Fans of value-based and sustainable strategies have a new ETF option to track large American companies.
State Street released its SPDR S&P 500 ESG ETF on Tuesday, including firms in the S&P 500 that meet environmental, social and governance criteria.
Trading under the ticker EFIV, the fund will exclude companies involved with tobacco-related products and weapons, along with those that have a low ESG score from S&P Dow Jones Indices or a low United Nations Global Compact score. The cost is 10 basis points.
Investors are increasingly taking an interest in ESG characteristics as the COVID-19 pandemic continues, said Sue Thompson, head of SPDR Americas distribution at State Street.
“As you’re watching companies adapt to this human tragedy, companies that really focus on their employees’ health are going to come out of this stronger,” she said.
The decade’s top performers also outpaced broader markets over the short term.
ETFs that fall under the ESG category have already taken in $14.7 billion in 2020, by far the best year on record according to data compiled by Bloomberg. Much of that is due to products from BlackRock, the largest ETF issuer.
State Street is the third-largest ETF provider in the U.S., managing 16.5% of the $4.5 trillion assets. Its SPDR S&P 500 ETF Trust, or SPY, is the world’s largest with about $289 billion in assets.
