An environmental index fund calculated to yield big returns
Investing in a plant-based future has just been made simpler, thanks to the newly launched US Vegan Climate Index. The brainchild of three vegan finance professionals, the index aims to achieve broad-based US market exposure for environmentally-oriented investors. Noting that six percent of the population identifies as vegan, the index was created “to serve the requirements of vegans and environmentalists who do not want their money supporting businesses whose activities they oppose” says Claire Smith, the chief executive officer for Beyond Advisors, which established the index.
The index screens U.S. large cap stocks (companies with a market capitalization value of over $10 billion) in accordance with climate-conscious and vegan principles. Examples of top holdings include Apple, Microsoft, and Alphabet. Left out of the index are any companies accused of human rights violations or involved in environmentally damaging activities, like fossil fuel production. Also knocked off the list: Companies that rely on animal testing, produce animal-derived products, or use animals for sport or entertainment. Approximately 41 percent of the market capitalization of the Solactive US Large Cap index is removed when these factors are taken into consideration.
returns that add up
When the new index fund is compared to the more standard Solactive US Large Cap, which serves as a proxy for the S&P 500 index, it demonstrates significantly better metrics in categories such as carbon emissions, waste products, and water utilization.
Also compelling: Investors can expect a financial yield similar to what they'd get from a standard index. When calculating returns the Vegan Climate Index fund would have had over the past six years, Beyond Advisors found it either matched or exceeded the Solactive US Large Cap index. Just one more reason it makes sense to invest in the future of our planet.
Takeaway: The US Vegan Climate Index will be calculated by Solactive, an index provider, and published on a real time basis under the Bloomberg ticker ‘VEGAN’. Want more information about the US Vegan Climate Index? Check out Beyond Advisors website. Need a crash course on index funds? Check out this helpful guide.