No Peer Group
According to the WOMN fund's prospectus, that product will match NACP’s expense ratio of 0.76 percent. In an era of downward pressure on fees, it’s fair to ask whether some investors might be put off by prices charged by Impact Shares' funds. For example, NACP’s holdings could be had for a lot cheaper in a standard index-based, large-cap ETF. Powell doesn’t feel that will be a problem for the intended audience of his funds.
“Frankly, we don’t really have a peer group because we’re the only 501(c)(3) registered nonprofit that is issuing ETFs, and providing all of the net advisory proceeds back to the collaborating nonprofit,” he says. “And I think there are people willing to pay for social alpha that creates meaningful engagement for the social issues they feel passionate about.”
Powell adds that he sees financial advisors as a target market for his envisioned suite of ETFs.
“Our goal at Impact Shares is to have social issues represented by a separately investible ETF, and the financial intermediary can show their clients a list of logos, effectively, and ask which of these organizations align with their social priorities,” he explains. “And they can feel comfortable knowing not only are they getting social alpha, which is superior corporate social outcome relative to specific causes, but they’re also getting financial beta [with index-based funds].”