ETFGI: US Vegan Climate ETF off to a promising start
Yesterday’s launch of the world’s first vegan-friendly and climate-conscious exchange traded fund (ETF) by Beyond Investing has seen strong initial take-up. After a flurry of global headlines last month anticipating the launch of the US Vegan Climate Exchange Traded Fund onto the New York Stock Exchange on September 10, 2019, the fund has reached $3.75m in Assets Under Management (AUM) on its first day of trading.
Listed under the ticker VEGN, this ethical investment fund designed for animal advocates and environmentalists will track the US Vegan Climate Index (VEGAN) a cruelty-free and fossil fuel-free index created by Beyond Investing.
Among the major US stock trading platforms which provided access to VEGN on launch day yesterday were Robinhood, Fidelity Investments, Folio Financial and more.
In addition, leading Australian stock trading platform Stake was quick to jump on board and respond to consumer demand for ethical investments. “Stake is always looking to provide our customers with alternative investment opportunities,” said Shawn Singh, Head of Global Operations. “We've taken up the US Vegan Climate ETF because of demand from our customers and are proud to be able to provide them with this opportunity.”
Over the course of the day, assets in the ETF rose steadily with total volume traded over the day of over $4m. Notably the bid-offer spread over the course of the day ranged from 1-3bps, making the ETF relatively cheap to trade.
Claire Smith, co-founder of Beyond Investing, said she was pleased with the initial results and looked forward to even more platforms responding to consumer demand for ethical investment options and making the VEGN ETF available to their customers.
“As an investor myself for many decades, I’ve longed for sustainable and ESG options that don’t force me to support animal exploitation, environmental devastation and abuse of human rights,” said Smith. “I created this index and ETF to help others like me take the pain of their portfolios, so I’m heartened to see that the launch of VEGN has got off to a promising start. I encourage providers of 401K, Roth IRA and other forms of pension products, as well as Registered Investment Advisers and robo-advisers to make VEGN available for their clients and to contact us at Beyond Investing if they need extra information.”
Smith also called on delegates at the upcoming UN Climate Summit in New York, which teen climate change activist Greta Thunberg is attending, to consider the role that investment plays in addressing the challenges of climate change.
“Animal agriculture is a leading driver of deforestation, species extinction, air and water pollution,” she said. “In addition to the UN’s report Livestock’s Long Shadow in 2006, two other recent reports by Oxford University researchers and the International Governmental Panel on Climate Change advocate for a shift to a predominantly plant-based diet. It’s imperative that we reward companies that take this imminent threat to our planet seriously, and where we invest our money sends a strong and powerful message to those that are causing environmental devastation.”
This US Vegan Climate Index takes the Solactive US Large Cap Index1 (a proxy for the S&P 500 Index2 and excludes any stocks whose activities are incompatible with a vegan and climate-conscious approach to investing, replacing damaging stocks with midcap alternatives that meet its ethical criteria.
This means the fund avoids investing in companies whose business models rely on animal exploitation – predominantly testing and animal-derived products – as well as removing fossil fuel and environmental threats such as plastic and agrochemicals, which are harmful to wild animals.
As Smith explains, “Though not affiliated with recent IPO Beyond Meat, VEGN does own shares in BYND thanks to it being at the vanguard of the plant-based movement and replacing some of the food sector exposures excluded for being involved in the meat industry. We are part of a growing movement of conscious capitalism.”
Compared against the unscreened Solactive US Large Cap Index, VEGAN has 61% less greenhouse gases, 89% less waste and 83% less water (as calculated on 30 June 2018 by Impact Cubed3).
Year-to-date, VEGAN (on a price return basis) has outperformed the Solactive US Large Cap Index by 3.53% and the S&P 500 Index by 3.8% (to 30 Aug 2019).
The chart below shows the performance of VEGAN since launch in June 2018, versus the Solactive US Large Cap Index, comparing the price returns of both indexes from 6 June 2018 to 30 Aug 2019.
The US Vegan Climate ETF will seek to track the VEGAN Index by purchasing a replicating portfolio of the Index constituents. The Index Constituents as at September 10, 2019, as well as other important disclosures can be found at the VEGN website www.veganetf.com.