What is BetaShares Global Sustainability Leaders ETF?
It’s an investment which has a number of ‘ethical’ screens to exclude businesses that are doing things that don’t align with investor’s own ethics.
So, the ETF’s search starts with the global share market. Then companies have to be in the top one third of performers in terms of carbon efficiency for their industry, or are engaged in activities that can help reduce carbon use by other industries.
Then it excludes a number of other factors such as no fossil fuel producers, no companies significantly engaged in armaments, gambling, alcohol or junk foods. There can be no companies with human rights or supply chain issues. No companies are allowed which lack gender diversity on the board. There are also other exclusions.
What shares does it actually own?
It then owns the 200 largest remaining businesses from the global large cap universe.
BetaShares Global Sustainability Leaders ETF’s largest 10 positions are: Nvidia, Apple, Visa, Home Depot, Mastercard, PayPal, Adobe, ASML, Toyota and Cisco Systems.
But there are 190 others, providing good diversification across a number of sectors and countries.
Is it the best ethical ETF?
I think it has a very good balance.
On costs, with an annual management fee of 0.59%, it looks good, with other very ‘ethical’ options being pretty expensive.
BetaShares Global Sustainability Leaders ETF has a number of quality holdings which are performing well. Since inception the ETF has returned an average of 23.4% per year.
It’s not quite as green or innovative as an idea like BetaShares Climate Change Innovation ETF (ASX: ERTH). Would an investor prefer a portfolio of shares that aren’t doing the ‘wrong’ things? Or a portfolio of companies that are trying to positively change the world (but may not be as financially compelling)? Time will tell which approach performs better.
For most investors, I think BetaShares Global Sustainability Leaders ETF is a very solid green option for all of the different factors. I’d be happy for it to be a holding for a long time in my portfolio.