Schwab Asset Management has announced that it is launching the Schwab Ariel ESG ETF.
The fund invests in small and mid-cap stocks that have been screened based on ESG factors and will be sub-advised by Ariel Investments who will provide investors with access to their proprietary ESG investment process. The fund has an operating expense ratio (OER) of 59 bps.
Ariel will leverage its proprietary ESG research to derive a proprietary ESG-risk rating for each holding, or prospective holding, in the fund. In addition, Ariel will employ a negative screening process in the fund’s security selection, which seeks to exclude from the fund companies whose primary source of revenue is derived from the production or sale of tobacco products, the exploration for or the extraction of fossil fuels, the operation of private prisons or jails, and the manufacture of firearms, personal weapons, small arms, or controversial military weapons.
“Schwab is focused on empowering clients and we know that investing in-line with one’s values is increasingly important to many investors,” said Rick Wurster, President, The Charles Schwab Corporation. “We are very excited to introduce the Schwab Ariel ESG ETF in collaboration with Ariel. Together, we believe our unparalleled ETF and ESG capabilities can help investors achieve their financial goals.”