Impact Shares Corp., an investment management firm seeking to link nonprofits and exchange-traded funds, on Thursday introduced the Impact Shares NAACP Minority Empowerment ETF (NACP) that’s structured to reflect the social mission of the National Association for the Advancement of Colored People.

This is the first of what Frisco, Texas-based Impact Shares expects will be a series of ETFs tied to specific causes. 

NACP tracks the Morningstar Minority Empowerment Index that screens for companies based on their racial and ethnic diversity policies. The index selects the top 200 companies from the Morningstar US Large-Mid Cap Index with the highest minority empowerment scores, which are calculated based on social criteria provided by the NAACP to measure the strength of minority empowerment practices.

Those criteria include board diversity, discrimination policy, diversity programs and community development programs. In addition, the index screens for racial diversity and socially responsible attributes in a company’s supply chain system.

The rules-based index is free float market-cap weighted, with company weights capped at 5 percent. The NACP fund’s expense ratio is 0.76 percent.

The top 10 holdings read like a Who’s Who of Corporate America: Amazon.com; Microsoft; Alphabet; JPMorgan Chase; Johnson & Johnson; Bank of America; Intel; Wells Fargo; Chevron and Visa.

Impact Shares initially filed a registration statement for NACP with the Securities and Exchange Commission last November, at which time it said it expected the fund to launch in early 2018. Instead, the company had to make three amended filings to get the product approved.

“A big part of that is we have a unique offering,” says Impact Shares founder Ethan Powell. “We’re a 501(c)(3) nonprofit, and we’re collaborating with other 501(c)(3) nonprofits—in this case, it’s the NAACP. We’re launching and operating these funds for the benefit of our impact partners, who are our collaborating nonprofits. They receive all of the net advisory proceeds.”

If all goes according to plan, NACP will be the first ETF launched under the Impact Shares umbrella. The company expects to launch the Impact Shares YWCA Women’s Empowerment ETF (WOMN) next month. That fund, a collaboration between index provider Equileap and the YWCA Metropolitan Chicago, will invest in companies that empower women and promote women’s health and women’s advancement initiatives.

Powell says he expects to file—perhaps as early as this week—for a fund that’s a partnership with the United Nations, and that other funds are in the works with various partners targeting specific causes.

Regarding his collaborative partners, Powell says their role involves advising and consulting on the social screens relative to their organizational mission.

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