IndexIQ launches ‘Healthy Hearts’ ETF in partnership with American Heart Association

Feb 3rd, 2021 | By | Category: Equities

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IndexIQ, a subsidiary of New York Life Investment Management, has introduced an ESG-related thematic ETF offering exposure to health care companies that treat cardiovascular diseases as well as firms supporting a heart-healthy lifestyle.

IndexIQ Healthy Hearts ETF

The ETF invests in companies aligned with the AHA’s mission of helping people live longer, healthier lives.

The IQ Healthy Hearts ETF (HART US) has been launched in partnership with the American Heart Association (AHA), the oldest and largest non-profit organization in the US dedicated to fighting heart disease and stroke.

The fund has listed on NYSE Arca and comes with an expense ratio of 0.45%.

According to the AHA, heart disease is the number one cause of death worldwide yet is largely preventable through lifestyle choices.

Due to an increasingly aging population looking to adopt healthier lifestyles, coupled with technological advancements in the monitoring, treatment, and prevention of heart disease, sectors surrounding heart health have experienced robust growth.

HART provides investors access to the potential financial benefits associated with this fast-growing theme while simultaneously doing good by supporting the AHA’s core mission of helping people live longer, healthier lives.

Methodology

The ETF is linked to the IQ Candriam Healthy Hearts Index which was developed by IndexIQ in collaboration with Luxembourg-headquartered ESG investment specialist and fellow New York Life subsidiary Candriam.

The index selects its constituents from a universe of firms with market capitalizations above $1 billion that are listed in developed markets as well as select emerging markets, most notably excluding China.

Based on insights from Candriam, the methodology first excludes UN Global Compact violators, companies that utilize animal testing or genetic modification or conduct business in countries with oppressive government regimes, and firms deriving significant revenue from adult content, alcohol, vaping, weapons, gambling, nuclear power, tobacco, or recreational cannabis.

The remaining constituents are assigned a thematic relevance score, between zero and ten, based on how much of a positive contribution the firm is making to global health-related goals.

Specifically, the process assigns higher scores to companies that derive significant revenue, whether on a percentage or dollar basis, from diagnosing and treating cardiovascular diseases, manufacturing and distributing healthy food and wellness products, providing health education services, or producing health-tracking devices and solutions.

The index includes the constituents with the highest thematic scores until either 80 stocks have been selected or the score of the next-ranked security is less than five. At least 50 stocks will comprise the index.

Constituents are weighted by free-float market capitalization subject to an individual cap of 5% and a floor of 0.5%. The index is rebalanced on a quarterly basis.

As of 14 January, stocks from the US accounted for around 60% of the index weight with a further 10% in Swiss firms and 5% each in companies listed in France, the UK, and Denmark.

Health care stocks comprised two-thirds (66.3%) of the index, while firms from the consumer discretionary and consumer staples sectors also played significant roles with weights of 12.2% and 10.5% respectively.

Notable positions included Eli Lilly and Company (6.0%), Apple (5.4%), Johnson & Johnson (5.2%), NIKE (5.1%), and Novo Nordisk (5.0%).

‘Advancing social good’

Yie-Hsin Hung, CEO at New York Life Investment Management, commented: “Sustainable investing has long been at the heart of our approach at New York Life Investments, and we are delighted to team with the American Heart Association to introduce a thematic, and impact-oriented investment strategy that harnesses our long-standing investment expertise with their enduring and powerful mission to help people live healthier lives. HART reflects that an investment strategy is not about generating potential returns alone – when it’s done in a constructive and sustainable way, it can also be a path toward advancing social good.”

Nancy Brown, CEO at American Heart Association, added: “While overall death rates from heart disease and stroke declined over the past two decades until a recent plateau, these gains were not equitably shared among all people. Our Social Impact Fund is one of the many new ways we are working to address this issue and improve health equity. We are grateful to be aligned with a like-minded, purpose-driven enterprise such as New York Life Investments, which is launching a product that affords investors potential returns that can also benefit their local communities and the social entrepreneurs that are contributing toward building an equitable, sustainable, and healthier future.”

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