Alternative Investments/ESG: EFIV – A New, Inexpensive ESG ETF From State Street

The SPDR S&P 500 ESG ETF (EFIV) debuted Tuesday.

State Street Global Advisors launched an ESG version of its blockbuster SPDR S&P 500 ETF Trust (NYSEARCA: SPY) that has AUM of $287.61 billion. The ETF has the best of both worlds from environment-social-governance (ESG) and the S&P500 stocks universe. (ThinkAdvisor)


This new ESG fund EFIV would include all S&P 500 companies but excludes companies with tobacco exposure, nuclear power producers and weapons manufacturers, and other companies with unfavorable ESG profiles. Companies that score in the bottom 5% of all UNGC-scored companies globally also do not make the cut.

“ESG investing is approaching a critical inflection point,” said Sue Thompson, Head of SPDR Americas Distribution at State Street Global Advisors. “The collective call for change is growing louder and investors are increasingly taking a stand through their investment choices.”

The new ETF EFIV has an expense ratio of only 0.10%, which is very competitive for an ETF in its category.

“EFIV meets the growing demand for cost-effective solutions that help put ESG investing into action by offering investors an ETF that seeks to track a more sustainable version of one of the most renowned benchmarks in the world,” added Thompson.

Collective call

Thompson has rightly drawn attention to the collective call for change via ESG investing. Investors are increasingly shifting funds to companies that score higher on ESG metrics and voting with their feet on those that are lagging behind.

According to data from ETFGI on global trends for ESG in ETFs/ETPs during the first half of 2020, inflows into these funds were US$3.49 billion during June 2020, bringing year-to-date net inflows to US$32.02 billion. These were more than three times the inflow of US$9.86 billion into ESG ETFs/ETPs seen in 2019.

Further, assets invested in ESG ETFs and ETPs increased by 7.3% from US$82 billion at the end of May to a new record of US$88 billion in June.

By these measures, EFIV is likely to be met with an enthusiastic response from investors.

Related Story:  ESG Funds More Than Triple in Latest Year                                                 

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