Toronto-headquartered Emerge Canada has made its ETF debut in the US by launching three actively managed equity strategies with sustainable investment mandates.
Each ETF utilizes Emerge’s proprietary ESG overlay to enhance its sustainability profile.
The Emerge EMPWR Sustainable Dividend Equity ETF (EMCA US), Emerge EMPWR Sustainable Emerging Markets Equity ETF (EMCH US), and Emerge EMPWR Sustainable Global Core Equity ETF (EMZA US) have been listed on Cboe BZX Exchange.
Funds with the same names were simultaneously launched on the NEO Exchange in Canada where Emerge already operates a suite of ETFs.
The listings form part of Emerge’s newly unveiled ‘EMPWR’ line-up, a suite of products sub-advised by women-led, third-party asset managers.
Emerge notes that women investment portfolio managers are underutilized and underrepresented in the finance industry, and rules intended to support minorities may actually make it more difficult for women portfolio managers to own equity in smaller businesses. EMPWR seeks to break down these barriers by supporting exceptional women in portfolio management.
While each ETF’s portfolio is constructed by the relevant sub-advisor, Emerge will apply its proprietary ESG overlay to each fund, removing violators of international norms as well as firms with significant operations linked to weapons, thermal coal, adult entertainment, gambling, and recreational cannabis.
Additionally, any company selected for inclusion must rank in the top half of its universe according to Emerge’s broad sustainability score, while the portfolio itself must have an aggregate sustainability score within the top third of the total universe.
The ETFs
The Emerge EMPWR Sustainable Dividend Equity ETF, sub-advised by Catherine Avery Investment Management, invests in dividend-paying North American companies that are considered able to maintain or increase their payments based on an analysis of the firm’s balance sheet and cash flow statements.
The Emerge EMPWR Sustainable Global Core Equity ETF, sub-advised by Zevin Asset Management, invests in companies worldwide, including those located in emerging markets, selecting securities based on a combination of fundamental research and global macro considerations. The fund aims to beat the broader market by focusing on securities that are expected to outperform by minimizing losses in declining markets. The ETF’s prospectus notes, however, that the fund may lag the broader market when equity markets are rising.
The Emerge EMPWR Sustainable Emerging Markets Equity ETF, sub-advised by Channing Global Advisors, seeks to identify high-quality, emerging market companies that are positively aligned with secular and tactical themes such as changes in commodities pricing, interest rates, exchange rates, or regulation.
Each ETF comes with an expense ratio of 0.95%.