Hennessy to add ESG ETF from Stance Capital

Stance will remain as a subadvisor to the $40m ETF

Hennessy Funds is preparing to add its first ETF to its line, a semitransparent ESG product whose assets it is acquiring from Stance Capital.

The acquiring firm announced the agreement in August, with plans to rename the Stance Equity ESG Large Cap Core ETF as the Hennessy Stance ESG Large Cap ETF. Hennessy filed an initial prospectus for the fund September 23 with the Securities and Exchange Commission.

The ETF, which is actively managed, does not disclose its holdings daily. Instead, like other semitransparent ETFs, it publishes a “portfolio reference basket” to help the market price of its shares near net asset value.

The fund, which is a year and a half old and currently represents $40m, invests at least 80% of its net assets in stocks of large cap companies that meet ESG criteria determined by the portfolio managers. Hennessy will be the investment manager to the ETF when the transition goes into effect. Stance Capital and Vident Investment Advisory will serve as subadvisors. Portfolio managers will be Stance’s Bill Davis and Kyle Balkissoon and Vident’s Rafael Zayas and Ryan Dofflemeyer.

The ETF will have net expenses of 85 basis points.