Evolve Funds Group Inc (Evolve) has filed a preliminary prospectus with the Canadian securities regulators for the world’s first ETFs to bring carbon neutrality to traditional indices through the newly formed Evolve CleanBeta series of ETFs.
The Evolve S&P/TSX 60 CleanBeta Fund (SIXT) and the Evolve S&P 500 CleanBeta Fund (FIVE) are designed to provide investors with the performance of S&P/TSX 60 and S&P 500 Indices, respectively, while striving to offset the carbon footprint of the securities in the portfolios.
“We are very excited to be working with S&P and TMX to introduce the world’s first CleanBeta series of ETFs,” says Raj Lala, President and CEO at Evolve.
“Carbon dioxide is the primary contributor to our world’s greenhouse gases. Investors are now demanding that countries and companies work to reduce these emissions, however, this cannot take place overnight. Currently, trying to invest in only carbon neutral companies results in a significant narrowing of the investable universe. Our CleanBeta series of ETFs deliver commonly used traditional indices and strives to offset the carbon emissions from these companies, in order to deliver a clean beta solution.”
SIXT and FIVE seek to provide long-term capital growth by replicating, net of fees and expenses, the performance of the S&P/TSX 60 Index and S&P 500 Index, respectively, while striving to offset the carbon footprint of the constituent securities in the portfolio. In order to offset the carbon in these portfolios, Evolve will rely on a carbon footprint calculation provided by S&P Dow Jones utilising Trucost.
Trucost is a division of S&P Global. The data and analysis provided by Trucost will determine the carbon exposure of the companies in the indices. SIXT and FIVE will employ a variety of strategies, including purchasing and retiring carbon credits, as a means to neutralise the full carbon footprints.
The S&P/TSX 60 Index is a portfolio index of the large-cap market segment of the Canadian equity market. The S&P/TSX 60 Index is provided by S&P Dow Jones Indices LLC and is a market capitalization-weighted index of securities of its Constituent Issuers. The Index is comprised of 60 of the largest (by market capitalization) and most liquid constituents of the S&P/TSX Composite Index and is generally rebalanced quarterly.
The S&P 500 is widely regarded as the best single gauge of large-cap US equities. The S&P 500 is provided by S&P Dow Jones Indices LLC and is a market capitalization-weighted index of securities of its Constituent Issuers. The S&P 500 includes 500 leading companies in leading industries of the US economy. The S&P 500 is also the US component of the S&P Global 1200.
“Over the last several years, investors have been searching for solutions to meet their investment objectives while simultaneously satisfying their environmental responsibilities,” says Elliot Johnson, CIO and COO at Evolve. “Greenhouse gas emissions have become a global challenge with C02 contributing over 30 billion metric tons of emissions a year. While many companies are striving to reduce their carbon footprint, scientists believe we are not moving fast enough.”
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