Huntington Asset Advisors, a unit of Columbus, Ohio-based
regional bank Huntington Bancshares, today rolled out an actively
managed "green" equity ETF that it says will target ecologically
focused companies that have clear success in marketing their
The Huntington EcoLogical Strategy ETF (NYSEArca: HECO), is
the first of two ETFs the company plans to bring to market,
Huntington Asset Advisors said today in a press release. The new
ETF , as well as another ETF it has in the works called Huntington
US Equity Rotation Strategy (NYSEArca:HUSE), will both come with
annual expense ratios of 0.95 percent, the company has said. The
new ETF's cost comes with a few waiver, without which the gross
expense ratio would come to 1.51 percent, the company said.
"Many green funds emphasize nascent technologies like wind and
solar because they are clean, without regard to whether that's a
logical investment," Randy Bateman, Huntington's chief
investment officer, said in the press release. "Our approach looks
at those opportunities, but then applies logic around whether or
not that company is producing products that are affordable by broad
The new ETF joins a number of funds focused on socially minded
investment, notably the AdvisorShares Global Echo ETF
(NYSEArca:GIVE), an actively managed portfolio launched in May that
targets so-called ESG companies that exhibit corporate and social
responsibility as well as ethical corporate governance. The
AdvisorShares ETF also gives back 40 basis points of its 1.70
annual expense ratio to a global ecological group headed by the
grandson of the late French oceanographer Jacques Cousteau.
A Challenging Niche
Broadly speaking, the socially conscious niche in the ETF world
has yet to have a fund in its ranks that has truly broken out.
iShares sponsors the two most successful social-values-based
ETFs:the $179.88 million iShares MSCI USA ESG Select Social Index
Fund (NYSEArca:KLD) and the $164.9 million iShares MSCI KLD 400
Social Index Fund (NYSEArca:DSI). Both iShares ETFs have an annual
expense ratio of 0.50 percent.
While San Francisco-based iShares-which also recently put the
iShares Human Rights Index Fund into registration-has had
success attracting investors to its socially conscious ETFs, DSI
and KLD, the record on funds based on do-gooder sentiments and
social conscience is mostly disappointing.
Pax World, the Portsmouth, N.H.-based money management
firm, has two funds based on social environmental and
governance screens, the Pax MSCI EAFE ESG Index ETF (NYSEArca:EAPS)
and the Pax MSCI North American ESG Index ETF (NYSEArca:NASI).
Together, the two funds had combined assets of $18.3 as of June 18,
according to data compiled by IndexUniverse.
Even worse, in 2010, Tulsa, Okla.-based FaithShares closed shop
after its five funds linked to particular pockets of the Christian
world failed to attract more than about $10.5 million.
Huntington said the companies that make the cut into HECO's
portfolio will demonstrate environmental stewardship and provide
products and services that advance green practices and show
evidence of sustainability.
With this approach, the ETF may be more correlated to market
indices, like the S&P 500, than specific green funds that
target clean tech or alternative energy, which may be more limited
"Companies with these sustainably green characteristics tend to
be more seasoned, have profitable business models, and are usually
good environmental stewards," Brian Salerno, the ETF's fund manager
said in the press release.
Salerno joined Huntington in 2005 and has nearly two decades of
experience in the investment management industry.
Huntington Bancshares, the parent company of the firm launching
the ETF, is a $56 billion regional bank holding company.
Permalink | 'copy; Copyright 2009 IndexUniverse LLC. All rights
Don't forget to check IndexUniverse.com's ETF Data
2012 IndexUniverse LLC
. All Rights Reserved.