OppenheimerFunds, begun trading two new ESG Revenue-Weighted ETFs, the Oppenheimer ESG Revenue ETF (NYSE Arca: ESGL) and the Oppenheimer Global ESG Revenue ETF (NYSE Arca: ESGF), on Monday, October 31, 2016. Here is a synopsis of the new ETFs:
1.
FUND INFORMATION:
| Symbol: ESGL | Exchange: NYSE ARCA |
| Name: Oppenheimer ESG Revenue ETF | Net Expense Ratio: 0.40% |
FUND OBJECTIVE:
The Oppenheimer ESG Revenue ETF seeks to outperform the total return performance of the S&P 500 Index, the Fund’s benchmark index.
The Fund seeks to achieve its investment objective by attempting to replicate the portfolio of the OFI Revenue Weighted ESG Index (Underlying Index).
REFERENCE INDEX:
The OFI Revenue Weighted ESG Index is constructed by selecting companies from within the Benchmark Index (S&P 500 Index) that have strong environmental, social and governance (ESG) practices, and re-weighting those companies according to the revenue earned, subject to certain asset diversification requirements. The Underlying Index is reconstituted quarterly.
The Underlying Index is constructed using a scoring system established by Sustainalytics, a third party research provider, to measure the strength of each pillar of environmental, social, and governance practices for each company within the Benchmark Index. Based on that scoring, Sustainalytics assigns an overall composite ESG score to each company based on the score of each pillar, weighted according to that company’s industry. Those companies that rank in the top 50th percentile for their overall industry adjusted ESG score within the S&P 500 Index and pass a controversy category screen are selected for the Underlying Index, and then re-weighted according to revenue earned. The Underlying Index thus contains a subset of the securities in the Benchmark Index, in different proportions.
Fund Top Holdings (11/02/16):
| Apple, Inc. | 4.5% |
| UnitedHealth Group, Inc. | 3.6% |
| CVS Heatlh Corp. | 3.3% |
| Ford Motor Co. | 3.1% |
| AT&T Inc. | 3.0% |
| Kroger Co. | 2.5% |
| Verizon Communications, Inc. | 2.4% |
| General Electric Co. | 2.3% |
| Microsoft Corp. | 1.8% |
| Home Depot, Inc. | 1.8% |
Fund Sector Allocation (11/02/16):
| Info Technology | 17.8% |
| Consumer Discretionary | 15.3% |
| Industrials | 15.2% |
| Consumer Staples | 14.8% |
| Health Care | 9.0% |
| Financials | 8.2% |
| Telecoms | 5.5% |
Useful Links:
ESGL Home Page
2.
FUND INFORMATION:
| Symbol: ESGF | Exchange: NYSE ARCA |
| Name: Oppenheimer Global ESG Revenue ETF | Net Expense Ratio: 0.45% |
FUND OBJECTIVE:
The Oppenheimer Global ESG Revenue ETF seeks to outperform the total return performance of the MSCI All Country World Index, the Fund’s benchmark index.
The Fund seeks to achieve its investment objective by attempting to replicate the portfolio of the OFI Revenue Weighted Global ESG Index.
REFERENCE INDEX:
The OFI Revenue Weighted Global ESG Index is constructed by selecting companies from within the Benchmark Index that have strong environmental, social and governance (ESG) practices, as identified by MSCI ESG Research, Inc., screening those companies based on risk-adjusted performance, and then re-weighting those companies according to the revenue earned, subject to certain asset diversification requirements.
The Underlying Index is reconstituted quarterly. The Underlying Index is constructed by using a scoring system established by MSCI ESG Research, Inc. to measure the strength of each pillar of environmental, social, and governance practices for each company within the Benchmark Index. Based on that scoring, MSCI ESG Research, Inc. assigns an overall composite score weighted according to that company’s industry. Companies that rank in the top half of ESG scores are selected. Those companies are then screened based on their Sharpe Ratio, a measure of risk-adjusted performance. Those companies that rank within the top half according to their Sharpe Ratio are chosen for the Underlying Index, and then re-weighted according to revenue earned. Thus, the Underlying Index contains a subset of the securities in the Benchmark Index, in different proportions.
Fund Top Holdings (11/02/16):
| Samsung Electronics Co., Ltd | 3.3% |
| Nippon Telegraph & Telephone | 1.9% |
| General Electric Co. | 1.7% |
| Microsoft Corp. | 1.4% |
| Nestle SA | 1.4% |
| Siemens AG | 1.3% |
| ΙΒΜ | 1.3% |
| Sony Corp. | 1.2% |
| Mitsubishi Corp. | 1.1% |
| Johnson & Johnson | 1.1% |
Fund Sector Allocation (11/02/16):
| Industrials | 25.9% |
| Info Technology | 17.6% |
| Consumer Staples | 16.4% |
| Consumer Discretionary | 11.3% |
| Materials | 7.5% |
| Telecoms | 4.9% |
| Utilities | 4.8% |
| Energy | 4.1% |
| Health Care | 3.4% |
| Financials | 2.1% |
Fund Top Country Allocation (11/02/16):
| USA | 35.6% |
| Japan | 16.7% |
| S.Korea | 8.9% |
| Germany | 4.6% |
| France | 4.2% |
| Netherlands | 3.3% |
| Switzerland | 3.0% |
| Canada | 2.6% |
| UK | 2.5% |
| Australia | 2.3% |
Useful Links:
ESGF Home Page
ETFtrack Comment:
Here is a comment from John McDonough, Head of Distribution, OppenheimerFunds:
“Clients are increasingly seeking access to efficient global equity exposure and companies with strong ESG practices. Our ESG Revenue ETFs can offer investors a unique combination of benefits including exposure to great companies with exceptional business practices, an investment experience with attractive risk-reward characteristics, as well as alignment to their financial goals and personal values.”