Page 18 - Investment Advisor July/August 2021

ESG HORIZONS

By Michael Fischer and Bernice Napach

Wealthy Investors Seek Purpose-Driven

Investments After Pandemic

Also, firm that beat ExxonMobile in proxy vote launches two ETFs.

ike many people emerging others to meet the growing demands of
from the pandemic lockdown, climate change. Target companies will
L wealthy investors are reassess- generally be chosen from the Russell
ing their life goals. According to a sur- 3000 index and span multiple sectors,
vey released in early June by UBS, 9 in including agriculture, consumer, energy,
10 investors want to align their invest- technology and utilities.
ments with their values. Molly Landes, a former portfolio
UBS conducted the survey in May manager at BlackRock and equity trad-
among 3,800 investors 25 and older er at Fidelity and Bank of America/US
with at least $1 million in investable Trust, will manage both funds. Fund
assets split across 15 global markets. Management at Engine No. 1 LLC will
Researchers compared the findings with serve as the ETFs’ advisor, and Brown
those from a study conducted in May Brothers Harriman & Co. will be their
2020 with a similar sample. play their part in making the world a bet- custodian.
Seventy-nine percent of respondents ter, more sustainable place,” UBS Global Both ETFs intend to use “proxy vot-
in the new survey said the pandemic Wealth Management Co-President ing guidelines” to encourage companies
had prompted them to reassess what Iqbal Khan said in the statement. “The to invest in their employees, communi-
was important. Half planned to increase heightened interest in charitable giving ties, customers and the environment
their charitable giving. Nearly 60% and desire to obtain sustainable invest- and thus create the transformational
reported being more interested in sus- ing advice from younger generations change that Engine No. 1 is seeking.
tainable investing than they were before is a sign, too, that this mindset may be They will also use metrics provided
the outbreak. here to stay.” by individual companies, Engine No.
Younger generations, in particu- 1 and a third party to measure compa-
lar, have turned their attention more FIRM THAT TOOK ON EXXONMOBIL nies’ commitments to those goals. Those
to purpose-related investing as a result FILES FOR 2 ETFs metrics include wages, workforce diver-
of the pandemic, according to the sur- The little known investment firm that sity, employee health and safety, capi-
vey. Seventy-nine percent of investors succeeded in replacing two members tal expenditures, carbon emissions, and
50 and younger said the pandemic had of ExxonMobil’s board of directors via land use, according to the SEC filing.
made them want to make more of a dif- a proxy vote in May has filed with the The ETFs will generally follow
ference in the world, compared with Securities and Exchange Commission to the recommendations of an indepen-
51% of older investors. Nearly three- launch two “transformational” ETFs on dent third-party proxy voting service
quarters of the younger cohort also said the Cboe BZX Exchange. retained to implement the proxy voting
they wanted to develop or update a com- Engine No.1’s Transform 500 ETF guidelines in determining how to vote
prehensive financial plan. is passively managed and based on on any specific matter.The SEC filing did
Eighty-four percent of female inves- the Morningstar U.S. Large Cap Select not identify the third-party proxy voting
tors in the survey said they had reas- Index, which targets the 500 largest U.S. service nor the third party provider of
sessed their goals amid the pandemic, companies by market capitalization and metrics to measure a company’s com-
compared with 76% of men. As investors is reconstituted and rebalanced quar- mitment to achieve transformational
begin to put the pandemic behind them, terly, according to the SEC filing. The change, which could potentially be one
51% of women plan to increase chari- Engine No. 1 Transform Climate ETF is and the same. As is usual in such SEC
table giving, versus 42% of men. actively managed and favors companies filings, expense ratios for the funds were Adobe Stock
“Globally, investors are motivated to that are transforming themselves and not disclosed.

16 INVESTMENT ADVISOR JULY/AUGUST 2021 | ThinkAdvisor.com