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An ETF Focusing on Social Advocacy in Corporate America

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The increased awareness of social justice in the wake of widespread demonstrations across the U.S. may have a lasting impact on corporate America. Investors can also consider a socially responsible exchange traded fund strategy to make their investment portfolios reflect their personal viewpoints.

Marvin Owens, senior director of economic programs for the NAACP, argued that investing for social advocacy could receive a boost as the Black Lives Matter movement takes hold and more companies try to increase and promote diversity, CNBC reports.

As a way to capture this shift, investors can look to something like the Impact Shares NAACP Minority Empowerment ETF (NYSEArca: NACP), the first ETF dedicated to promoting racial equality among corporations.

This ETF is “the next evolution in our corporate advocacy work around closing the wealth gap for African Americans in this country,” Owens told CNBC. “In the current environment where everyone is kind of trying to figure out ‘how can I get involved, what can I do,’ capital has the power to make social change.”

The Impact Shares NAACP Minority Empowerment ETF tries to reflect the performance of the Morningstar Minority Empowerment Index, which utilizes social screens in determining the Minority Empowerment Composite Score to select 200 securities that reflect the NAACP’s values of justice, equality, and inclusivity, and invests in large-cap companies that empower minorities including hiring, pay and promotion practices as well as their products, services and supply chains.

NACP uses 10 screens in its stock selection process, including Board Diversity, Discrimination Policy, Scope of Supplier Social Programs, Digital Divide Programs, Freedom of Association Policy, Diversity Programs, Supply Chain Monitoring, Community Development Programs, Minority-Inclusive Health and Safety Management System, and Conflict Minerals Programs.

“The reality is investors are going to be able to push a process that results in real change in social justice,” Owens added. “I think companies are getting the message as well because as they really grapple with how to show up the right way in this moment, they’re being challenged by the NAACP and other organizations to make sure that the rhetoric that they’re using around making commitments, public commitments, to standing against racial discrimination is actually getting played out and lived out in the way they do business internally.”

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