Impact Shares has concluded its hat trick of recent exchange-traded fund launches with Monday’s debut of the Sustainable Development Goals Global Equity ETF (SDGA), a product that essentially aims to help drive social change by improving lives in the planet’s poorest countries.
The fund tracks the Morningstar Societal Development Index composed of large- and mid-cap companies deemed to have a commitment to the United Nations’ sustainable development goals designed to make a positive impact in the world’s 47 least-developed countries.
The sustainable development goals are a collection of 17 global goals set by the United Nations Development Program that calls for integration of economic development, social equity and environmental protection. Adopted in 2015, these goals aim to foster action during the next fifteen years in areas ranging from poverty eradication and food security to water access and sustainable urbanization.
According to fund literature, the fund includes publicly listed companies operating globally that support the sustainable development goals and prioritizes those that have exposure to the 47 least-developed countries, along with other lower-income and lower middle-income countries, for a total of 80 countries. Up to 5 percent of the fund will be invested in companies directly based in one of those 80 nations.
In addition, the fund’s index also screens for environmental, social and governance criteria and it excludes companies involved with adult entertainment, alcoholic beverages, controversial weapons, gambling, military contracting weapons, nuclear energy and small arms, or tobacco.
Based in Frisco, Texas, Impact Shares is an investment management firm and 501(c)(3) nonprofit with financial backing from The Rockefeller Foundation’s Zero Gap Portfolio. Its goal is to partner with leading nonprofit organizations who want to leverage capital markets to further their missions and increase their social impact.
Impact Shares donates its net management fee to the nonprofit linked to a specific ETF. Its prior two ETFs were the Impact Shares NAACP Minority Empowerment ETF (NACP) that launched in July, and the Impact Shares YWCA Women's Empowerment ETF (WOMN) that began trading last month.
In the case of the Sustainable Development Goals Global Equity ETF, the management fee will go to the United Nations Capital Development Fund (UNCDF), an agency whose mission is to unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development in the least-developed countries.
Impact Shares says its donated fee will help the UNCDF with grant funding and technical assistance to leverage sources of finance needed for small- to mid-sized companies in the targeted countries.
The new SDGA fund has 34 holdings and charges an expense ratio of 0.76 percent, which matches the price tag of Impact Shares' prior two ETFs. The company had previously announced plans to launch these three funds during the months of July, August and September. It has other funds in the pipeline that target specific causes.