When it comes to investing in an exchange-traded fund (ETF), many are concerned that the publicly traded corporations available to invest in aren’t pushing for racial equity in how they conduct business.
There are already investment funds available to fight for environmental, social, and governmental causes – called ESGs – but what about race relations?
There are also those who wonder if such a fund would perform well on Wall Street at all. But if you think you have to compromise between fighting the power and making money, think again.
The Impact Shares NAACP Minority Empowerment ETF (ticker: NACP) was created in 2018 as a finance product that holds corporations accountable for the lip service they pay to racial equity.
To be amongst the NACP’s 175 equity holdings, a corporation must pass through 10 screens – including board and supplier diversity, prohibiting the use of conflict minerals in manufacturing, and support of programs that address “the lack of access to modern means of communication/Internet” in Black communities (known as the “digital divide”), among other requirements.
While there’s no question whether these kinds of commitments are morally upstanding, they also make good financial sense. As other ETFs struggled in the face of the COVID-19 pandemic, according to Barron’s, the NACP has “weathered the coronavirus crisis better than the S&P 500.” Are you ready to invest?