DSI iShares MSCI KLD 400 Social Index Fund

Huntington Asset Advisors has joined the ETF world with its new family of ETFs, the Huntington Strategy Shares. In the first iteration of this offering, the company has debuted the EcoLogical Strategy Shares ETF (HECO).

This launch is a big event in the ETF industry for a couple of reasons. First, Huntington is the first regional bank to offer ETFs and could be a harbinger of events to come in the space should the product see decent inflows. Furthermore, Huntington Asset Advisors is also one of the few new providers to receive SEC approval this year, suggesting that the deep freeze in terms of the government approval process could finally be thawing (Read ETF Investors: Beware The Coming ETN Backlash).

In terms of the actual product, HECO will be trending into the ecologically-focused space with a special look on companies that have pro-environment policies and practices. Overall, this will be done by tracking companies that have positioned their firms to respond to increased environmental legislation, cultural shifts to more environmentally conscious consumption, and capital investments in environmental projects.

 Since the product is actively managed, it will be somewhat expensive when compared to more traditional and broader-based ETFs. Net expenses come in at 95 basis points a year while the gross expense ratio is at 1.51%. Additionally, since the product is brand new, trading volumes are likely to be quite low which could imply wider bid ask spreads as well.

For holdings, the ETF currently has 25 stocks in its portfolio with no one security comprising more than 6.5% of assets. Top holdings go towards Hain Celestial Group (HAIN), Whole Foods Market (WFM), and eBay (EBAY).

Seemingly, the fund is tilted towards retail, technology, and financials, while it skewed away from utilities and industrials (see more on ETFs at the Zacks ETF Center).

ETF Competition

By and large, sustainable/ecologically friendly ETF investing hasn’t really caught on with most investors. However, this hasn’t stopped many issuers from debuting products in the still small space. Currently, there are four funds that can be described as tracking socially responsible industries and only two have any meaningful amount of assets with DSI and KLD both possessing more than $150 million in AUM.

Beyond these products, investors should also note the recent launch from AdvisorShares, the Global Echo ETF (GIVE). This product is also actively managed and focuses on sustainable and impact investment opportunities (read AdvisorShares Launches GIVE).

Volume is still light on this product while the net expense ratio comes in at 1.7%. This is a tad higher than what investors see in HECO and it could help Huntington to negate the first mover advantage in the active sustainable market space.

The real question is whether the social/environmentally friendly model can continue to attract assets and be a viable spot for six funds. Currently, the answer to this question is unclear, but if investors continue to embrace sustainable and environmentally friendly companies, basket products like HECO could see decent inflows in the near future.

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ISHARS-KLD 400 (DSI): ETF Research Reports
 
EBAY INC (EBAY): Free Stock Analysis Report
 
ADVSR-GLBL ECHO (GIVE): ETF Research Reports
 
HAIN CELESTIAL (HAIN): Free Stock Analysis Report
 
(HECO): ETF Research Reports
 
ISHARS-USA ESG (KLD): ETF Research Reports
 
WHOLE FOODS MKT (WFM): Free Stock Analysis Report
 
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