Market Overview

Goldman, Tudor Jones Team Up On Socially Responsible ETF

Goldman, Tudor Jones Team Up On Socially Responsible ETF

Famed investor Paul Tudor Jones and Goldman Sachs Asset Management have partnered for an exchange traded fund focused on companies that are effecting positive change. 

The Goldman Sachs JUST U.S. Large Cap Equity ETF (NYSE: JUST) debuted Wednesday. The new ETF tracks the JUST U.S. Large Cap Diversified Index, which is managed by Just Capital.

What Happened

ETFs adhering to environmental, social and governance principles or socially responsible investing have proliferated in recent years, with some issuers believing there is a receptive audience for such products among younger investors.

The JUST U.S. Large Cap Diversified Index uses 120,000 data points across 85 metrics to rank public companies on myriad issues.

Why It's Important

The index is designed to provide the broad market exposure of the Russell 1000 Index, while featuring only companies with above-average scores across all major social, environmental and governance issues critical to the American people,” according to a statement issued by GSAM and Just Capital. “Historically, companies in the index on average pay better, create more jobs, pay fewer fines, give twice as much to charity, emit less greenhouse gas and have higher return on equity compared with the rest of the Russell 1000.”

JUST allocates a combined 68.4 percent of its weight to the technology, financial services, consumer discretionary and health care sectors, a slight overweight to those sectors relative to the Russell 1000 Index.

Top 10 holdings in JUST include Apple Inc.(NASDAQ: AAPL), Inc. (NASDAQ: AMZN) and Microsoft Corp. (NASDAQ: MSFT).

What's Next

JUST debuted with over $50 million in seed capital and charges just 0.2 percent year, making it more than competitive with many existing ESG funds. Companies in JUST's underlying index typically have a return on equity that is 7 percent higher than the Russell 1000 members that are not in the Just Capital benchmark, according to GSAM.

The weighted average market value of JUST member firms is $234.66 billion.

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