares’ flagship product, NACP remains the only racial equity product on the market allowing investors to allocate capital to U.S. companies with strong racial and ethnic diversity policies in place. The missions of both funds are closely aligned as Black Americans and other minority groups are disproportionately impacted by the lack of affordable housing.
“Decades of economic inequality and discriminatory homeownership policies have created a prominent racial wealth gap,” says Marvin Owens, chief engagement officer at Impact Shares. “The black homeownership rate is approximately 45 per cent, the lowest of all ethnic and racial groups in the nation. Providing affordable housing to minority Americans is a crucial step in helping to address the widening racial wealth gap and catalyzing economic growth in LMI communities.”
OWNS will invest in MBS issued by Fannie Mae, Freddie Mac, and Ginnie Mae. Over half of the loans in OWNS will be made to LMI borrowers. These include home loans in census tracts where more than 50 per cent of the population is non-white and at least 40 per cent of the population is living at or below the poverty line. One of the largest barriers to wealth creation for minorities and Black Americans is the lack of inherited wealth. Homeownership is critical is this regard. It is also in the nation’s best interest – it can bring stability to families, revitalize distressed communities, and have a positive impact to economic growth.