A vegan ETF just launched, and its holdings may surprise you
Lizzy Gurdus, CNBC
Sep 17 2019
ETFs are going vegan.
A new vegan-themed exchange-traded fund has hit the New York Stock Exchange, trading under the name U.S. Vegan Climate ETF (VEGN).
Launched on Sept. 10, the ETF costs 60 basis points to own and tracks Beyond Investing’s U.S. Vegan Climate Index, which itself tracks an index of 495 of the largest-capitalization companies in the U.S. stock market.
But Beyond’s strategy is to be more selective, excluding companies that harm animals, are involved in animal testing or produce animal-derived products. It also excludes companies tied to fossil fuel use and production, military and defense, and human rights abuses, according to its official factsheet.
That strategy gets at a rapidly growing part of the ETF market: investing based on ESG, or environmental, social and governance factors. The idea is to exclude companies that don’t meet a set of fairly rigid criteria around corporate social responsibility from certain ETFs in the interest of clear-conscience profits.
Given that, however, the vegan ETF’s holdings aren’t exactly what investors may be expecting, says Todd Rosenbluth, director of ETF and mutual fund research at CFRA.
“The name of this tries to get you in the door, but when you finally look under the hood and you see what’s there, you might be quite surprised,” he said Monday on CNBC’s “ETF Edge.”
While the vegan ETF does hold shares of newly public protein-substitute maker Beyond Meat in its portfolio, its other holdings reflect a different part of the market that may not read as explicitly “vegan”...
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