VanEck has announced it has launched on the Australian Securities Exchange (ASX) its Vectors MSCI Australian Sustainable Equity exchange traded fund (ETF) (GRNV) which will offer investors exposure to a diversified portfolio of Australian companies meeting in-depth environmental, social and governance (ESG) and values-based screening criteria.
The new fund would track a new benchmark index, the MSCI Australia IMI Select SRI Screened Index, which was developed in partnership between VanEck and MSCI and leveraged MSCI’s expertise in ESG research based on fossil fuel reserves, socially responsible activities, ESG performance and controversies.
Based on the abovementioned criteria, the index would exclude companies whose businesses included alcohol, soft drinks, gambling, controversial, civilian and military weapons, nuclear power, animal husbandry, animal testing for cosmetics, genetically modified organisms, adult entertainment or tobacco.
“Furthermore, by joining with MSCI, the world’s leading ESG research and index provider, we are giving Australians the opportunity to invest in the highest ESG performing companies based on MSCI’s world leading in-depth research and analysis. MSCI is a leader in ESG indexing and research having recently won several awards in the ESG space,” Arian Neiron, VanEck managing director and head of Asia Pacific, said.
“GRNV enables Australians to invest with clearly defined sustainable investment outcomes in mind and is the most cost effective genuine sustainable Australian equity strategy available on ASX, with a management cost of just 0.35 per cent p.a. That sits significantly below management fees charged by many ethical or sustainable managed funds currently in the market.
“We expect this low-cost smart beta Australian sustainable equity ETF to appeal strongly to investors seeking to invest in companies making a positive impact on society, the environment and climate change.
“There is also recognition in the financial community that investment portfolios may benefit from the introduction of ESG and sustainability criteria to reduce risk, with many studies indicating the possibility of outperformance over the longer term.”