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BetaShares drops Facebook from its ethical ETF

Posted: 23 March 2018 3:56 pm
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BetaShares has removed Facebook from ETHI, which is the largest global ethical ETF traded on the ASX.

BetaShares, an Australian provider of exchange traded funds (ETFs), has today announced it will be removing Facebook from its popular global sustainability leaders ETF. The ETF, called ETHI, tracks an index comprising 100 large global companies that are considered to be ethically responsible investments. ETHI currently has more than $170 million in funds under management, making it the largest global ethical ETF traded on the Australian securities exchange (ASX).

Ethical investing such as the ETHI ETF involves screening companies to avoid those that may produce tobacco or fossil fuels, promote child labour and even companies that have no female representation on their board, among many other things.

BetaShares said that Facebook was originally included in the ETF because of the social media giant's strong global leadership on carbon emission metrics, saying the company was almost 80% better than its competitors. It also has a number of ethical policies including a responsible advertising policy, which deemed it fit for the ETHI index.

However, Facebook has recently been involved in a number of controversial issues which, when added to some other pre-existing factors, has resulted in the company no longer qualifying for the ETHI ETF. This week it was revealed that Facebook had enabled an external data company to access the personal data of more than 50 million Facebook users without those users' consent. The data company then analysed the data of these Facebook users to aid a political campaign.

“As a provider of a true-to-label ethical ETF, we have been careful to ensure there is diligent and ongoing monitoring of the constituents of the fund, to ensure the ETF continues to meet its objectives and those of its investors,” said BetaShares chief executive Alex Vynokur.

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