In this episode of ETF Spotlight, I speak with Claire Smith, CEO and founder of Beyond Investing, a vegan and cruelty-free investment platform. They launched the world’s first vegan-friendly and climate-conscious ETF--The US Vegan Climate ETF (VEGN - Free Report) -- last week.
According to a report from GlobalData, the number of US consumers identifying as vegan grew 600% over a recent three-year period. Claire explains why animal welfare and climate change are linked and how a plant based diet can benefit the environment.
VEGN excludes companies engaged in animal exploitation, defense, human rights abuses, fossil fuels extraction and energy production, and other environmentally damaging activities.
Its top holdings are Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) and Facebook (FB - Free Report) . Notable exclusions include Amazon (AMZN - Free Report) , Berkshire Hathaway (BRK.B - Free Report) , Johnson & Johnson (JNJ - Free Report) and Walmart (WMT - Free Report) . Some other companies that are included in the index for being environment and animal friendly are Tesla (TSLA - Free Report) and Energizer (ENR - Free Report) .
Beyond Meat (BYND - Free Report) , the alternative meat company, is one of the hottest IPOs this year. Its main rival Impossible Foods is not yet public. These companies have benefitted a lot from the rapidly growing market for meat substitutes, which is expected to reach $2.5 billion by 2023, according to Euromonitor estimates.
However, some health experts have raised concerns about meatless products that are designed to taste like meat—they are highly processed, and usually have more sodium and saturated fat. So they may be good for the environment but not necessarily a healthier alternative to meat.
Additionally, VEGN comes with an expense ratio of 60 basis points. While investor interest in socially responsible themes is rising, there are much cheaper ESG ETFs available to investors now. For example, the Xtrackers MSCI U.S.A. ESG Leaders Equity ETF (USSG) charges just 10 basis points. Does VEGN have a unique appeal?
Please visit VeganETF.com to learn more about this ETF. Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email [email protected]
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