SPDR® MSCI ACWI Climate Paris Aligned ETF (NZAC)

ETF SPDR® MSCI ACWI Climate Paris Aligned ETF Overview

Profile: This ETF invests in large and mid-cap stocks from developed and emerging markets that are aligned with the Paris Agreement's goals of limiting global warming to well below 2 degrees Celsius. It uses a custom MSCI index that screens for companies with lower carbon emissions and higher climate-related revenue compared to their sector peers.

Objective: The ETF aims to provide long-term capital appreciation by tracking the performance of the MSCI ACWI Climate Paris Aligned Index.

Issuer: State Street Global Advisors (SSGA)

• Reputation and Reliability: SSGA is a well-established and reputable asset management firm with over $4 trillion in assets under management.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in sustainable investing.

Market Share: The ETF has a relatively small market share within the climate-focused ETF space, but it is growing rapidly.

Total Net Assets: As of October 27, 2023, the ETF has approximately $1.2 billion in assets under management.

Moat:

• Unique Strategy: The ETF's focus on the Paris Agreement alignment provides a unique selling proposition in the climate-focused ETF space.
• First-mover Advantage: Being an early entrant in this space gives the ETF an advantage in attracting investors looking for exposure to climate-aligned companies.

Financial Performance:

• Since Inception (12/17/2020): The ETF has returned 15.44%, outperforming the MSCI ACWI Index by 5.44%.
• Year-to-Date (as of 10/27/2023): The ETF has returned 12.54%, compared to the MSCI ACWI Index's return of 10.23%.

Growth Trajectory: The ETF is expected to benefit from the growing demand for sustainable investments as climate change concerns escalate.

Liquidity:

• Average Trading Volume: The ETF has an average daily trading volume of approximately 200,000 shares.
• Bid-Ask Spread: The ETF's bid-ask spread is typically around 0.05%.

Market Dynamics:

• Favorable Policy Environment: Government policies aimed at reducing carbon emissions are creating tailwinds for climate-focused investments.
• Investor Demand: Increasing awareness of climate change is driving investor demand for sustainable investment options.

Competitors:

• iShares Global Clean Energy ETF (ICLN)
• Invesco WilderHill Clean Energy ETF (PBW)
• Xtrackers MSCI USA Climate Paris Aligned UCITS ETF (XCLU)

Expense Ratio: 0.20%

Investment Approach and Strategy:

• Strategy: The ETF tracks the MSCI ACWI Climate Paris Aligned Index, which selects companies based on their carbon emissions, climate-related revenue, and other factors aligned with the Paris Agreement.
• Composition: The ETF invests in a diversified portfolio of large and mid-cap stocks across various sectors, including technology, healthcare, and financials.

Key Points:

• Invests in companies aligned with the Paris Agreement's climate goals.
• Provides exposure to a globally diversified portfolio of stocks.
• Has a strong track record of outperforming the market.
• Benefits from the growing demand for sustainable investments.

Risks:

• Market Risk: The ETF's performance is tied to the performance of the underlying stocks, which can be volatile.
• Climate Change Risk: The success of the ETF's strategy depends on the effectiveness of the Paris Agreement and the adoption of climate-friendly policies.

Who Should Consider Investing: Investors seeking long-term capital appreciation who are also interested in aligning their investments with the goals of the Paris Agreement.

Fundamental Rating Based on AI: 8/10

Justification: The ETF has a strong track record, a unique and timely strategy, and benefits from the growing demand for sustainable investments. However, it is a relatively new ETF with a small market share, and its performance may be affected by market volatility and climate-related risks.

Resources and Disclaimers:

• https://www.ssga.com/us/en/individual/etfs/funds/spdr-msci-acwi-climate-paris-aligned-etf-fund-details
• https://www.msci.com/products/esg-investing/msci-acwi-climate-paris-aligned-index
• Data as of October 27, 2023. Past performance is not indicative of future results. This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.