Accessing Companies That Support Just Business Behavior

(Note: Second in a series of environmental, social and governance (ESG) ETFs)

Although the topic of corporate social responsibility is not a new one, it has gained considerable traction since the advent of the 2008 financial crisis as many people have blamed corporate greed for throwing millions of people out of work and into foreclosure when they could not pay their mortgages.

Similarly, opinion polls, such as the 2019 JUST Capital survey, have revealed that Americans, regardless of age group, political affiliation and income level, care a great deal about corporations walking the walk with regards to worker pay and well-being, customer treatment and privacy, beneficial products, preserving the environment and job creation.

Well, an exchange-traded fund (ETF) recently has been created to reflect the importance of these values. The Goldman Sachs JUST U.S. Large Cap Equity ETF (NYSEARCA: JUST) tracks an index of U.S.-listed large-cap stocks that are selected through the use of a survey that ranks companies for their practices vis a vis environmental, social and governance issues. Specifically, this fund tracks the JUST U.S. Large Cap Diversified Index, which is made up of the top 50% of Russell 1000 companies in each industry. The companies are then rated according to JUST Capital’s survey results.

According to JUST Capital, when compared to the companies that are excluded from the index, the companies that remain listed are, for instance, more likely to pay their workers a living wage, create jobs in the United States at a greater rate, produce less greenhouse gas emissions, give more to charity and pay less in fines for unethical behavior. This ETF’s launch also was a stunning success, as the fact that it ended its first day of trading with $251 million in assets catapulted it into the echelons of the top 10 equity ETF launches in history.

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Some of this fund’s top holdings include Microsoft Corp. (NASDAQ:MSFT), Apple Inc. (NASDAQ: AAPL), Amazon.com Inc. (NASDAQ: AMZN), Facebook Inc. Class A (NASDAQ: FB), Alphabet Inc. Class C (NASDAQ: GOOG), Alphabet Inc. Class A (NASDAQ: GOOGL), Johnson & Johnson (NYSE: JNJ) and Visa Inc. Class A (NYSE: V).

This fund’s performance has risen after the recent market downslide. As of June 23, JUST has been up 6.70% over the past month and up 40.88% for the past three months. It is currently down 1.62% year to date.

Chart courtesy of www.stockcharts.com.

The fund has amassed $128.19 million in assets under management and has an expense ratio of 0.20%.

In short, while JUST does provide an investor with a chance to merge a desire to profit with the need to sate one’s conscience, this kind of ETF may not be appropriate for all portfolios. Thus, interested investors always should conduct their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.