Thrivent Asset Management, a Fortune 500 company with $190 billion in assets under management or advisement, has made its ETF debut with a socially responsible mid and small-cap equity fund.
The ETF invests in mid and small-cap equities committed to robust ESG practices.
The Thrivent Small-Mid Cap ESG ETF (TSME US) has been listed on NYSE Arca with an expense ratio of 0.65%.
The actively managed fund utilizes the New York Stock Exchange’s active ETF structure known as AMS (Actively Managed Solution).
The NYSE AMS model enables managers to avoid having to disclose daily portfolio holdings while maintaining the tax efficiency, liquidity, and lower costs typically associated with regular ETFs.
It achieves this through the use of a proxy portfolio that is designed to closely track an ETF’s performance but has a different composition and weighting to the ETF’s actual holdings.
Investment approach
The ETF is managed by Matthew Finn, Head of Equity Funds; and Chad Miller, Senior Portfolio Manager at Thrivent Asset Management. Finn and Miller joined Thrivent in 2004 and 2013, respectively.
The fund invests in companies with sustainable long-term business models that have demonstrated their commitment to ESG policies.
Eligible firms may include those that are managing their impact on climate change and natural resources, promoting fair labor practices and inclusive workplaces, developing enhanced supplier and vendor relationships, and supporting robust corporate governance practices in relation to business ethics, board composition, executive compensation, and management incentives.
The fund will not invest in any firm with an MSCI ESG rating of CCC (the lowest score in MSCI’s seven-point rating scale); however, it may include companies rated B (the second-lowest score) if that firm presents a compelling investment opportunity and has demonstrated a commitment to improving its ESG score.