SPDR MSCI USA Climate Paris Aligned ETF (NZUS)

ETF SPDR MSCI USA Climate Paris Aligned ETF (CLPX)

Profile: CLPX is a US equity ETF that tracks the MSCI USA Climate Paris Aligned Index. This index consists of large and mid-cap US companies with lower carbon emissions and better climate-related business practices than their peers. CLPX seeks to provide broad exposure to the US equity market with a focus on sustainability and climate awareness.

Objective: CLPX aims to track the performance of the underlying index, offering investors a convenient and cost-effective way to access a portfolio of US companies aligned with the Paris Agreement's climate goals.

Issuer: State Street Global Advisors (SSGA), a renowned asset management company with over $4.22 trillion in assets under management as of June 30, 2023. SSGA boasts a solid track record and enjoys a high reputation for reliability in the market.

Market Share: CLPX holds a market share of 1.83% within its sector of ESG (environmental, social, and governance) ETFs, ranking 32nd based on total net assets as of October 27, 2023.

Total Net Assets: As of October 27, 2023, CLPX's total net assets amount to $407 million.

Moat: CLPX's competitive edge lies in its unique focus on climate-conscious US companies. This approach caters to a growing investor demand for sustainable investment solutions while providing exposure to a diversified portfolio of established US corporations. Additionally, SSGA's reputation and experience contribute to CLPX's competitive strength.

Financial Performance: Since inception in March 2022, CLPX has delivered a total return of 12.61%. Its performance closely tracks the MSCI USA Climate Paris Aligned Index, with an annualized return of 12.06% over the same period.

Growth Trajectory: The global ESG investing landscape is rapidly expanding, with increasing demand for sustainable investment options. CLPX is well-positioned to benefit from this trend as investors seek exposure to climate-aligned US equities.

Liquidity: CLPX's average daily trading volume is approximately 50,000 shares, indicating moderate liquidity. Its average bid-ask spread stands at 0.03%, suggesting low transaction costs.

Market Dynamics: Key market factors influencing CLPX include:

• Economic indicators: Strong economic performance typically benefits broad equity markets, including CLPX's underlying holdings.
• ESG investing trends: Growing investor demand for sustainable investments drives demand for CLPX and similar ESG ETFs.
• Climate-related regulations: Policy decisions focusing on carbon reduction and climate change mitigation could positively impact companies within CLPX's portfolio.

Competitors: CLPX's key competitors within the ESG ETF sector include:

• iShares ESG Aware MSCI USA ETF (ESGU): 2.84% market share
• SPDR S&P 500 ESG ETF (EFIV): 2.24% market share
• Vanguard ESG U.S. Stock ETF (ESGV): 1.99% market share

Expense Ratio: The fund's expense ratio is 0.15%, which is relatively low compared to other ESG ETFs.

Investment Approach and Strategy: CLPX employs a passive management strategy, tracking the MSCI USA Climate Paris Aligned Index. The fund's portfolio comprises stocks of US companies with lower carbon emissions and strong climate-related profiles, offering investors broad exposure to the index's constituents.

Key Points:

• Invests in climate-conscious US companies aligned with the Paris Agreement.
• Seeks to track the MSCI USA Climate Paris Aligned Index.
• Managed by State Street Global Advisors, a reputable and established asset manager.
• Offers moderate liquidity with a low expense ratio.

Risks:

• Market volatility risk: CLPX's performance is influenced by overall market fluctuations.
• Sector-specific risk: Its focus on climate-conscious businesses could be susceptible to sector-specific events or trends.
• ESG data limitations: The use of ESG data for company evaluation may involve inherent uncertainties and potential limitations.

Who Should Consider Investing:

• Investors seeking exposure to US equities while aligning their portfolio with climate-conscious investing principles.
• Individuals with long-term investment horizons who believe in the growth potential of sustainable businesses.
• Investors who prefer a passive management style and index-based diversification.

Fundamental Rating Based on AI: 7.5/10

Justification: CLPX demonstrates strong fundamentals, supported by its alignment with a growing ESG investment trend, a reputable issuer in State Street Global Advisors, and competitive fees. The fund's moderate liquidity and sector-specific focus deserve consideration when assessing its suitability for individual investors. Overall, CLPX presents an attractive option for those seeking a sustainable and climate-aware approach to US equity investments.

Resources and Disclaimers:

• State Street Global Advisors: https://www.ssga.com/us/en/individual/etfs/etf-detail?ticker=clpx
• MSCI: https://www.msci.com/documents/1296146/17464700/usa-climate-paris-aligned-index+methodology+nov2022.pdf/92435008-b8a0-d220-c99f-6473641162b3

Disclaimer: This information is for educational purposes only and should not be construed as financial advice. Please conduct your own research and consider consulting with a qualified financial professional before making any investment decisions.