There is an exchange-traded fund (ETF) for everything. With each year, the axiom proves ever more true. ETFs have exploded in number, the field grown crowded with thousands of investment options. Each fund aims to offer a low-cost portfolio of assets, often linked together by theme, trend or other commonality.
Investors worried about climate change or cruelty to animals or both now have an ETF that caters to this theme: the U.S. Vegan Climate ETF (VEGN). The fund is provided by Beyond Investing and Beyond Advisors IC. Beyond Investing lists a Florida mailbox as its address, while Beyond Advisors IC is based in Jersey.
- The U.S. Vegan Climate ETF is the first fund to specialize in vegan investments.
- The fund invests in environmentally-friendly and cruelty-free companies such as Microsoft, Apple and Facebook.
- The fund has an expense ratio of 0.60%.
- As of May 2020, the ETF held $18 million in assets.
About the Fund
According to the fund's prospectus, it aims to "address the concerns of vegans, animal lovers and environmentalists by avoiding investments in companies whose activities directly contribute to animal suffering, destruction of the natural environment and climate change." This puts the U.S. Vegan Climate ETF in a growing class of socially responsible funds.
To find index members, the U.S. Vegan Climate ETF starts with the Solactive U.S. Large Cap Index, which consists of approximately 500 companies. From there, the fund removes any company involved with animal testing, animal-derived products, animal farming and animals used in sports or entertainment. Also excluded are fossil fuel companies, those that burn fossil fuels for energy production, and any company with a significant carbon footprint or history of environmental destruction. Tobacco, military and defense companies are eliminated, along with companies tied to human rights abuses.
As of March 31, 2020, the U.S. Vegan Climate ETF held 268 companies weighted by market capitalization. Top holdings include Apple (AAPL), Microsoft (MSFT) and Facebook (FB). The fund held approximately $18 million in assets as of May 2020.
A three-person team is responsible for curating the fund. They have prior ETF experience at Charles Schwab, BlackRock and State Street.
Cost to the Investor
As is often the case with vegan alternatives to traditional products and services, investors can expect to pay a premium for their investment in the U.S. Vegan Climate ETF. The expense ratio is 0.60%, compared with an average cost of 0.40% for socially responsible ETFs.
Still, the focus on social responsibility is enough to draw many eager investors, including a high proportion of millennial investors looking to reap the rewards of investing without compromising their values. Nearly 100 socially responsible ETFs collectively hold assets of approximately $30 billion, showing that investors as a group take this approach quite seriously.