ETFs for Social Good
Three social issues that are trending in ETFs right now are gender diversity, car technology and cyber security. And you see the excitement building with the launch of HERS, CARS and CYBR right here in Canada.
Gender Diversity – Stats from Morgan Stanley show that high gender-diverse companies delivered incremental Return On Equity (ROE) of ~1% compared to low gender-diverse companies. This is the inspirations for HERS, which is targeted towards companies that ooze gender diversity from their board tables, senior leadership teams to management. The launch of HERS is on the heels of the fund called SHE (U.S. based), which has approximately US$340m in assets under management.
Pictured right – the Wall Street statue of “Bronze Girl”
Clean Car Technology – About 60 percent of carbon pollution from the transportation sector comes from passenger vehicles. Electrifying all of them with renewably generated, zero-carbon electricity by 2050, would address a huge part of the climate challenge for transportation. The ETF CARS incorporates the entire supply chain for clean electric vehicles. Think about the parts that make up a TESLA and charging stations; these companies have been selected to be a part of of the fund over traditional manufacturers that haven’t made investing in clean auto technology a priority.
Cyber Security – A 2017 cyber security report from Hiscox indicated that in 2016, cyber-crime cost the global economy over US$450b, over 2 billion personal records were stolen and in the U.S. alone, over 100 million Americans had their medical records stolen – yikes!
That’s why ETFs like CYBR and HACK, which has US$1.1b in assets under management, are targeted towards investing in technologies that keep us, and our information, safer online. Think about the recent Equifax data breach and that should be enough to send a shiver down your digital spine. Companies that keep us safe online will become increasingly more relevant in the digital age we live in.