BNY Mellon Investment Management has introduced its first sustainability-focused ETFs, launching a trio of actively managed strategies on NYSE Arca.
The funds mark BNY Mellon’s first foray into sustainability-focused ETFs.
The funds are fully transparent and provide exposure to US, developed ex-US, and emerging market equities.
They are the BNY Mellon Sustainable US Equity ETF (BKUS US), which comes with an expense ratio of 0.60%; the BNY Mellon Sustainable International Equity ETF (BKIS US), which has an expense ratio of 0.70%; and the BNY Mellon Sustainable Global Emerging Markets ETF (BKES US) at 0.75%.
All three ETFs are sub-advised by Newton Investment Management, a BNY Mellon affiliate specializing in socially responsible, theme-based investing.
Newton uses its proprietary sustainability framework to identify ‘ESG-aligned’ companies which, according to the funds’ prospectus, include impact companies developing solutions that address environmental or social issues, non-impact companies that are sufficiently managing material ESG-related risks, and even poorer ESG performers that have committed explicitly to transforming their business models and improving their ESG profiles.
No investment will be made in companies with controversial businesses. This includes tobacco firms, UN Global Compact violators, and companies with large carbon footprints and no emission reduction targets.
Final security selection is driven by both quantitative and qualitative assessments with Newton seeking attractively priced companies with good products or services, strong management teams, and sustainable business models.
Andy Provencher, Head of North America Distribution, BNY Mellon Investment Management, said: “As investors and advisors continue to seek out innovative ways to invest for long term growth while also driving meaningful change across a variety of ESG-related initiatives, the demand for fully transparent, actively managed investment strategies has grown, specifically within ETFs and sustainable solutions. Always focusing on client-orientated outcomes, the launch of this new suite of ETFs demonstrates our commitment to responding to client demand for sustainable solutions and leveraging the specialist capabilities of our investment firms.”
Curt Custard, Interim Head of Sustainable Investment and Global Head of Client Investment Solutions, Newton Investment Management, added: “Newton has deep expertise across the sustainable investing space and believes that active management plays a critical role in effectively identifying and measuring sustainable investments over time. As such, we are delighted to add these ETFs to our range of active product offerings, which will offer clients access to an investment area that we as a firm are well versed in and continue to prioritize.”
BNY Mellon made its debut as an ETF issuer in April 2020 with the introduction of a suite of ultra-low-cost funds, including the first truly zero-fee ETF. The firm currently houses $1.2bn across 13 ETFs including $420m in the zero-fee BNY Mellon US Large Cap Core Equity ETF (BKLC US).