ECOZ reaches milestone with top performance
About to reach its first birthday, and arriving at that milestone with top performance, is TrueShares Investments’ impactful, low-carbon climate resilient ESG ETF, ECOZ, sub-advised by Linda Zhang of Purview Investments.
As of 8 February, since inception, the fund is up 48.6 per cent, 13.9 per cent ahead of the S&P500 index, and leading in performance compared with the top US equity ESG ETFs by assets under management.
Michael Loukas (pictured), CEO, TrueMark Investments, explains that the launch of ECOZ last February was a question of pursuing the firm’s belief in ESG.
“ESG focused performance has yet to catch on in the States to the extent that it has in Europe, but we know that it is coming,” he says. Currently, aside from institutional demand, the audience is primarily registered investment advisers and some retail. “There are those who already believe in an ESG philosophy and those who are becoming converted. ECOZ is such a strong climate fund, addressing the carbon footprint reduction in such a significant way, that it’s an easily understood and equally appealing investment theme to all levels of investor, and the performance has been outstanding.”
Zhang’s Purview first launched its low-carbon ESG ETFs managed portfolios three years ago. She was a day one investor in investment superstar firm ARK Investments in Purview’s ESG managed portfolios, because technology innovations enable carbon emission reduction.
She notes that three years ago, Purview started compiling a database of US listed ESG ETFs. At the time, the sector represented about USD4 billion in assets and three years later it is now at USD54 billion. “It is a rare segment of the ETF industry that has seen such a rapid pace of growth,” she says.
In developing the high impact ECOZ product, Zhang was determined to create something that would have a drastic climate impact, beyond checking the ESG boxes.
“The way we do that is by identifying and embracing the massive industry transitions that are happening,” she says. “We wanted to address climate risks and invest in climate solutions and opportunities that arise from achieving carbon neutral economies. She cites a few such long-term trends, such as energy transition to a smart clean grid, transportation transition from fossil fuel combustion to electrification, the food industry shifting to a more plant-based approach.
“These industry transformations represent a massive capital shift towards new technology and new ways of doing things more sustainably. ECOZ represents putting the capital behind the champions who are leading these transitions.”
The team behind ECOZ has produced an intriguing visual of carbon offset, which measures the carbon footprint reduction by switching from a traditional index product to ECOZ. The comparison between ECOZ and S&P500 Index, based on switching USD1 million, shows that a BBQ aficionado would have saved 6,062 propane tanks in carbon emission per year.
For a driver, that’s nearly 368,000 miles saved. ECOZ drastically reduces a portfolio carbon intensity to 27 tons of GHG per million-dollar revenue, about only 1/6th of the intensity level of the S&P500 Index. “Individuals can essentially start their own carbon offset programmes by switching into cleaner investment products”, says Zhang.
TrueMark launched its ETF business in the year that the Covid pandemic hit and has raised USD100 million in its first year, USD10 million into the ESG product.
“ECOZ isn’t a box checking exercise,” Loukas says. “It’s more about investing for transitions to a clean future. Our managers are passionate about making an impact and aiming for robust investment outcome. We do this with purpose to make a difference.”
The firm will be launching its Green is Good campaign later this year.