Small cap ETFs — exchange traded funds — are few and far between but those with sustainability screens are even rarer.

ETF provider eInvest launched not only a small cap fund but one with an ESG screen which they’ve dubbed the eInvest Future Impact Small Caps Fund (ASX:IMPQ). It opened this morning at $4.02 per share.

It won’t pick any stocks that might grow. They will look for companies, “that contribute positively and sustainably to society and the environment”.

They will automatically exclude companies with over 10 per cent of their revenue in fossil fuels, alcohol, tobacco, weapons, forestry, gambling and fast foods.

Beyond this eInvest promised investors it would take into account ESG-metrics and engage with those companies in addition to the standard valuation methods, balance sheet strength and net cash position used by fund managers.

It will benchmark against the S&P/ASX Small Ordinaries Accumulation Index and may hold up to 70 Australian stocks.

For the individual investor, you don’t have to buy all of these stocks, you just buy units in the fund and the price fluctuates as if the portfolio was one company.

eInvest told investors they should be looking at a long term time investment period preferably over five years.

Management fees will be 0.99 per cent per annum and if performance criteria is met there is a monthly performance fee of 20 per cent.

Join the club…

Stockhead analysis has found seven other small cap ETFs and they have all had strong starts to the year.

Some of these manage entire portfolios, others merely invest in a foreign ETF that manages a portfolio of stocks (these are the ETFs with only one holding).

While there is no one particular stand out, all of them have returned at least 13 per cent so far this year.

Name Code Price 30 Day Volume Fund Assets ($M) YTD Return (%) # of Holdings
iShares Core S&P Small-Cap ETF IJR 111.05 3927.5 188.24 13.48 1
Vanguard MSCI Australian Small VSO 58.45 11806.5 244.262 15.77 158
Vanguard MSCI International Sm VISM 52.60 978.933 -- 17.05 1
BetaShares Australian Small Co SMLL 3.42 14691.5 29.6622 15.16 95
iShares S&P/ASX Small Ordinari ISO 5.17 35333.4 106.04 15.33 203
SPDR S&P/ASX Small Ordinaries SSO 15.34 2878.43 23.02 15.68 183
VanEck Vectors Small Companies MVS 20.89 11054.7 60.0643 15.25 85
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