State Street Lists Latest S&P 500 ESG ETF

By Dieter Holger

State Street Global Advisors has become the latest investment firm to launch an exchange-traded fund that invests in the sustainable version of the bellwether S&P 500 index.

The Boston-based money manager, which has around $3 trillion under management, said its new ETF trading under the ticker symbol EFIV tracks the S&P 500 ESG Index that debuted in April 2019.

The index is overweight on tech, with Microsoft Corp., Apple Inc., Amazon.com Inc., Facebook Inc. and Google parent Alphabet Inc. among its top holdings. State Street's new ETF charges an expense ratio of 0.10% or $10 for every $10,000 invested a year.

After screening out companies involved in tobacco or controversial weapons, or with a low United Nations Global Compact score, the S&P 500 ESG Index aims to hold as many companies with high ESG scores by targeting 75% of the parent benchmark market cap by specific industry groups.

As of this year's rebalance, 311 members of the S&P 500 made it in the index and 56 were excluded, while another 138 were eligible but not selected.

State Street joins other top investment firms that have launched ETFs based on S&P's ESG index as more and more investors seek out funds with stricter sustainability requirements.

"The collective call for change is growing louder and investors are increasingly taking a stand through their investment choices," said Sue Thompson, head of SPDR Americas distribution at State Street Global Advisors, in prepared remarks.

In April last year, UBS Group AG was the first firm to list an ETF based on the index, the UBS ETF S&P 500 ESG UCITS ETF listed in Europe.

Then in June of last year, German money manager DWS Group GmbH & Co. KGaA launched in the U.S. the Xtrackers S&P 500 ESG ETF, trading under SNPE, that now holds some $234 million in assets.

Invesco Ltd. also has exchange-traded funds tracking the index: the Invesco S&P 500 ESG Index ETF listed in Canada and the Invesco S&P 500 ESG UCITS ETF listed in Europe.

In January, S&P and BlackRock Inc., the world's largest money manager with close to $7 trillion in assets, agreed to create ESG versions of the S&P's flagship indexes for new sustainable funds.

BlackRock forecasts that sustainable investments in exchange-traded and index funds world-wide will soar to $1.2 trillion by 2030. It said there was around $220 billion in such funds at the end of last year.

Write to Dieter Holger at [e-mail]; @dieterholger

(END) Dow Jones Newswires

July 28, 2020 10:52 ET (14:52 GMT)

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