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ETF Odds & Ends: Nuveen Debuts Net Zero Fund

While last week was fairly quiet in the ETF industry, with a handful of launches, this week was a frenzy of activity by comparison, with 10 new ETFs entering the market and a range of closures.

The most notable of the launches occurred today, with Nuveen rolling out the Nuveen Global Net Zero Transition ETF (NTZG). The new fund comes with an expense ratio of 0.55% and lists on the Nasdaq stock exchange.

The actively managed fund invests in three categories of global equities. These include climate leaders that have made significant and credible commitments to reduce their carbon emissions; companies that offer disruptive technology in support of fighting climate change; and high-carbon emitters that will contribute significantly to the reduction of global carbon emissions through efforts to reduce their own.

Nuveen will also regularly engage with the companies, especially the high carbon emitters, held in NTZG’s portfolio to encourage and speed up their transition in support of net zero carbon emission goals.

“We are seeking to decarbonize the overall portfolio at a rate that's faster than [what] has been prescribed by the Paris Climate Agreement, which calls for net zero emissions worldwide by the year 2050. We're also going to be reporting on these activities, both the engagement and the decarbonization rate, over time and through our marketing materials,” said Jordan Farris, Nuveen’s head of ETF product.

“With this product, we're looking to combine an alpha-seeking strategy with true impact investing through the engagement activities, which will give investors an additional opportunity with some of the other products in our suite to align their investments with their values,” he added.

Ultimately, the portfolio will hold 70-90 securities selected based on their activities around carbon emissions and a traditional fundamental investing methodology. The fund will also avoid investing in companies involved in personal and military weapons.

Additional Launches

Also on Friday, iShares rolled out a trio of ETFs on the NYSE Arca as follows:

The iShares Inflation Hedged US Aggregate Bond ETF (AGIH) tracks the BlackRock Inflation Hedged U.S. Aggregate Bond Index. The index is hedged with up to 10 inflation swap contracts of various maturities. It comes with an expense ratio of 0.13%.

The iShares Interest Rate Hedged US Aggregate Bond ETF (AGRH) tracks the BlackRock Interest Rate Hedged U.S. Aggregate Bond Index, which is hedged with up to 10 interest rate swap contracts of various maturities. It charges an expense ratio of 0.13%.

The iShares Inflation Hedged High Yield Bond ETF (HYGI) tracks the BlackRock Inflation Hedged High Yield Bond Index. Like AGIH, it hedges its inflation exposure with up to 10 inflation swap contracts of various maturities. It comes with an expense ratio of 0.52%.

Closures 
The week kicked off with the announcement of 13 ETF closures by iShares and New Age Alpha, and closures were somewhat of a theme throughout.

Another four funds were shuttered during the week. The Impact Shares MSCI Global Climate Select ETF (NTZO) closed on Tuesday, while the NextGen Trend and Defend ETF (TRDF) shut down on Thursday. Friday, both the Simplify Volt Fintech Disruption ETF (VFIN) and the Simplify Volt Pop Culture Disruption ETF (VPOP) saw their last day of trading.

In all, announced and completed closures are expected to total 57 by late August.

Other Changes 
There were also a number of name changes during the week. On Wednesday, the Legg Mason Low Volatility High Dividend ETF (LVHD) changed its name to the Franklin U.S. Low Volatility High Dividend Index ETF, and the Legg Mason International Low Volatility High Dividend ETF (LVHI) changed its name to the Franklin International Low Volatility High Dividend Index ETF.

And at the end of last week, the existing ETFs in the O’Shares lineup were reorganized into ALPS-branded ETFs with the same underlying indexes and expense ratios. The funds all now have ALPS at the beginning of their names. The affected ETFs are as follows:

 

Contact Heather Bell at heather.bell@etf.com

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