Alternative Investments/ESG: Schwab Launches Small And Midcap ESG ETF

The new ETF will be sub-advised by Ariel, the first African American-owned investment firm in the U.S.

A new ETF from Schwab Asset Management will start trading from November 16, 2021. The Schwab Ariel ESG ETF offers investors exposure to small and mid cap stocks that have been screened for ESG factors. The actively managed, semi-transparent ETF has an operating expense ratio of 0.59%. (BusinessWire)

Schwab Ariel ESG ETF

Ariel Investments, the first African American-owned investment firm in the U.S. having nearly 40 years of ESG experience, will sub-advise the new ETF.

Ariel’s proprietary, value-based ESG investment process will be applied to small- and mid-cap U.S. companies with favorable ESG characteristics to deliver long-term capital appreciation.

Small and midcap ESG funds are a rarity

“At Schwab we deliver investment choices, resources and education,” said Malik Sievers, Head of ESG Strategy, Schwab Asset Management. “Our first proprietary ESG fund addresses a clear gap in the market for a small- to mid-cap ESG fund managed through a value investing lens. We are excited to bring investors a new option for incorporating ESG into their portfolios and which may help them to tailor their exposure to ESG investing based on their goals and preferences.”

“We believe in a more rigorous and thoughtful approach to ESG investing that uses proprietary analysis to gain a nuanced view of ESG risk, instead of relying solely on third-party rating systems,” said John W. Rogers, Jr., Founder, Chairman, Co-CEO, and Chief Investment Officer, Ariel Investments. “As long-term investors, we are driven by dialogue, not dictates. As a firm, we consistently engage with portfolio company management teams to address ESG issues deemed material to their financial health.”

Related Story: New ETFs For ESG Investing From iShares

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