The Bottom Line: The drought affecting new focused sustainable mutual fund and ETF listings, which started after May of last year, continued into November 2024.
Notes of explanation: Mutual fund new listings refer to new funds, excluding new share classes. Latest data revised and updated. Sources: Morningstar Direct, Sustainable Research and Analysis LLC.
Observations:
• The drought affecting new listings of focused sustainable funds, which started after May of last year, continued into November 2024. There were no new mutual fund listings in November, however, one new sustainable ETF was launched in the latest month. The new ETF launch was offset by two ETFs that were delisted as well as three mutual fund closings in November.
• In the latest full month, focused sustainable long-term funds added $13.1 billion in net assets to reach $366.3 billion, for a 3.7% gain, attributable to capital appreciation and positive cash flows. This was the segment’s best overall monthly gain so far this year, exceeding the next best uptick that was observed in February when combined long-term assets added $11.3 billion and reached $337.2 billion. Long-term funds gained an average of almost 3.0% in November and 18.0% over the trailing twelve months.
• The newest ETF is a $17.3 million index fund managed by Empowered Funds dba ETF Architect dba EA Advisors (owned by Alpha Architect, LLC), a Pennsylvania-based manager with $8.5 billion in assets under management, and sub-advised by Stance Capital. The Stance Sustainable Beta ETF (STSB) seeks to replicate the performance of the Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free Index. The index is constructed around 100 large-, mid-capitalization equity securities of U.S.-listed companies, selected from a universe of 1,000 firms that excludes companies involved in the fossil fuel industry, fossil-fired utilities and companies which fail to meet a diverse set of environmental, social, and governance criteria established by Change Finance using, but not relying exclusively, on ESG data provided by ISS ESG. In addition, the sub-adviser may engage in shareholder activism with respect to the fund’s holdings by sending letters, engaging in dialog with company management and possibly submitting shareholder proposals on a variety of ESG-related issues.
• Since the start of the year, there have been only nine new mutual fund ETFs listings, versus a combined total of 66 funds over the same time interval last year.
