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Portfolio > Portfolio Construction > ESG

Envestnet Launches Enhanced ESG Framework: Portfolio Products

By Bernice Napach

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What You Need to Know

  • Envestnet's enhanced ESG due diligence framework will evaluate equity and fixed income ESG strategies on its platform.
  • AdvisorShares launched ETFs focused on two industries due for a post-pandemic comeback: hotels and restaurants.
  • Invesco introduced a green building ETF.

Envestnet has launched an enhanced environmental, social and governance due diligence framework to evaluate equity and fixed income strategies on its platform.

The enhanced framework focuses on data from four key areas collected from asset managers via interactions and questionnaires involving ESG managers: firm-level ESG policies, ESG integration in the investment process, reporting reporting on impact and engagement on ESG issues.

These insights are then evaluated and scored by Envestnet to help “equip advisors with better information on ESG investment strategies, which they can use to cut through the excess noise as they effectively navigate the growing ESG fund landscape,” said Kiley Miller, associate portfolio manager at Envestnet | PMC, in a statement.

ESG investments have become the fastest-growing segment of Envestnet’s management money universe, increasing 98% in 2019 and 81% in 2020, according to the firm. As of year-end 2020, the Envestnet ecosystem has  more than $20 billion in ESG assets under management or administration in over 335,000 client accounts that are  overseen by more than 17,000 advisors.

AdvisorsShares Launches 2 Actively Managed ETFs

AdvisorShares has introduced two actively managed ETFs that invest in two different industries positioned for a comeback in the post-pandemic world.

The AdvisorShares Hotel ETF (BEDZ) and AdvisorShares Restaurant ETF (EATZ) each invest in about 50 or fewer stocks involved in the hotel and restaurant industries, respectively, along with related industries, and charge a 0.75% net fee for expenses.

BEDZ invested in hostels, resorts, cruise lines and other travel-related services. EATZ invests in restaurants, bars, pubs, fast food, takeout facilities and food catering services.

“We believe BEDZ and EATZ are uniquely positioned with their upside potential during an economic recovery and for the long-term growth opportunity that they may offer,” Noah Hamman, AdvisorShares CEO, said in a statement.

Both ETFs focus on companies with dominant positions in their respective markets, based on profitability, earnings quality, upside growth and technical attributes, and both are dynamically rebalanced and aim for low turnover.

Dan Ahrens, chief operating officer of AdvisorShares, is the portfolio manager of BEDZ and EATZ. He is also the portfolio manager of AdvisorShares Vice ETF, Pure Cannabis ETF (YOLO)  and Pure U.S. Cannabis ETF (MSOS).

Invesco Expands Thematic Environmental ETF Suite

Invesco has launched the Invesco MSCI Green Building ETF (GBLD), which joins the firm’s suite of thematic environmental ETFs.

The new ETF, which has an expense ratio of 0.39%, focuses on the entire green building ecosystem, providing access to “not just sustainable real estate, but companies involved in every stage of construction, redevelopment, and retrofitting green-certified properties,” said John Hoffman, Head of Americas, ETFs and Index strategies at Invesco, in a statement.

The ETF will track the MSCI Global Green Building Index, which is a subset of the MSCI Global Environment Index and includes companies involved in the design, construction, redevelopment, retrofitting or third-party certification of green-certified properties to effect climate change mitigation and adaptation. The index is reviewed quarterly with any changes implemented on the last business day of February, May, August and November.

iShares Renaming 2 ETFs and Changing Underlying Indexes

On or around June 21, the iShares Nasdaq Biotechnology ETF (IBB) and the iShares Semiconductor ETF (SOXX) will be changing their names and the indexes they track.

The Shares Nasdaq Biotechnology ETF will become the iShares Biotechnology ETF, trading the ICE Biotechnology, composed of U.S. biotech stocks, instead of the Nasdaq Biotechnology, composed of biotech and pharmaceutical stocks listed on the Nasdaq. ICE is the parent company of the NYSE.

Macquarie Launches Private Markets Educational Platform

Macquarie Asset Management has launched the Sharpe Advisor, a digital resource for financial advisors that provides comprehensive educational content about private markets, including a practice guide with specialized content from industry experiences and experienced allocation across asset classes.

The Sharpe Advisor derives its name from the Sharpe ratio, which measures risk-adjusted return. The Advisor includes explainer videos, on-demand webinars and a library of practice terms and concepts

“We see this as an opportunity to help advisors access usable resources and materials that will help them incorporate pirate market solutions in their solutions,” said Shawn Lytle, global head of public investments, Macquarie Asset Management.

MSCI Announces Strategic Alliance to Launch Life Sciences Indexes

MSCI, a leading index provider, said it is collaborating with the Royalty Pharma plc, the largest buyer of pharmaceutical royalties, to launch new indexes that aim to capture innovations that will disrupt the life sciences, biotechnology and pharmaceutical industry groups.

The initial indexes will measure the performance of companies focused on delivering new and innovative therapeutic treatments related to virology and oncology. Royalty Pharma will assist MSCI by providing expertise on various medical conditions, clinical trials, transformative therapies and technologies that may lead to breakthrough medical treatments.

The indexes are planned to launch later this year.

(Image: Shutterstock)

Bernice Napach

@Think_Napach

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