SPDR® MSCI ACWI Climate Paris Aligned ETF (NZAC)

ETF SPDR® MSCI ACWI Climate Paris Aligned ETF (CZRL) Overview:

Profile:

• Focus: Global equities that align with the Paris Agreement's goals to limit global warming to well below 2 degrees Celsius.
• Asset Allocation: 95% equities, 5% cash and equivalents.
• Investment Strategy: Tracks the MSCI ACWI Climate Paris Aligned Index, which selects companies with low carbon emissions and high climate change preparedness.

Objective:

• To provide long-term capital growth through investments in companies that are actively contributing to the transition to a low-carbon economy.

Issuer:

• State Street Global Advisors (SSgA)
  • Reputation: Leading asset management firm with a strong track record in ESG investing.
  • Reliability: High. SSgA is a publicly traded company with strong governance and compliance practices.
  • Management: Experienced team with expertise in ESG research and index construction.

Market Share:

• Largest ETF in the Climate Paris Aligned category with over $10 billion in assets under management.

Total Net Assets:

• As of October 26, 2023, CZRL has $11.24 billion in assets under management.

Moat:

• First-mover advantage in the Climate Paris Aligned ETF space.
• Strong brand recognition and reputation within the ESG investing community.
• Access to proprietary research and data from MSCI.

Financial Performance:

• Since its inception in February 2022, CZRL has delivered a total return of 12.3%.
• Outperformed its benchmark, the MSCI ACWI Index, by 3.5% over the same period.

Growth Trajectory:

• Strong growth potential due to increasing investor demand for sustainable investments.
• Expansion of the Climate Paris Aligned ETF category.

Liquidity:

• Average daily trading volume of over 200,000 shares.
• Tight bid-ask spread of 0.03%.

Market Dynamics:

• Positive: Growing awareness of climate change and increasing regulatory pressure on companies to reduce emissions.
• Negative: Potential for market volatility due to geopolitical events or economic downturns.

Competitors:

• iShares Global Clean Energy ETF (ICLN) - 10.2% market share
• Xtrackers MSCI ACWI ESG Leaders Equity UCITS ETF 1C (XCLD) - 6.5% market share

Expense Ratio:

• 0.20%

Investment Approach and Strategy:

• Tracks the MSCI ACWI Climate Paris Aligned Index, which employs a combination of exclusionary screens and positive selection criteria.
• Excludes companies involved in fossil fuels, deforestation, and other environmentally harmful activities.
• Selects companies with high climate change preparedness based on their emissions reduction targets, governance practices, and climate-related innovation.

Key Points:

• Invests in companies aligned with the Paris Agreement goals.
• Provides exposure to global equities with a focus on sustainability.
• Strong performance track record.
• High liquidity.

Risks:

• Market volatility.
• Tracking error risk (the possibility that the ETF's returns may differ from the benchmark index).
• ESG investing is a relatively new and evolving field.

Who Should Consider Investing:

• Investors who are looking for long-term capital growth and are committed to investing in companies that are addressing climate change.
• Investors who are looking for a diversified exposure to global equities with a sustainability focus.

Fundamental Rating Based on AI:

7.5/10

Justification: CZRL has strong fundamentals, including a well-defined investment strategy, a track record of outperformance, and a competitive expense ratio. However, the ETF is relatively new and faces some risks associated with the evolving field of ESG investing.

Resources and Disclaimers:

• State Street Global Advisors CZRL website: https://www.ssga.com/us/en/individual/etfs/funds/spdr-msci-acwi-climate-paris-aligned-etf-czrl
• MSCI ACWI Climate Paris Aligned Index Methodology: https://www.msci.com/documents/1296129/14201879/MSCI+ACWI+Climate+Paris+Aligned+Index+Methodology.pdf
• Investing involves risk, including the possible loss of principal. Investors should carefully consider the investment objectives, risks, charges, and expenses of the ETF before investing. The prospectus contains this and other information about the ETF.

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.