Count Oppenheimer as the latest exchange-traded funds to tap the burgeoning environmental, social and governance (ESG) trend. Last week, the firm debuted the Oppenheimer Revenue Weighted ETF Trust Oppenheimer ESG Revenue ETF (NYSE: ESGL) and the Oppenheimer Revenue Weighted ETF Trust Oppenheimer Global ESG Revenue ETF (NYSE: ESGF).
2 New ESG ETFs
ESGL and ESGF continue the RevenueShares, the issuer acquired by Oppenheimer, of revenue-weighted ETFs. That group includes seasoned offerings, such as the RevenueShares ETF Trust (NYSE: RDIV) and the RevenueShares Large Cap Fund (ETF) (NYSE: RWL).
The new Oppenheimer ESG Revenue ETF holds the same stocks found in the S&P 500, but the ETF weights those stocks by revenue, not market capitalization.
ESGL's “ESG practices are evaluated using a proprietary ESG scoring methodology developed by the firm Sustainalytics. The revenue weightings are based on the OFI Revenue Weighted Strategies Team’s proprietary weighting methodology. We believe this approach has a durable value proposition as it offers investors exposure to large-cap U.S. stocks with strong ESG practices,” according to Oppenheimer.
Weight And Holdings
Consumer staples, consumer discretionary and technology stocks combine for over half of the new ETF's weight. Top 10 holdings include Apple Inc. (NASDAQ: AAPL), Ford Motor Company (NYSE: F) and AT&T Inc. (NYSE: T). The Oppenheimer Global ESG Revenue ETF culls its holdings from the widely followed MSCI All Country World Index and also weights those holdings on revenue, not market value.
ESGF holds “global large- and mid-cap stocks that have strong Environmental, Social, and Governance (ESG) practices. ESG practices are evaluated on the basis of a proprietary ESG scoring methodology developed by MSCI ESG Research,” noted Oppenheimer.
“Academic research has revealed that strong governance mechanisms have helped diminish default risk and lower bond yields. The ESG principle are more of a way of living or conducting business that correspond with a firm’s core values. Many companies have defined their corporate social responsibility to account for their impact on the environment and social welfare even if there is no legal requirement,” notes ETF Trends.
ESGF has annual fee of 0.45 percent while ESGL charges 0.4 percent per year.
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