State Street Global Advisors announced today the launch of a new ESG ETF, the SPDR S&P 500 ESG ETF (EFIV). EFIV seeks to track the S&P 500 ESG Index.
With the new ETF, State Street GA aims to provide investors with low-cost exposure to ESG investing. The new product will have an expense ratio of only 10 bp.
Sue Thompson, Head of SPDR Americas Distribution at State Street Global Advisors, said:
“ESG investing is approaching a critical inflection point. The collective call for change is growing louder and investors are increasingly taking a stand through their investment choices. EFIV meets growing demand for cost effective solutions that help put ESG investing into action by offering investors an ETF that seeks to track a more sustainable version of one of the most renowned benchmarks in the world. As ESG factor-based strategies pivot from check the box components to must have ingredients in every portfolio, State Street remains committed to providing a broader range of ESG solutions.”
Dan Draper, Chief Executive Officer at S&P DJI, added:
“S&P Dow Jones Indices (S&P DJI) has a longstanding relationship with State Street’s SPDR business that dates back more than 27 years, and we’re excited to expand this ongoing collaboration today. We’re delighted that State Street has licensed the S&P 500 ESG Index for its new fund, incorporating ESG factors into the core S&P 500 benchmark, which is widely regarded as the best single gauge of large-cap U.S. equities.”
The S&P 500 ESG Index is a broad-based, market-cap-weighted index, designed to measure the performance of securities meeting sustainability criteria, while maintaining similar overall industry group weights as the S&P 500. Using the S&P 500 as its underlying index, it excludes companies with an S&P DJI ESG score that falls within the worst 25% of ESG scores from each global GICS Industry Group, or that have a United Nations Global Compact (UNGC) score in the bottom 5% of all UNGC-scored companies globally. The index also excludes companies that:
- Are involved with tobacco-related products and services, based on certain levels of production, revenue or ownership;
- Are involved in controversial weapons, including cluster weapons, landmines, biological or chemical weapons, depleted uranium weapons, white phosphorus weapons, or nuclear weapons, or hold certain ownership stakes in a company involved in these activities;
- Do not have (i) coverage for tobacco- and controversial weapons-related involvement from the Index’s third-party data providers for such information; (ii) a UNGC score determined by Arabesque; or (iii) an S&P DJI ESG Score.