EcoLogical Strategy ETF reports five years of outperformance

Oct 31st, 2017 | By | Category: Equities

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The EcoLogical Strategy ETF (NYSE Arca: HECO), an actively managed ETF focused on investing in green companies, has provided benchmark-beating returns since its inception five years ago.

EcoLogical Strategy ETF reports benchmark-beating performance on five-year anniversary

HECO is ranked in the top 1% of its category for the Morningstar Sustainability Rating.

Under normal conditions, HECO invests at least 80% of its assets in the securities of ecologically-focused companies – those that have positioned their businesses to respond to increased environmental legislation, cultural shifts towards environmentally conscious consumption, and capital investments in environmentally oriented projects. HECO is ranked in the top 1% of its category by the Morningstar Sustainability Rating.

The fund invests at least 65% of total assets in common stocks of companies listed in the US and can invest up to 35% of total assets in common stocks and American Depository Receipts of companies listed outside the US.

HECO has generated a 13.3% five-year annualized return, significantly outperforming the MSCI ACWI Index return of 10.2% over the same period. The fund has also managed to produce a lower annualized volatility of 9.4%, compared to 9.7% for the ACWI.

Ecological Strategy ETF

Source: Strategy Shares.

The fund’s largest sector exposure is financials with a 22.2% weight, followed by consumer staples (14.4%), consumer discretionary (14.0%), information technology (13.7%) and industrials (13.0%). The largest single holdings are Nvidia (6.5%), Best Buy (3.6%) and Unilever (3.3%).

David Miller, portfolio manager of HECO, commented: “Given the strong track record of ecological investing along with several global megatrends acting as a potential tailwind (i.e., institutional asset flow and important changes in investor demographics and concerns), we believe that investors can benefit by allocating a portion of their equity portfolios to ecologically oriented investment strategies.”

HECO’s net expense ratio is 0.95%. It has struggled to generate significant interest from investors and currently has assets under management of $8.5 million.

Strategy Shares, the ETF issuer behind HECO, also offers the US Market Rotation Strategy ETF (HUSE). The fund utilizes a quantitative component to identify potentially favourable sectors and market segments, as well as a tactical component that seeks to be opportunistic during market rallies and move into defensive positions during market declines. HUSE has AUM of $63m and a TER of 0.95%.

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