Investing with Purpose: The Rise of Mission-Driven Active ETFs

The Element EV, Solar & Battery Materials (Lithium, Nickel, Copper, Cobalt) Futures Strategy ETF (CHRG) is an actively-managed commodity futures fund providing investors with exposure to the raw ingredients behind the renewable energy revolution. With global demand expected to outpace supply, new investment will be necessary to drive adoption.

Currently, the fund offers futures-based exposure to copper (52%), lithium (29%), nickel (15%), and cobalt (4%). With a 0.95% expense ratio, the fund offers an easy way for mission-driven investors to diversify their portfolios with commodities, capitalize on compelling supply-demand economics, and support the renewables revolution.

The Subversive Mental Health ETF (SANE) is an actively-managed fund investing in a portfolio of publicly-traded equities intersecting at least one area of mental health, including metabolic devices, fitness, sleep, and nutrition. As a result, mission-driven investors can participate in companies seeking to address the mental health crisis.

The fund managers employ a top-down approach using quantitative factors to find mental health-focused companies that are cash flow positive. During the selection process, managers assign greater weight to companies whose primary business models and growth prospects support mental health and fitness.

Some of the fund’s top holdings include:
 

• Merck & Co., Inc. (4.93%)
• Medtronic plc (4.38%)
• Biogen Inc. (4.35%)
• Eli Lilly & Co. (4.24%)
• Alkermes plc (4.21%)

The Subversive Food Security ETF (KCAL) is an actively-managed fund providing exposure to companies involved with producing, distributing, and delivering food or companies that invest in technology and tools to support legal food security. As a result, mission-driven investors can participate in solving the food crisis.

The fund managers use a similar selection process to the previous ETF (the same firm manages them). However, they also factor in global macroeconomic events that affect the global food supply chain, such as the invasion of Ukraine and the long-term effects of climate change on food production, to help manage inflationary shocks.

Some of the fund’s top holdings include:
 

• Mosaic Co. (5.43%)
• Intrepid Potash Inc. (5.30%)
• Yara International (4.70%)
• CF Industries Holdings Inc. (4.67%)
• K+S Ag (4.65%)

Mission-driven ETFs have become increasingly popular as investors look beyond exclusionary ESG criteria to better align their portfolios with their values. When looking for additions to their portfolios, investors should carefully consider the portfolio make-up and the ETF’s expense ratio, liquidity, and other factors to mitigate risk.

Take a look at our recently launched Model Portfolios to see how you can rebalance your portfolio.