Impact Shares has announced the launch of its inaugural ETF, the Impact Shares NAACP Minority Empowerment ETF (NACP US) on NYSE Arca.
NACP is the first ETF from Impact Shares who is planning more funds that hone in on single ESG issues.
Introduced in partnership with civil rights organization the National Association for the Advancement of Colored People (NAACP), the fund invests in US large- and mid-cap equities from firms that empower minorities including hiring, pay and promotion practices as well as their products, services and supply chains.
The concept was originally developed with support from The Rockefeller Foundation’s Zero Gap initiative.
The underlying reference for the ETF is the Morningstar Minority Empowerment Index, built in collaboration with Morningstar and ESG analytics firm Sustainalytics.
“The ongoing social issues affecting communities of color present us with an opportune time to offer our members another way to advance our mission,” said Marvin Owens, senior director of the NAACP economic department. “The NACP ETF is the first of its kind in that investors can allocate money to the companies that have a track record of supporting the NAACP’s vision for corporate America and our constituents.”
The methodology uses indicators that are “in alignment with the NAACP’s vision of equality before the law and fair play everywhere”.
The index targets the 200 best-scoring stocks which are weighted according to float-adjusted market capitalization, subject to an individual company cap of 5% and sector constraints such that a sector may not deviate more than 2% from its weight in the Morningstar US Large-Mid Index. Reconstitution and rebalancing occurs on an annual and quarterly basis respectively.
Impact Shares has stated that it plans to release a suite of funds that target single ESG issues rather than broader values-based strategies that seek to address multiple issues in a single wrapper.
They will donate the net advisory proceeds it receives from each ETF it sponsors back to the collaborating partner non-profit. As such the firm has committed to directing its net advisory profits from NACP back to the NAACP and to its mission as a non-profit.
“As investors seek more opportunities to use their wealth and consumption to encourage corporate America to align with their social priorities, we’re pleased to partner with the NAACP to make this vision a reality,” said Ethan Powell, CEO of Impact Shares.
NACP comes with an expense ratio of 0.76%. The fund distributes income to investors on a quarterly basis.
The firm has also filed for a women’s empowerment ETF which will be launched in collaboration with non-profit YWCA Metropolitan Chicago.
The Impact Shares YWCA Women’s Empowerment ETF (WOMN US), which will track an index developed by gender analytics firm Equileap, will hold stocks of companies that empower women, including promoting women’s health and women’s advancement initiatives. The fund is scheduled to start trading on 27 August, the day after Women’s Equality Day.