Actively Managed ETF Drives Performance Through Investment in Companies Accelerating Decarbonization of The Economy
Engine No. 1, an investment firm that drives performance by tying companies’ social and environmental actions to economic outcomes, today announced the launch of its first thematic ETF, the Engine No. 1 Transform Climate ETF (Ticker: NETZ) with an anchor investment from investment advisory firm Jordan Park. NETZ is an actively managed fund that aims to invest in companies that will drive and benefit from the energy transition. The Fund is focused on holding companies that have a strategy to create value on their path to net zero across multiple industries, including transportation, energy, and agriculture.
“While most climate-focused funds avoid so-called ‘brown’ legacy companies, we believe there is no way to decarbonize the planet without these companies transforming, and there is no time to lose,” said Chris James, Founder of Engine No. 1. “Fewer than 200 companies account for more than 80% of corporate industrial greenhouse gas emissions.1 There is no path to net zero that doesn’t go directly through those companies. Solving climate change requires the largest investment in capital that the world has ever seen, giving investors the opportunity to play a meaningful and profitable role in transforming companies while also greening the planet.”
NETZ is composed of long-term, high-conviction investments backed by deep company, industry, and market research. The Fund looks to invest in companies that have a strategy to create value while working toward net zero. We leverage our Total Value Framework to understand which companies create the most long-term economic and societal value through the energy transition. The Fund takes a data-driven approach that puts a tangible value on a company’s environmental impact and ties that impact to long-term value creation. The Fund’s annual expense ratio is 0.75%.
“As active owners, our goal is to drive transformation at the companies that need it most, including some of the world’s most polluting companies,” said Yasmin Dahya Bilger, Head of ETFs at Engine No. 1. “As investors, we can’t just invest in young tech companies that aim to tackle climate change over a longer time horizon, we need to own and engage with the companies whose transformation will drive change now at scale. Doing so strengthens communities, creates green jobs in the United States, and better serves customers by localizing industry.”
To learn more about Engine No. 1 Transform Climate ETF (Ticker: NETZ), visit https://etf.engine1.com/netz.
About Engine No. 1
Engine No. 1 is an investment firm that is driving long-term value by tying social and environmental commitments to economic outcomes. The firm was founded on the shared belief that a company’s ability to create long-term shareholder value depends on the investments it makes in its employees, customers, communities, and the environment. For more information, please visit: https://engine1.com.
About Jordan Park
Jordan Park provides investment management and financial advice to a distinct community of individuals, families, and their related entities, including trusts and estates, as well as charitable organizations, foundations, donor-advised funds, and other clients. For more information, please visit: www.jordanpark.com
© 2022 Engine No. 1 LP. All Rights Reserved.
Before investing you should carefully consider the fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained from https://etf.engine1.com. Please read the prospectus carefully before you invest.
Investing involves risk, including the possible loss of principal. Shares of any exchange-traded fund (ETF) are bought and sold at market price (not net asset value (NAV)), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
The description of Engine No. 1’s investment strategy is intended to be representative, but may be changed from time to time by Engine No. 1, and Engine No. 1 may alter the information at its discretion. Engine No. 1 intends to be focused and directed in the selection of opportunities to actively engage with portfolio companies of the Fund. Engine No. 1 intends to measure the investment made by companies in their employees, communities, customers and the environment, including through the use of financial, operational, and environmental, social and governance (“ESG”) metrics. When Engine No. 1 engages in activism, such activities may not be successful or, even if successful, the Fund may incur additional costs or its investment may still lose value. In addition, while Engine No. 1 intends to seek opportunities to employ its active ownership beliefs, restrictions, corporate policies, regulatory and fiduciary concerns may limit the nature and extent of engagement under certain circumstances and such activities may not be successful.
This press release may contain forward-looking statements, which reflect Engine No. 1’s current views with respect to, among other things, Engine No. 1’s operations and performance. You can identify these forward-looking statements by the use of words such as “anticipate,” “approximately,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “seek,” “should,” or “will,” or the negative version of these words or other comparable words. Forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Engine No. 1 undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
Engine No. 1 may consider any ESG factors as core to its investment process but its specific focus for the Fund will be on the environmental factors most relevant to climate change. Engine No. 1 intends to incorporate ESG insights and analysis to ultimately drive financial and operational performance however there is no guarantee that this strategy will be achieved, and such assessment is at Engine No. 1’s discretion. Engine No. 1 does not use ESG ratings or rankings to exclude specific companies, but instead uses its own proprietary analysis to attempt to make better informed decisions. The Fund may forgo certain investment opportunities that do not meet Engine No. 1’s criteria and results may be lower than other funds that use different or no ESG criteria to screen out certain companies or industries.
The Fund is considered non-diversified and may be susceptible to an increased risk of loss due to adverse events that affect the Funds’ investments. The Fund may be concentrated in the securities of a single or smaller number of issuers, countries, regions, industries or sectors. Economic, political, legislative and regulatory developments or even pandemics may occur that significantly affect certain sectors. These may cause the Fund’s NAV to fluctuate more and have a greater impact on the Fund’s performance.
Small and medium sized companies may be more volatile and less liquid than larger companies. Smaller-sized companies may have limited markets, product lines, or financial resources and lack management experience. Micro-cap companies may be newly formed and subject to more abrupt or erratic market movements which may cause the Fund’s net asset value to be more volatile.
An outbreak of an infectious respiratory illness, COVID-19, has resulted in significant economic impacts. Other infectious illness outbreaks in the future may result in similar or other impacts.
The Fund is advised by Fund Management at Engine No. 1 LLC. Distributed by Foreside Financial Services, LLC.