Forget ESG, There’s Now A “Betting, Alcohol, & Drugs” ETF

Finally had enough of all the crowing about the magic and wonder of ESG exchange traded funds? We might have an ETF for you.

Listed Funds Trust is introducing an ETF called the “B.A.D.” ETF, which stands for “betting, alcohol and drugs”. The fund is going to track an index of betting, alcohol and drugs companies, according to Bloomberg, who cited a regulatory filing. 

The index was created by Thematic Investments LLC and includes equities, as well as American Depositary Receipts and Global Depositary Receipts from developed and emerging markets, the report says. It’ll be made up of casinos, gaming companies, alcohol and cannabis companies and companies that develop pharmaceutical products.

The fund will have a relatively lofty expense ratio of 0.75%. 

The ETF will be a nice respite for investors who have grown tired of the ESG charade. Recall, for example, we recently pointed out that funds are now simply rebranding as ESG-focused and watching inflows pour in.

 

“You have big fund companies with an inventory of funds, a lot of which aren’t really attracting assets anymore, saying ‘OK, here’s this new investment trend happening; what do we do,'” said Morningstar Head of Sustainability Research Jon Hale. 

35 of 64 rebranded funds since 2013 “were suffering from investor withdrawals in the three years before they went green”. Once the rebranding was complete, 13 funds saw investors put cash back into the funds. 

Meanwhile, funds like the USAA Sustainable World Fund holds more than $100 million worth of 47 fossil fuel companies. The Sustainable World Fund holds shares of mining companies like Rio Tinto, the report noted.

Mannik S. Dhillon, president of VictoryShares & Solutions, an investment adviser for USAA, told the WSJ:  “We believe incorporating ESG considerations into a portfolio should be an input under a larger mosaic of considerations any manager evaluates to achieve a well-balanced, diversified portfolio.”

The American Century Investment’s Fundamental Equity Fund was also seeing outflows for years before it rebranded in 2016. Since then, it has brought in $1.7 billion. 

For those looking to “stick it to the man” with Listed Funds Trust’s new ETF, the B.A.D. fund doesn’t have a ticker symbol yet. Might we suggest “F-ESG”?