San Francisco-based Newday Impact has launched its second ETF, an actively managed thematic equity fund targeting companies making positive impacts on UN Sustainable Development Goals (SDGs).
Doug Heske, CEO of Newday Impact.
Listed on NYSE Arca, the Newday Sustainable Development Equity ETF (SDGS US) has been brought to market in partnership with white-label ETF issuer Tidal ETF Services.
Adopted by UN member countries in September 2015, the SDGs are a set of 17 goals established to guide international cooperation on issues such as water sanitation, poverty, climate change and gender equality.
The goals, which are further broken down into 169 measurable targets, seek to promote active participation from governments, corporations and investors.
Doug Heske, CEO of Newday Impact, said: “The future of the world depends on sustainable development, and that in turn depends on ensuring that the adults of tomorrow will be willing and able to tackle challenges like producing enough food, ensuring clean water, and combating climate change. Our new SDG ETF is the first investment vehicle that makes it possible to support both needs.”
The fund invests in large and mid-cap stocks from developed and emerging markets, excluding firms involved in fossil fuels, armaments, gambling, tobacco, alcohol, or child labour.
The ETF comprises a selection of companies that are closely aligned with any of the following key UN SDGs: Diversity, Equity and Inclusion; Animal Welfare; Climate Action; Clean Water; Ocean Health; Stakeholder Capitalism; and Sustainable Agriculture.
A company’s alignment with UN SDGs is determined based on extensive analyses of a firm’s products and services, internal policies and corporate structure, and compliance with globally recognized ESG reporting standards.
Once eligible companies are identified, Newday selects between 40 and 60 portfolio constituents using a bottom-up approach based on seven fundamental factors: earnings expectations, earnings quality, profitability, operating efficiency, valuation, governance, and risk.
The ETF comes with an expense ratio of 0.75%. Newday will donate 10% of the ETF’s revenues to global youth education and skills development programs.