The Veridian Climate Action ETF targets companies that mitigate climate change


Veridian Climate Action ETF (NYSE Arca: CLIA) Trading has begun on the New York Stock Exchange. The fund targets companies that have technologies and business models that contribute to climate change mitigation.

CLIA will typically invest at least 80% of its net assets in companies that are making a significant contribution to mitigating climate change. The Fund is actively managed.

Ariane Mahler, CEO and CIO of fund issuer Veridian Global Investors, said: impactalpha that CLIA will include names in construction, waste management, agriculture and forestry, as well as transportation and energy that “have as their main focus the reduction of greenhouse gas emissions.”

Mahler said, “Net zero is going to get us nowhere.” “You need negative emissions, not just net zero.”

5-Step Process

As issuer and sub-advisor, Veridian uses a five-step process to shortlist and select companies. From an initial universe of 10,000 candidates, Veridian targeted companies engaged in a business activity that contributes to mitigating climate change.

Then, the sub-advisor assesses the financial condition of each company that passes Phase 1 to determine how much of its revenue, capital expenditures and operating expenses contribute to mitigating climate change. Next, Veridian analyzes each remaining candidate based on a variety of qualitative and financial metrics.

For companies that have passed the preliminary stages, Veridian engages in an in-depth analysis of the potential target company. From this, it derives a risk-adjusted target price using proprietary valuation analysis.

See more: “New Extractors Climate Action ETF Launches With $2 Billion,

Finally, CLIA’s portfolio will consist of companies with risk-adjusted target prices significantly higher than their prices at the time of investment.

The fund’s portfolio will typically be between 35 and 50 companies. The fund’s holdings of micro-cap stocks will typically represent less than 10% of the portfolio.

Veridian will continually evaluate CLIA’s portfolio. It will adjust the respective weightings of the companies in the portfolio based on the difference between the market price and the risk-adjusted target price.

CLIA’s expense ratio is 0.85%.

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