State Street Global Advisors (SSgA), begun trading two new Fossil-Free ETFs, the SPDR MSCI EAFE Fossil Fuel Reserves Free ETF (Nyse Arca: EFAX) and the SPDR MSCI Emerging Markets Fossil Fuel Reserves Free ETF (Nyse Arca: EEMX) on Thuesday, October 25, 2016. Here is a synopsis of the new ETFs:
1.
FUND INFORMATION:
| Symbol: EFAX | Exchange: NYSE ARCA |
| Name: SPDR MSCI EAFE Fossil Fuel Reserves Free ETF | Net Expense Ratio: 0.20% |
FUND OBJECTIVE:
The SPDR MSCI EAFE Fossil Fuel Reserves Free ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the MSCI EAFE ex Fossil Fuels Index.
REFERENCE INDEX:
The MSCI EAFE ex Fossil Fuels Index is designed to measure the performance of companies in the MSCI EAFE Index that are “fossil fuel reserves free,” which are defined as companies that do not own fossil fuel reserves. For purposes of the composition of the Index, fossil fuel reserves are defined as proved and probable coal, oil or natural gas reserves used for energy purposes, but do not include metallurgical or coking coal, which is primarily used in connection with steel production. The Index is a subset of the MSCI EAFE Index (Parent Index), which serves as the initial universe of eligible securities for the Index.
The Parent Index captures large and mid-capitalization representation across developed market Europe, Australasia, and Far East countries, excluding the United States and Canada. In constructing the Index, the initial universe is screened in an effort to exclude companies with any ownership of fossil fuel reserves as determined by information disclosed by companies in sources including company publications, other public records, and third party data providers.
As of July 29, 2016, countries covered in the Parent Index included Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom, although this may change from time to time. The Index is weighted by free-float adjusted market capitalization. The Index is rebalanced quarterly as of the close of the last business day of February, May, August and November. New additions to the Parent Index are reviewed for inclusion in the Index each quarter, provided they have been added to the Parent Index by the rebalancing date. Any constituent deleted from the Parent Index as a result of index review is also deleted from the Index. As of July 29, 2016, a significant portion of the Index comprised companies in the financial sector and in companies located in Japan, the United Kingdom and Europe, although this may change from time to time. As of July 29, 2016, the Index comprised 890 securities.
Fund Top Holdings (10/27/16):
| Nestle S.A. | 2.13% |
| Roche Holding Ltd Genusssch. | 1.46% |
| Novartis AG | 1.44% |
| HSBC Holdings plc | 1.36% |
| Toyota Motor Corp. | 1.34% |
| British American Tobacco p.l.c. | 0.94% |
| Anheuser-Busch InBev SA/NV | 0.89% |
| GlaxoSmithKline plc | 0.87% |
| Commonwealth Bank of Australia | 0.86% |
| Siemens AG | 0.79% |
Fund Sector Allocation (10/27/16):
| Financials | 22.13% |
| Industrials | 15.03% |
| Consumer Discretionary | 13.88% |
| Health Care | 12.30% |
| Consumer Staples | 12.29% |
| Materials | 6.79% |
| Information Technology | 5.49% |
| Telecommunication Services | 5.34% |
| Real Estate | 3.52% |
| Utilities | 2.89% |
| Energy | 0.34% |
Fund Country Weights (10/27/16):
| Japan | 25.73% |
| United Kingdom | 15.15% |
| Germany | 9.79% |
| France | 9.56% |
| Switzerland | 9.51% |
| Australia | 6.83% |
| Hong Kong | 3.75% |
| Netherlands | 3.66% |
| Spain | 3.37% |
| Sweden | 2.98% |
Useful Links:
EFAX Home Page
2.
FUND INFORMATION:
| Symbol: EEMX | Exchange: NYSE ARCA |
| Name: SPDR MSCI Emerging Markets Fossil Fuel Reserves Free ETF | Net Expense Ratio: 0.30% |
FUND OBJECTIVE:
The SPDR MSCI Emerging Markets Fossil Fuel Reserves Free ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the MSCI Emerging Markets ex Fossil Fuels Index.
REFERENCE INDEX:
The MSCI Emerging Markets ex Fossil Fuels Index is designed to measure the performance of companies in the MSCI Emerging Markets Index that are “fossil fuel reserves free,” which are defined as companies that do not own fossil fuel reserves. For purposes of the composition of the Index, fossil fuel reserves are defined as proved and probable coal, oil or natural gas reserves used for energy purposes, but do not include metallurgical or coking coal, which is primarily used in connection with steel production.
The Index is a subset of the MSCI Emerging Markets Index (Parent Index), which serves as the initial universe of eligible securities for the Index. The Parent Index captures large and mid-capitalization representation across 23 emerging market countries. In constructing the Index, the initial universe is screened in an effort to exclude companies with any ownership of fossil fuel reserves, as determined by information disclosed by companies in sources including company publications, other public records, and third party data providers.
As of July 29, 2016, countries covered in the Parent Index included Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates, although this may change from time to time.
The Index is weighted by free-float adjusted market capitalization. The Index is rebalanced quarterly as of the close of the last business day of February, May, August and November. New additions to the Parent Index are reviewed for inclusion in the Index each quarter, provided they have been added to the Parent Index by the rebalancing date. Any constituent deleted from the Parent Index as a result of index review is also deleted from the Index. As of July 29, 2016, a significant portion of the Index comprised companies in the financial and technology sectors and in companies in China and South Korea, although this may change from time
to time. As of July 29, 2016, the Index comprised 786 securities.
Fund Top Holdings (10/27/16):
| Tencent Holdings Ltd. | 4.00% |
| Taiwan Semiconductor Manufacturing Co. Ltd. | 3.95% |
| Samsung Electronics Co. Ltd. | 3.50% |
| Alibaba Group Holding Ltd. Sponsored ADR | 3.06% |
| Naspers Limited Class N | 1.94% |
| China Mobile Limited | 1.91% |
| China Construction Bank Corporation Class H | 1.54% |
| Baidu Inc. Sponsored ADR Class A | 1.28% |
| Hon Hai Precision Industry Co. Ltd. | 1.09% |
| Industrial and Commercial Bank of China Limited Class H | 1.09% |
Fund Sector Allocation (10/27/16):
| Financials | 23.56% |
| Information Technology | 22.39% |
| Consumer Discretionary | 9.14% |
| Consumer Staples | 7.19% |
| Materials | 5.65% |
| Industrials | 5.62% |
| Telecommunication Services | 5.51% |
| Real Estate | 2.48% |
| Utilities | 2.43% |
| Health Care | 1.80% |
Fund Country Weights (10/27/16):
| China | 29.53% |
| South Korea | 16.64% |
| Taiwan | 14.33% |
| Brazil | 8.38% |
| South Africa | 7.70% |
| Mexico | 4.64% |
| Malaysia | 3.09% |
| Indonesia | 2.93% |
| Thailand | 2.04% |
| Philippines | 1.62% |
Useful Links:
EEMX Home Page
ETFtrack Comment:
Here is a comment from Christopher McKnett, managing director and head of ESG at State Street Global Advisors:
“With governments across the world committed to addressing climate change, investors have been increasingly looking to minimize the potential negative impact that exposure to companies owning fossil fuel reserves could have on their portfolios as traditional market-cap based passive strategies that do not screen out certain industries or business practices may not account for this risk.”