World’s First Vegan ETF Outperforms S&P For Second Consecutive Year

The US Vegan Climate ETF, the world’s first and only vegan exchange traded fund to date, has celebrated two years of its launch. For the second consecutive year, the fund has outperformed the S&P 500 Index, demonstrating the profit potential of ethical and sustainable investing. 

The US Vegan Climate ETF, listed under the New York Stock Exchange under the ticker VEGN, launched two years ago as the world’s first-ever vegan and climate-conscious ETF. Marking two years since its inception, the fund has yet again outperformed the S&P 500, and has attracted nearly $65 million in assets. 

VEGN

VEGN was launched in 2019 by Beyond Investing, a cruelty-free investment platform driven by ESG principles. The fund is free from all animal exploitation, screening out any firms that partake in animal testing or produce animal-based products, and is also weapons free and fossil fuel-free. 

The firm recently reported on its second-year performance, which showed that the VEGN ETF returned a total of 67.91% since its inception as of August 2021, against the S&P’s 57.07%. It builds on the strong performance of the fund last year, when it outstripped the S&P by ​2.12%. 

Commenting on the results, Beyond Investing CEO Claire Smith said: “More than anything, the enormous success of VEGN ETF underlines that animal-friendly and climate-conscious investing can be good for people, planet and your pocketbook.”

Some of the holdings in VEGN include Beyond Meat, the world’s first publicly-traded plant-based meat startup, and electric car maker Tesla.

Climate-conscious investing is profitable

Compared to traditional stocks, VEGN has a far smaller environmental footprint, as it avoids investing in companies whose businesses are embedded in high-emissions industries such as animal agriculture, fossil fuels and petrochemicals. 

According to data provided by Beyond Investing, the fund’s carbon footprint is 77% smaller than that of the S&P. It also bears a 98% reduction in waste and 93% smaller water footprint per unit of revenue. 

The investment firm says it now plans to continue to ramp up its portfolio of vegan-friendly and climate-conscious products, which will include those in both public and private markets. 

“With the expansion of our product range into global small cap thematic and regional vegan climate indexes, our aim is to provide complete portfolio solutions for vegans and environmentalists that bring about a kinder, cleaner, healthier world,” said Smith.

At the moment, the fund claims that its investments have contributed to progress on 11 of the 17 United Nations Sustainable Development Goals or SDGs, among them hunger, water, and clean energy. 

Related: Hong Kong and Swiss investors start venture to back ‘ecological blockchain’ startups

Sustainable investing trend

As climate awareness grows, sustainability has become a trend in almost every industry—including in finance. Sustainable finance products have become increasingly popular, with inflows into ESG-forward funds rising to a new high of nearly $2 trillion in the first quarter of 2021.

However, some reports suggest that many funds marketed as “green” or “sustainable” may not actually be planet-friendly in reality. One report published by the Economist has revealed that the majority of the top ESG funds globally are “stuffed full of polluters and sin stocks”. 

Lead image courtesy of Unsplash.