A Texas-based nonprofit investing firm is pioneering a new strategy in sustainability. Impact Shares is launching exchange-traded funds that donate a majority of their fees directly to charitable organizations like the Young Women’s Christian Association, or the YWCA, and the National Association for the Advancement of Colored People, or NAACP.
The strategy upholds the environmental, social and good governance, or ESG, principals that are becoming increasingly popular in the investment community, said Impact Shares Chief Executive Ethan Powell, a former hedge fund manager.
“We as investment professionals really need to take the narrative back a little bit and say, ‘Look, we’re not all wolves on Wall Street,”’ Powell said in a Bloomberg interview. “It’s all about execution and being truthful in the intent.”
Impact Shares has total assets of around $7 billion (€6.02 billion/CHF6.78 billion). The $4.1 billion (€3.53/CHF3.97) billion/ Rockefeller Foundation’s Zero Gap Portfolio providing initial capital.
The firm’s ETFs would donate around $5 annually of their $7.50 annual fees on every $1,000 invested.
The firm’s new WOMN ETF in partnership with the YMCA, for example, would help investors support companies that champion gender-equality standards. The ETF tracks the Morningstar Women’s Empowerment Index, which cites gender-diversity policies, equal pay and paid leave and other family-friendly programs in its list of companies.
“The WOMN ETF puts the power to empower women in everyone’s hands,” said YMCA USA Chief Executive Alejandra Castillo in a press release. “It allows us to leverage the capital markets to further our 160-year mission to eliminate racism and empower women.”
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