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At one year VEGN ETF stands strong as a trailblazer of ethics in investing

Monday, September 14, 2020
Opalesque Industry Update - One year ago, Beyond Investing allowed animal advocates and environmentalists to put their money where their mouth is, by launching the world's first cruelty-free and climate-conscious Exchange Traded Fund, the US Vegan Climate ETF (ticker: VEGN), on the New York Stock Exchange.

Seen initially as being a viable investment option for vegans and empaths, in the last year, VEGN's performance has shown that investing for a kinder, cleaner, healthier world can be a sensible financial choice for many investors.

Since inception, VEGN has returned 27.69% total return on market price against the S&P500 Index's 19.75% through to end August 2020. Performance was particularly strong in August, when the ETF outstripped the S&P500 Index by 2.12% on the same basis.

2020 has been a challenging year for many. Between unethical agricultural practices resulting in the Australian Bush burning for 210 days and the inhumane wildlife wet markets that produced COVID 19, ethics, climate, and sustainability have been pushed to the forefront of investor consciousness. Since its conception, Beyond Investing has always avoided companies involved in unethical practices towards animals, people, and the planet. Its stringent screening process weeds out animal exploitation, child labor, high carbon intensity, the burning or extraction of fossil fuels, single-use plastics, and any other activity deemed to have a significant negative impact on the environment.

The global response to the pandemic has shown that people can modify their behaviors and rates of consumption, if they have to. According to the UN, there has been a 6% drop in greenhouse gas emissions in 2020 due to travel bans. Against forecasts by the International Energy Agency's (IEA) of an increase in global demand for oil in 2020, they have now reported a decline of 90,000 barrels of oil per day. NASA reports a dramatic decrease in the pollutant Nitrogen Dioxide in first quarter 2020, versus first quarter 2019. Robert Kunzig, Senior Environment Editor at National Geographic, spoke on the data. "This does show us what's possible… I just hope it motivates us to start adopting some of the more sustainable solutions."

Similarly, demand for meat and dairy products has declined for the first time in nine years. Leaving aside thedocumented links between environmental destruction, animal exploitation, and the emergence of COVID-19, slaughterhouse stoppages because of high worker infection rates, resulting in on-farm killing and disposal of animals, have been Public Relations disasters for the industry. Conversely, sales of plant-based products have been booming.

Against this backdrop, the screening rules imposed by the Beyond Investing US Vegan Climate Index (VEGAN) steered the VEGN portfolio away from some of the sectors worst impacted by COVID-19.

Attribution produced by the company shows that avoiding animal exploitation delivered 31% of the outperformance, excluding the production, burning and financing of fossil fuel and other environmental damage provided 49% and the remaining 19% came from avoiding companies involved in weapons manufacture.

Its proactive selection of midcap company replacements using strict ethical criteria also may orientate the portfolio towards the industries of the future.

The VEGN ETF tracks the Beyond Investing US Vegan Climate Index (VEGAN). VEGAN is a passively managed, rules-based index of U.S. large cap stocks, screened according to vegan and climate-conscious principles.

As its focus is firmly on avoiding the most damaging companies to the environment, VEGAN has always had a lower carbon, waste, and water footprint per unit of revenue than the S&P 500, and many other ESG indexes.

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