Engine No. 1 to launch an exchange-traded fund under the ticker ‘VOTE’

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on Jun 22, 2021
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  • The Transform 500 ETF has already secured commitments worth $100 million.
  • Engine No 1 says it will push companies to prioritise ESG issues.
  • The annual expense ratio of the new exchange-traded fund will be 0.05%.

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Engine No. 1 said on Tuesday it is launching an exchange-traded fund under the ticker VOTE. The Transform 500 ETF, it added, has already secured commitments worth $100 million (£71.83 million). The activist firm intends to launch more ETFs in the future.

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Engine No 1 to push companies to prioritise ESG issues

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The passive fund will track the Morningstar U.S. Large Cap Select Index and invest in the largest 500 companies in the United States. According to Engine No 1, it will push companies to prioritise environmental, social and governance (ESG) issues. In his statement on Tuesday, Managing Director Michael O’Leary said:

“Too many sustainable investing strategies shift an investor’s exposure away from companies that need to change rather than working to change them. We’re harnessing the power of investors in a new way to actually drive impact by how we vote our shares and work directly with companies.”

The news comes shortly after the activist firm’s notable victory against Exxon Mobil Corp (NYSE: XOM) that enabled Engine No 1 to nominate four directors on the oil giant’s board, three of which succeeded in winning a seat. The activist firm had started criticising Exxon for not playing its role in reducing emissions in December 2020.

Commenting on the launch of the new fund, Yasmin Dahya Bilger, Engine No 1’s head of ETFs, also said on Tuesday:

“There shouldn’t be a trade-off between positive impact and financial performance. VOTE will be a unique solution to this long-time concern, enabling index investors the ability to generate long-term value while bringing action to the most critical environmental, social, and governance issues facing these companies.”

The annual expense ratio of the new fund will be 0.05%

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The annual expense ratio of Engine No 1’s ETF will be 0.05%. The American financial advisory company, Betterment, as per the activist firm, will integrate the exchange-traded fund into its socially responsible investing strategies.

On Monday, a Bloomberg report said Exxon Mobil plans on slashing its U.S. office workforce by up to 10% a year. The job cut that will continue for the next three to five years will be based on performance evaluations. Only the lowest-performing white-collar workers will be laid off.

The oil giant opened at $62.80 per share on Tuesday and is currently exchanging hands at $63.80 per share. In comparison, the $270 billion had started the year at a much lower $41.50 per share.

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