Latest Launches

Stewart Investors readies first US retail fund

The firm currently manages about $400m in US institutional assets

Stewart Investors is preparing to launch its first US-domiciled mutual fund.

The firm, which specializes in sustainable investing, could start operations for its forthcoming Worldwide Leaders Sustainability Fund on January 10, 2023, according to a recent filing with the Securities and Exchange Commission.

Stewart Investors, which has an office in New York, managed more than $17bn on behalf of clients globally as of the end of September, according to a statement provided by the company. It has overseen institutional assets in the US since the mid-90s, currently managing about $400m.

The new fund will invest primarily on the basis of sustainability, thereafter evaluating securities on the quality of management, franchise, financials and valuation, according to the fund’s prospectus. It plans to hold stocks of large- and mid-cap companies that have a valuation of at least $1bn and a minimum free float of $500m. At least 40% of investments will be made outside of the US, the company stated in the filing.

The fund is a US-based iteration of a strategy that has been used in other vehicles for nine years, according to the firm.

“The portfolio manager’s analysis aims to determine if the company’s products, services and operations contribute to positive social and environmental outcomes,” the prospectus states. To determine that, the portfolio manager evaluates a company’s commercial proposition, operational impact, company ethos and context.

In addition, engagement and voting will be “key parts of the investment approach as a means to mitigate business risks,” according to the prospectus.

The investment manager and subadvisor to the fund is First Sentier Investors, which owns Stewart Investors and managed more than $182.5bn in assets globally as of the end of 2021.

The portfolio manager is Stewart’s Sashi Reddy.

The fund has an investment minimum of $5,000 and will be available in Class Y shares, with net expenses after a fee waiver of 55 basis points.

iShares files for ‘breakthrough’ environmental ETF

It would follow the Morningstar Global Emerging Green Technologies Select Index

BlackRock’s iShares is prepping an ETF that would invest in “breakthrough innovations” and tech to help address climate change.

That fund, the iShares Breakthrough Environmental Solutions ETF, would track Morningstar’s Global Emerging Green Technologies Select Index, which includes US and foreign companies, according to an initial prospectus. The company filed Monday for the forthcoming ETF with the Securities and Exchange Commission.

The index is similar to the Morningstar Global Markets ex India Index, except that it excludes smaller market-cap companies as well as those with business in controversial areas such as tobacco, weapons and thermal coal.

Portfolio managers for the ETF are BlackRock’s Jennifer Hsui, Greg Savage, Paul Whitehead and Amy Whitelaw. An expense ratio for the ETF was not provided in the initial filing.

IndexIQ adds two ESG ETFs

The products are a partnership with Candriam and MacKay Shields

New York Life’s IndexIQ has added two more ESG ETFs to its line, the company announced Tuesday.

Those products include a high yield bond fund subadvised by MacKay Shields and a midcap US equity ETF that tracks a Candriam index.

The actively managed IndexIQ MacKay ESG High Income ETF, which commenced operations Tuesday, invests in US and non-US corporate debt, convertible corporate securities, loans and loan participation interests that are rated below investment grade, according to the prospectus.

At least 80% of the ETF’s assets will be invested in debt instruments that meet ESG criteria determined by MacKay Shields.

That ETF has net expenses of 40 basis points. The MacKay Shields global credit team subadvising it is led by Eric Gold.

Meanwhile, the passively managed IQ Candriam ESG US Mid Cap Equity ETF went live last month. The ETF invests in mid-cap securities that meet certain ESG criteria determined by Candriam. Net expenses for that product are 15 basis points.

IndexIQ’s Greg Barrato and James Harrison are portfolio managers on the fund.

The company had already provided several other ESG ETFs in partnerships with Candriam and MacKay Shields, and IndexIQ also has a suite of four “dual impact” ETFs.

ETF aimed at EV battery metals

The Element EV & Solar Materials ETF would get exposure through futures contracts

A forthcoming ETF from adviser Element would invest in the metals used in electric-car batteries.

The Element EV & Solar Battery Materials (Lithium, Nickel, Copper, Cobalt) Futures ETF would be listed on NYSE Arca, according to an initial prospectus filed earlier this month.

The ETF would invest “in a combination of financial instruments that are economically linked to elements necessary for the production of batteries and battery energy storage systems used in electric vehicle, solar and other industries. Such elements are currently lithium, nickel, copper and cobalt,” the filing stated. It would not invest directly in metal commodities but would gain exposure to them through futures contracts.

Total annual expenses for the ETF are set at 95 basis points. The fund would be managed Element ETFs’ William McDonough, John Calvert and John Raymond, as well as subadvisor Vident Investment Advisory’s Ryan Dofflemeyer and Austin Wen.

Non-transparent ETF would focus on climate change

Veridien's ETF would invest in small-, mid- and large-cap stocks

A new fund adviser, Veridien Global Investors, is planning to launch a non-transparent ETF focused on climate action.

The Veridien Climate Action ETF, which would be listed on NYSE Arca, plans to invest in US and foreign stocks of companies that “make a substantial contribution to mitigating climate change”, according to an initial prospectus filed this month with the Securities and Exchange Commission.

The ETF is non-transparent in that it would not disclose its holdings daily, instead providing a “verified intraday indicative value”.

Expense information for the ETF was not listed in the filing.

The fund would be advised by Toroso Investments and subadvised by Veridien. Portfolio managers would be Veridien’s Ariane Mahler and Paulus Ingram and Toroso’s Qiao Duan and Charles Ragauss.

VanEck adds sustainable energy ETF

Head of equity ETFs Peter Liao is portfolio manager

An ETF launched last week by VanEck is betting on more public investment to replace aging infrastructure and support clean energy.

The company’s Green Infrastructure ETF, which commenced operations October 18, tracks the Indxx US Green Infrastructure-MCAP Weighted Index. That index includes companies involved in renewable energy or building sustainable infrastructure.

“The state of the US’s infrastructure is in need of renewal and an upgrade in order to support a growing population and the goals of environmental sustainability and climate resiliency. In fact, the American Society of Civil Engineers gave the US a C- grade for its overall infrastructure in 2021, with sub-sectors including energy, hazardous waste and transit all earning D+ grades or worse,” VanEck director of product management Michael Cohick said in an announcement by the firm. “Fortunately, government initiatives and private sector innovations are providing potential opportunities for investors to participate in this long-term trend.”

The ETF’s top holdings are Cheniere Energy, Enphase Energy, First Solar, Quanta Services and Waste Management. Total operating expenses are 45 basis points.

VanEck’s head of equity ETFs Peter Liao is the new fund’s portfolio manager.

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