Pic: Stevica Mrdja / EyeEm / EyeEm via Getty Images
Want to give alcohol, fast food and weapons the boot? This ETF is promising to get you out
Aftermarket
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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 |
