Alternative Investments/ESG: A New ETF From iShares Targets Water Sustainability
The new iShares ETF will invest in companies that provide water-related products and services and those that have demonstrated efficient water management.
The iShares MSCI Water Management Multisector ETF (NASDAQ: IWTR), a new ETF from iShares launched on Thursday, focuses on water sustainability and invests across the globe given that 41% of the world is in areas facing high or very high levels of water shortage. (Yahoo Finance)
iShares MSCI Water Management Multisector ETF (NASDAQ: IWTR)
The new ETF has a two-part investment objective. A section of its portfolio would invest in companies that provide water-related products and services, with at least 10% of their revenues coming from sustainable water activities – for example Xylem Inc. (NYSE: XYL), the largest equity holding in the fund at 7.29% of the portfolio, is one of the biggest providers of water solutions and technology in the world.
The other part focuses on companies that have demonstrated efficient water management, for example Taiwan Semiconductor Manufacturing Company (NYSE: TSM), weighted at 6.05% in the portfolio, is included because it reduced its consumption by 9% since 2010.
The ETF tracks the MSCI ACWI IMI Sustainable Water Transition Extended Capped Index, which has a dual focus on water supply activities and water usage.
The ETF has an expense ratio of 0.47%.
The ETF will also not invest in ESG-negative companies that are involved in business activities related to the tobacco, weapons, thermal coal or oil sands industries. It will also exclude screen out companies involved in a variety of types of controversies in the ESG space or those that have poor ratings in terms of ESG or water stress management.
Other ETFs in the water space include:
· Invesco Water Resources ETF (PHO): Invests in the value and growth stocks of organizations across diversified market capitalization. (YTD -20.93%)
· First Trust Water ETF (FIW): Has a concentrated portfolio of 36 holdings that represent the industry’s top players. (YTD 20.16%)
· Invesco S&P Global Water Index ETF (CGW): Comprises a portfolio of firms based in developed markets that market equipment, water utilities, infrastructure, materials and instruments. (YTD 27.56%)
Related Story: JP Morgan Launches New Active, Thematic, Sustainable ETFs
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