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ETF Trends and Impact Investing

Sustainability might be on the minds of your clients.

In the upcoming webcast, ETF trends and impact investing, Tom Lydon, co-CEO of ETF Flows LLC; Dave Nadig, CIO and director of research of ETF Trends; Stephanie Dobson, portfolio manager at Putnam Investments; and Caroline G. Edwards, CFA and senior investment director at Putnam Investments, will highlight tax-efficient investments focused on companies with sustainability priorities offering the potential to outperform, and examine this key investment opportunity.

“We believe that sustainable companies could continue to be more resilient and beneficial than others over the long term. We believe that active management has the potential to add meaningful context and value to sustainable investing. We believe that current conditions will illuminate new opportunities and new solutions that contribute to thriving people, systems, society, planet, and economy,” Katherine Collins, head of sustainable investing at Putnam, said in a research note.

Putnam Investments offers two ESG-related strategies, including the Putnam Sustainable Future ETF (PFUT) and the Putnam Sustainable Leaders ETF (PLDR).

Both PLDR and PFUT are actively managed ETFs that utilize the semi-transparent Fidelity fund model. They also incorporate Putnam’s proprietary sustainability ratings system and criteria to invest in top ESG-rated companies. PLDR focuses on companies that are currently demonstrating leadership in sustainability efforts, while PFUT focuses on those finding solutions to sustainability challenges for the future via their products and services.

Specifically, Putnam Sustainable Leaders ETF invests in companies whose focus on ESG issues goes well beyond just basic compliance, and for whom ESG is an integral part of their long-term success. These companies have transparent goals and provide consistent, measurable progress updates. PLDR invests larger percentages of its portfolio in fewer stocks, and the companies exhibit creative, proactive leadership in the sustainability issues that create long-term success, both for the companies themselves and their broader communities.

Additionally, the Putnam Sustainable Future ETF invests in companies that provide solutions to future sustainability challenges. It is a forward-looking approach, as these companies are helping to develop ESG practices and solve problems related to sustainability. PFUT focuses on impact companies as identified in its sustainability rating system, investing in companies driving economic development, as Putnam believes that strong sustainability practices equate to strong financial growth.

“Sustainable investing aims to identify companies that offer potential for strong financial returns while also demonstrating a commitment to sustainable business practices and positive impact. Sustainability is typically evaluated through analysis of environmental, social, and governance (ESG) policies, practices, and performance,” Collins added.

Financial advisors who are interested in learning more about impact investing can register for the Thursday, October 28 webcast here.

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