A New Type of ETF Is Here: Vegan, Environmental, and Ethical
There is a new fund that describes itself as animal-friendly, climate-conscious and designed to avoid all companies that allow the destruction of the environment or exploitation of animals. And you can buy it just by contacting your regular broker. The fund is called the US Vegan Climate ETF. Its ticker is VEGN and as of press time traded just above 28.
As more investors look deep into their long-held mutual funds, IRAs, or pension funds, some are becoming fairly horrified to know that their investment dollars are fueling growth in industries they don't support (such as coal mining, tobacco companies, or other sectors they may not wish to take an ownership position in). Now, exchange-traded funds (ETFs) are growing in popularity that focus on one type of security—environmentally sound or health-care oriented, or education-focused. They answer the question: "How can you do well by doing good?"
The latest types of these funds are ETFs trained on the vegan lifestyle. The latest one to launch is the US Vegan Climate ETF (Ticker VEGN) that seeks to track the "Beyond Investing US VEGAN Climate Index.
The VEGN index screens large-cap US companies for a variety of ESG (Environmental, Social, Governance) considerations, primarily animal harm and exploitation, as well as fossil fuels, environmental damage, and human rights
The US Vegan Climate ETF, (VEGN) seeks to invest in companies that offer:
- A humane approach. VEGN seeks to provide market-capitalization-weighted exposure to US companies that satisfy its rigorous ESG standards, limiting its largest holdings to 5% of the total portfolio.
- Animal-friendly. VEGN aims to exclude from consideration companies that harm animals, screening out companies that are involved in animal testing, animal-derived products, as well as animals in sports or entertainment.
- Good for the environment, good for people. VEGN screens out companies involved in fossil fuels and their use in energy production and also excludes companies involved in military and defense, as well as human rights abuses.
Through its rules-based approach to investing, VEGN seeks to avoid investments in companies whose activities directly contribute to animal suffering, destruction of the natural environment and climate change.
The index is independently calculated and published in real-time at VEGAN on Bloomberg and Reuters terminals, as well as reported daily on the Solactive website.
The US Vegan Climate ETF is listed on the NYSE under the ticker VEGN, with a total expense ratio of 0.60%. The prospectus explains the Index strategy and most importantly, the policies developed by Beyond Investing, which are enshrined in the rules governing the Index.
These rules seek to address a broad range of activities that hurt animals and to exclude companies engaged in those practices from the Index. These include extraction and burning of fossil fuel due to the threat to the environment and wildlife posed by global warming.