Powell’s funds won’t change things overnight. They’ll only start generating capital for the NAACP and YWCA when they manage enough assets to cover costs -- about $20-30 million each. The minorities and women’s funds currently have a little more than $2 million each. Still, from the get-go, these charities will gain a new way to lobby the companies in their name-sake ETFs. Powell plans to have fund co-managers whose “sole purpose is that engagement” on behalf of the charities, he said.
Black Sheep
Other asset managers have made some efforts to hold companies accountable. Vanguard is ramping up engagement on gun violence, opiates and climate change, while BlackRock wants businesses to tell them how they positively contribute to society. But many take firm-wide positions, rather than reflecting different funds’ strategies, during shareholder votes.
For Powell, that isn’t good enough. The son of academics, he was the black sheep of the family when he chose to pursue finance. But after giving up a career at the Dallas hedge fund Highland Capital Management, he’s now using his Wall Street chops to make products that work for people like his parents. Impact Shares is developing other ETFs with the United Nations, the American Heart Association and Facing Addiction in America.
“We as investment professionals really need to take the narrative back a little bit and say, ‘Look, we’re not all wolves on Wall Street,”’ Powell said. “It’s all about execution and being truthful in the intent.”
This article provided by Bloomberg News.