American Century’s Avantis adds ESG ETFs

Three new ETFs use ratings from MSCI and Sustainalytics

Avantis Investors recently launched three ESG ETFs, the first such options from the American Century-owned firm.

Those products include the Avantis Responsible U.S. Equity, International Equity and Emerging Markets ETFs, the company noted in an announcement March 30. Those ETFs, which are listed on NYSE Arca, add to Avantis’s current line of 11 ETFs.

The new ETFs use ESG ratings from Sustainalytics and MSCI and screen out securities in numerous categories, according to the products’ prospectuses. Exclusions apply to companies with more than 5% of revenues coming from oil and gas, weapons, factory farming, palm oil, tobacco, cannabis, gambling and adult entertainment. That also applies to companies with high carbon emissions intensity or de minimis revenue from thermal coal, as well as those without women on their boards, with low corporate governance scores or with ESG controversies.

Net fees for the new ETFs range from 15 basis points to 33 bps.

“We have priced these strategies in line with our conventional equity ETFs because investors hoping to incorporate their ESG considerations into their investment portfolios should not have to endure higher fees,” Avantis chief investment officer Eduardo Repetto said in the announcement.

The co-managers of the new ETFs are Repetto, senior portfolio managers Mitchell Firestein, Daniel Ong, Ted Randall and associate portfolio manager Matthew Dubin.