Original, independent, thought leadership
COW 1-30-2023-2istockphoto-686668622-612x612 (3)

Actively managed funds continue to dominate January 2023 sustainable fund listings

0:00 / 0:00 Listen to this article now Mutual funds/share classes and ETFs launched in January 2023 Fund Firm Mutual Fund/ETF AUM (M)* Expense Ratio (%) Sustainable Investing Approach (Summary) Calamos Advisors# Calamos Antetokounmpo Global Sustainable Equities ETF   0.95 Seeking companies with attractive ESG attributes on top of financial considerations, using a three-pronged ESG…

Share This Article:

The Bottom Line:  The trend of launching actively managed ETFs continues into 2023 through January, subject to higher expense ratios and challenging record of underperformance.

0:00 / 0:00
Listen to this article now

Mutual funds/share classes and ETFs launched in January 2023

Fund Firm

Mutual Fund/ETF

AUM (M)*

Expense Ratio (%)

Sustainable Investing Approach (Summary)

Calamos Advisors#

Calamos Antetokounmpo Global Sustainable Equities ETF

 

0.95

Seeking companies with attractive ESG attributes on top of financial considerations, using a three-pronged ESG process that consists of: 1) exclusionary screens; 2) materiality assessments and 3) environmental and social impact scoring.

GuideStone Capital Management#

GuideStone Funds Impact Bond Instl

GuideStone Funds Impact Bond Inv

GuideStone Funds Impact Equity Instl

GuideStone Funds Impact Equity Inv

42.5

9.3

61.4

13.4

0.5

0.79

0.86

1.21

Values-based:  Exclusions based on Christian values focusing on sanctity of life and spreading the gospel; human dignity and advancement; and stewardship of god’s creation.  

BlackRock/

iShares^

iShares ESG Aware MSCI USA Growth ETF

iShares ESG Aware MSCI USA Value ETF

4.1

 

4.1

0.18

 

0.18

ESG integration, positive characteristics + exclusions based on certain business practices and involvement in very severe, ongoing business controversies.

Putnam Investment Management#

Putnam ESG Core Bond ETF

Putnam ESG High Yield ETF

Putnam ESG Ultra Short ETF

Putnam PanAgora ESG Emerging Markets Equity ETF

Putnam PanAgora ESG International Equity

 

0.35

0.55

0.25

0.6

 

0.49

ESG integration using a sector specific approach that will vary when applied to corporate issuers, securitized debt, and sovereign debt.  

Notes of Explanation:  New listings exclude the addition of new share classes.  *As reported, otherwise blank.  #Actively managed funds. ^Index funds.  M=Millions.  Data as of January 31, 2023.  Sources:  Morningstar Direct and Sustainable Research and Analysis.

Observations: 

  • Continuing a trend that was observed throughout 2022 during which new fund launches were dominated by actively managed investment funds versus passively managed or index funds, eight of 10 new fund launches during the first month of 2023 were actively managed mutual funds and ETFs.  In particular, eight new ETFs were listed, six of which are actively managed.  These funds, consisting of 12 funds/share classes, added a combined total of $134.8 million in assets under management. 
  • Even as actively managed ETFs are expanding, they still make up only 5.8% of total sustainable ETF assets under management.  Actively managed mutual funds, on the other hand, account for 87.2% of sustainable assets under management.   
  • Listed by four firms, the newly launched funds consist of four actively managed fixed income funds and six equity-oriented funds, of which four are actively managed.  The list includes a first time ETF offering by Calamos Advisors LLC.  
  • The 10 new funds pursue a range of sustainable investing approaches, from values-based to various forms of ESG integration that combine exclusions.  As used here, sustainable investing refers to an overarching term that encapsulates the different strategies and approaches being employed today by investment managers and reflected in investment products such as mutual funds and ETFs.  The overarching sustainable investing strategies/approaches include values-based investing, negative/exclusionary screening, impact investing, thematic investing and ESG integration in its various forms.  In addition, proxy voting and issuer engagement may be employed as an overlay by one or more of the aforementioned approaches.  
  • The average expense ratio for the actively managed funds is 66 basis points, ranging from a low of 25 basis points to a high of 121 basis points.  This is almost four times higher than the 18 basis points each levied by the two iShares listed index funds, the iShares ESG Aware MSCI USA Growth ETF and the iShares ESG Aware MSCI USA Value ETF.
  • While declining markets provide an opportunity for active managers to add value, active managers across a broad mix of fund categories over short and long-term time intervals fail to outperform their comparison securities market index with underperformance rates increasing over longer time periods.
YOU MAY ALSO LIKE
$99.99
PER YEAR

Premium Articles Access Priority Support 1 Fixed Price

Free Trial
30 Day

Access to All Data No Credit Card Required Cancel Any Time

9.99
Monthly

Access to Premium Articles Priority Support Save 25%


Sign up to free newsletters.


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Research

Research and analysis to keep sustainable investors up to-date on a broad range of topics that include trends and developments in sustainable investing and sustainable finance, regulatory updates, performance results and considerations, investing through index funds and actively managed portfolios, asset allocation updates, expenses, ESG ratings and data, company and product news, green, social and sustainable bonds, green bond funds as well as reporting and disclosure practices, to name just a few.

A continuously updated Funds Directory is also available to investors.  This is intended to become a comprehensive listing of sustainable mutual funds, ETFs and other investment products along with a description of their sustainable investing approaches as set out in fund prospectuses and related regulatory filings.

Getting started

Many questions have surfaced in recent years regarding sustainable and ESG investing.  Here, investors and financial intermediaries will find materials that describe the various approaches to sustainable investing and their implementation.  While sustainable investing approaches vary and they have thus far defied universally accepted definitions, many practitioners agree that they fall into the following broad categories:  Values-based investing, investing via exclusions, impact investing, thematic investments and ESG integration.  In conjunction with each of these approaches, investors may also adopt various issuer engagement procedures and proxy voting practices.  That said, sustainable investing approaches will continue to evolve.

In addition to periodic updates regarding sustainable investing and how this form of investing is evolving, investors and financial intermediaries interested in implementing a sustainable investing approach will also find source materials that cover basic investing themes as well as asset allocation tactics.

Inesting ideas

Thoughts and ideas targeting sustainable investing strategies executed through various registered and non-registered sustainable investment funds and products such as mutual funds, Exchange Traded Funds (ETFs), Exchange Traded Notes (ETNs), closed-end funds, Real Estate Investment Trusts (REITs) and Unit Investment Trusts (UITs). Coverage extends to investment management firms as well as fund groups. 

Independent source for sustainable investment management company research, analysis, opinions and sustainable fund disclosure assessments