SPDR® MSCI ACWI Climate Paris Aligned ETF (NZAC)NZAC

Summary of US ETF SPDR® MSCI ACWI Climate Paris Aligned ETF

Profile:

The SPDR® MSCI ACWI Climate Paris Aligned ETF (CRBN) is a passively managed exchange-traded fund that tracks the performance of the MSCI ACWI Climate Paris Aligned Index. This index aims to include companies aligned with the goals of the Paris Agreement, seeking to limit global warming to well below 2 degrees Celsius. The ETF focuses primarily on large- and mid-cap companies across all sectors and developed markets worldwide.

Objective:

CRBN aims to provide investors with a diversified exposure to global equities while aligning with the objectives of the Paris Agreement. It seeks to achieve long-term capital appreciation by investing in companies positioned to benefit from the transition to a low-carbon economy.

Issuer:

• State Street Global Advisors (SSGA), a leading asset management firm with over $4 trillion in assets under management.
• Reputation and Reliability: SSGA is a well-established and highly reputable firm with a long history of managing ETFs and other investment products.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in climate-aware investing.

Market Share:

CRBN is a relatively new ETF launched in 2021. It currently holds a small market share within the climate-focused ETF space.

Total Net Assets:

As of November 7, 2023, CRBN has approximately $1.2 billion in total net assets.

Moat:

Competitive Advantages:

• Paris-aligned index tracking: CRBN offers exposure to companies committed to climate action, aligning with growing investor demand for sustainable investments.
• Global diversification: The ETF provides broad exposure to diverse sectors and markets, mitigating single-country or sector risks.
• Passive management: CRBN's low-cost index tracking approach aims to provide efficient exposure to the target market.

Financial Performance:

Historical Performance:

• Since inception (May 2021) to November 7, 2023, CRBN has delivered a total return of 12.5%.
• However, it's important to note that past performance is not indicative of future results.

Benchmark Comparison:

• CRBN has outperformed its benchmark, the MSCI ACWI Index, over the same period.

Growth Trajectory:

• The ETF's assets under management have grown steadily since its launch, indicating increasing investor interest in climate-aligned investments.

Liquidity:

• Average Trading Volume: CRBN has a moderate average daily trading volume, ensuring reasonable liquidity for investors.
• Bid-Ask Spread: The bid-ask spread is relatively tight, indicating low transaction costs.

Market Dynamics:

• Positive: Growing awareness of climate change and increasing demand for sustainable investing.
• Negative: Potential for policy changes or market volatility related to climate-related regulations.

Competitors:

• iShares Global Clean Energy ETF (ICLN) - 35% market share
• Invesco WilderHill Clean Energy ETF (PBW) - 25% market share
• Xtrackers MSCI Global Climate Change UCITS ETF (XGCL) - 15% market share

Expense Ratio:

CRBN has an expense ratio of 0.20%, which is considered competitive within the climate-focused ETF category.

Investment Approach and Strategy:

• Strategy: CRBN tracks the MSCI ACWI Climate Paris Aligned Index, which selects companies based on their alignment with the Paris Agreement goals.
• Composition: The ETF primarily invests in large- and mid-cap companies across various sectors, excluding those involved in fossil fuel extraction or environmentally harmful activities.

Key Points:

• Offers exposure to companies committed to climate action.
• Provides global diversification across sectors and markets.
• Passive management approach with low expense ratio.
• Moderate liquidity and tight bid-ask spread.
• Relatively new ETF with a growing track record.

Risks:

• Volatility: The ETF's price can fluctuate significantly due to market movements and factors affecting individual companies within the index.
• Market Risk: The ETF is subject to risks associated with the broader equity market, including economic downturns and sector-specific events.
• Climate-related risks: The transition to a low-carbon economy could pose challenges for certain companies within the portfolio.

Who Should Consider Investing:

• Investors seeking exposure to companies aligned with the Paris Agreement goals.
• Investors with a long-term investment horizon and tolerance for moderate volatility.
• Investors looking for a diversified and passively managed climate-focused investment solution.

Fundamental Rating Based on AI:

7.5/10

Based on the analysis of various factors including financial performance, competitive positioning, and market dynamics, CRBN receives a '7.5' rating on our AI-based system. This indicates a strong fundamental profile with potential for future growth.

Resources and Disclaimers:

• Data Sources:
  • State Street Global Advisors website
  • MSCI website
  • ETF.com
  • Yahoo Finance
• Disclaimer:

This analysis is for informational purposes only and should not be considered as investment advice. Please conduct your own research and due diligence before making any investment decisions.