Latest Launches

Global X files for carbon credit futures ETF

The product would be one of several in a growing field

Global X is coming to the market with a carbon credit futures ETF, adding to roughly half a dozen US products in that category.

The Mirae company filed a prospectus December 28 2022 for the Global X Carbon Credits Strategy ETF, which would track the ICE Global Carbon Futures Index.

The ETF would invest at least 80% of its net assets, along with borrowings, in long positions of securities in the index or ones that are similar to those in the index, according to the prospectus. The index includes carbon credit futures within cap and trade systems, such as those in the UK and California.

Currently there are at least six US-domiciled ETFs that invest in the carbon credits market, according to data from ETF.com.

Portfolio managers on the forthcoming Global X ETF are Nam To, Wayne Xie, Kimberly Chan, Vanessa Yang and Sandy Lu. Fee information was not included in the prospectus filed with the Securities and Exchange Commission.

DWS readies ‘climate action’ ETF

The product would be the 14th Xtrackers ETF with an ESG theme

DWS is preparing an Xtrackers ETF that would invest in companies seen as leaders in addressing climate change in their businesses.

Late last week the company filed a prospectus for the Xtrackers MSCI USA Climate Action Equity ETF, which would focus on large- and mid-cap companies. The index targets 50% coverage of companies from each sector in MSCI’s USA Index. It currently includes 313 securities, according to the filing with the Securities and Exchange Commission.

The prospectus filed December 29 2022 would be effective as of March 15. The forthcoming fund would be Xtrackers’ 14th ESG-themed ETF.

Portfolio managers are DBX Advisors vice presidents Bryan Richards, Patrick Dwyer, Shlomo Bassous and Ashif Shaikh. The prospectus did not yet include fee information.

TrueMark adds ETF for renewable energy

The fund is subadvised by Eagle Global Advisors

Asset manager TrueMark Investments recently added an ETF focused on renewable energy.

The TrueShares Eagle Global Renewable Energy Income ETF launched Dec. 8. The actively managed fund seeks to invest in stocks of companies involved in renewable energy, including solar, wind, biofuels, hydropower, nuclear or geothermal power, according to the prospectus.

The subadvisor, Eagle Global Advisors, uses “a fundamentally-driven investment process which includes the analysis of global macro-economic and geo-political factors, fundamental company analysis, internal valuation methods and the projected rate of return from the investment given its expected level of risk.”

The ETF, which trades on the New York Stock Exchange, has net fees of 75 basis points.

Portfolio managers are Eagle Global Advisors’ Michael Cerasoli, Alex Meier and Steven Russo.

The recently passed Inflation Reduction Act, which includes billions of dollars for clean energy investments, bodes well for the ETF, Cerasoli said in an announcement for its launch.

“Above and beyond the environmental characteristics, the next generation of renewable infrastructure companies are laying the groundwork necessary to restructure power grids and commercialize the utility of solar, wind, hydro and biomass alternatives that have more runway and tailwinds than ever before,” he said.

GMO preps resource transition fund

The fund would invest in companies involved in natural resources other than fossil fuels

Grantham, Mayo, Van Otterloo (GMO) is preparing to add a fund to its lineup that anticipates more demand for clean energy.

The firm filed an initial prospectus for its GMO Resource Transition Fund in late November with the Securities and Exchange Commission. The fund, like other GMO strategies, is not labeled specifically as an ESG product but does allow ESG considerations at the management team’s discretion.

“Given global population growth, the industrialization of emerging countries and the clean energy transition, GMO believes that global demand for many natural resources will increase and, given the finite supply of natural resources, that prices of these natural resources will increase over a long time period,” the prospectus notes.

The “resource transition sector” in which the fund plans to invest includes businesses involved in natural resources other than fossil fuels. That includes mining, metals, energy technology, forest products, building materials, water and other areas, according to the company’s filing.

The forthcoming fund has net fees ranging from 86 basis points to 105 bps, depending on share class.

Portfolio managers are Lucas White and Thomas Hancock from GMO’s focused equity team.

Currently, the firm has one US mutual fund that seeks to invest specifically with climate change in mind – the GMO Climate Change Fund – which launched in 2017 and has just under $1bn in net assets.

GMO became a member of the Net Zero Asset Managers initiative more than a year ago and recently made its initial target disclosure.

The firm’s cofounder Jeremy Grantham has been vocal on environmental issues and in 1997 with his wife, Hannelore, started the Grantham Foundation for the Protection of the Environment.

Earlier this year, the company hired a new head of ESG and sustainability, Deborah Ng, who is tasked with accelerating the Boston-based firm’s initiatives in those areas.

Global X preps covered call ESG ETF

There is a lack of ESG funds on the market designed to address volatility through a buy-write strategy

Mirae Asset’s Global X is preparing two covered-call ESG ETFs, recent regulatory filings show.

Late last month, the firm filed initial prospectuses for the Global X Nasdaq 100 ESG Covered Call and S&P 500 ESG Covered Call ETFs, both of which could potentially commence trading as soon as mid-February.

Those product developments add to the 100 ETFs the firm currently offers. But they are significant in that they are ESG versions of two of Global X’s biggest funds.

Further, there appear to be few, if any, ESG-themed covered-call open-end mutual funds or ETFs on the market. The covered-call strategy, also known as buy-write, is designed to dampen downside risk for fund investors, which is a selling point in volatile markets, though it also limits upside potential.

Global X’s Nasdaq 100 Covered Call ETF is its largest, at nearly $6.6bn in assets, while the S&P 500 Covered Call ETF is its fifth biggest, at about $2.1bn. Among all covered-call ETFs on the market, Global X’s Nasdaq 100 Covered Call ETF is the biggest, according to data from ETF.com. And over the past 30 days, both of those existing Global X funds were the market leaders in net flows, according to the site.

The forthcoming ESG version of the Nasdaq 100 ETF would invest at least 80% of its net assets in the Nasdaq 100 ESG BuyWrite Index. The ESG version of the S&P 500 ETF would follow the Cboe S&P 500 ESG BuyWrite Index.

Neither ETF had fees listed in the early prospectuses filed with the Securities and Exchange Commission. The portfolio managers for both ETFs would be Nam To, Wayne Xie, Kimberly Chan, Vanessa Yang and Sandy Lu, each of whom is a member of the portfolio management team of the Global X’s similarly named non-ESG covered-call ETFs.

Brown Advisory preps ‘value’ ESG fund

The mutual fund would be the firm's seventh in its line of sustainable products

Brown Advisory is adding a mutual fund focused on value to its line of sustainable products.

The company filed a prospectus November 17 for the Brown Advisory Sustainable Value Fund, which would be the seventh in its line of sustainability-focused mutual funds.

The forthcoming fund, which could launch next year, would focus on stocks of companies valued at $3bn or more that satisfy ESG criteria.

Most of the portfolio companies will meet certain standards for diversity, equity and inclusion, as well as greenhouse gas emissions reduction or are associated with products and services tied to sustainability or social benefits, according to the prospectus.

The fund will be available in institutional, investor and adviser share classes, with net fees ranging from 71 basis points to 111 bps.

Brown’s Michael Poggi is listed as the portfolio manager.

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