Providing investors the opportunity to pursue tax-exempt income with impact (ESG, SDGs, and Climate Action)
NEW YORK–(BUSINESS WIRE)–VanEck today announced the launch of the VanEck HIP Sustainable Muni ETF (CBOE: SMI), the first ETF designed to offer exposure to investment-grade municipal debt securities that focus on sustainability as well as positive social, environmental and economic outcomes or mission accomplishment.
“We’re seeing investor interest in municipal bonds hitting levels not seen since the early 1990s, along with a concurrent increase in focus around sustainable investing approaches, especially in the fixed income marketplace,” said Jim Colby, Portfolio Manager with VanEck. “SMI offers investors a core portfolio tool that hones in on those municipal debt securities that are facilitating projects with sustainable and positive impact. We’re excited to be launching this unique sustainability-focused muni ETF using HIP Investor’s data and ratings, and to be providing a new strategy for those looking for impactful exposure in the tax-exempt fixed-income sleeve of their portfolios.”
Combining Active Management With Data From HIP Investor
SMI combines VanEck’s leadership in municipal bond ETFs with independent research firm HIP Investor’s ratings for 120,000 bonds on “human impact and profit” potential. SMI is an actively managed strategy focusing on investment-grade state and local government debt that funds projects promoting sustainable development, including affordable housing, green spaces and hospitals. Using data from HIP Investor (“HIP”), the portfolio management team integrates four screens to determine a bond’s eligibility for inclusion: climate threat resilience; proximity to opportunity zones, which are typically home to lower-income and racially diverse populations; ESG ratings; and SDGs 9, 11 and 12- the SDGs were adopted by the United Nations General Assembly to achieve sustainable development for all, and the specific goals of SDGs 9, 11 and 12 are as follows: SDG 9 is to “build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation,” SDG 11 is to “make cities and human settlements inclusive, safe, resilient and sustainable,” and SDG 12 is to “ensure sustainable consumption and production patterns.”
“For 15 years, HIP’s analytical rigor has evaluated real-world impacts for investors, advisors and fund managers, enabling more capital to flow to innovators bringing sustainable solutions for people, planet and trust,” said R. Paul Herman, CEO and founder of HIP Investor. “This new ETF enables portfolios to focus on meaningful climate action, increasingly sustainable communities and stronger resilience overall.”
“We believe combining active management with the robust analytical data on sustainability provided by HIP results in a compelling, first-to-market municipal bond ETF. SMI is a welcome addition to our established lineup of seven municipal bond ETFs with currently over $7 billion in combined AUM as of July 31, 2021,” added Colby, who is the portfolio manager of the new strategy.
Years Of Experience
VanEck is a 2017 signatory to the Principles for Responsible Investment (PRI) and has decades of experience in fixed income and municipal bond strategies. SMI also illustrates the expansion of the firm’s sustainable investing offerings, joining last month’s launch of the VanEck Environmental Sustainability Fund (ENVAX), the first green bond ETF, VanEck Green Bond ETF (GRNB) and the VanEck Low Carbon Energy ETF (SMOG). HIP is a 2021 signatory to PRI.
 Source: Morningstar.
VanEck has a history of looking beyond the financial markets to identify trends that are likely to create impactful investment opportunities. We were one of the first U.S. asset managers to offer investors access to international markets. This set the tone for the firm’s drive to identify asset classes and trends – including gold investing in 1968, emerging markets in 1993, and exchange traded funds in 2006 – that subsequently shaped the investment management industry.
Today, VanEck offers active and passive strategies with compelling exposures supported by well-designed investment processes. As of July 31, 2021, VanEck managed approximately $82.1 billion in assets, including mutual funds, ETFs and institutional accounts. The firm’s capabilities range from core investment opportunities to more specialized exposures to enhance portfolio diversification. Our actively managed strategies are fueled by in-depth, bottom-up research and security selection from portfolio managers with direct experience in the sectors and regions in which they invest. Investability, liquidity, diversity, and transparency are key to the experienced decision-making around market and index selection underlying VanEck’s passive strategies.
Since our founding in 1955, putting our clients’ interests first, in all market environments, has been at the heart of the firm’s mission.
About HIP Investor
For the past 15 years, HIP Investor Inc. has served investors, advisors, and fund managers with $7 trillion in AUM to bring ratings, strategies, portfolios, and solutions that seek “human impact and profit (HIP)” since 2006 – years before the terms “impact investing” or ESG were coined. HIP Investor’s Ratings of ESG, SDGs, and Climate Threat Resilience cover multiple asset classes – across 10,000 global equities, 120,000 municipal issuers, 700 real estate investment trusts, 200 sovereigns, as well as venture capital, private equity, private credit, asset backed securities, mortgage-backed securities, and 1000s of mutual funds, ETFs, and separate accounts. As an impact-ratings agency, HIP also rates primary and secondary issuances of corporates and municipalities. As an investment manager, HIP Investor serves investors and advisors of all types, including strategies like the HIP Science-Based Targets for Climate Action, HIP Great Place to Work, HIP Sustainable REITs, and HIP Global Dividends. HIP’s founder and CEO R. Paul Herman authored “The HIP Investor: Make Bigger Profits by Building a Better World,” (Wiley 2010) and co-edited and co-authored “The Global Handbook of Impact Investing: Solving Global Problems Via Smarter Capital Markets Towards a More Sustainable Society,” (Wiley 2021). The VanEck HIP Sustainable Muni ETF is HIP’s first co-branded exchange traded fund.