Values-based ETFs play an intriguing role in the growing ETF landscape. For investors who want their portfolios to reflect their worldview or personal values, ETFs can make a great vehicle. With their transparency and flexibility, ETFs can act as tools to toggle on or off certain exposures, avoiding problem companies or leaning into others, or as a vehicle to advocate for your values. TOV, the recently launched Jewish values ETF, presents one notable example.
TOV (the Hebrew word for “good”), the JLens 500 Jewish Advocacy U.S. ETF charges an 18-basis-point fee. Launched in February this year, the fund allows investors to express their support for Jewish values. The fund’s subadvisor engages in shareholder advocacy in the name of those values through dialogue with companies, voting proxies, and filing shareholder proposals.
Specifically, the ETF identifies a few key Jewish values pillars upon which it evaluates large cap U.S. firms to inform shareholder advocacy. Those pillars, inspired by Judaism’s framework of “mitzvot”-obligations — include the following three main categories.
TOV's Jewish Values Pillars
First, the fund considers a firm’s efforts in combating antisemitism or hate, tied to the value of Rodef Shalom, or “pursuing peace.” The fund also assesses companies for their support of Israel, also known as Shmirat Yisrael. Finally, it also measures firms by their efforts to repair the world, also known as Tikkun Olam. Within Tikkun Olam are subcategories focused on environmental and labor concerns, as well.
The above factors contribute to an overall score that impacts the weight of firms the ETF holds. After market cap-weighting, firms scored as “Excellent” (Metzuyan) are overweighted by 1.03. Firms scored as “Needs Improvement” (Tzarich Tikkun) are underweighted by 0.97. The rest, falling in the middle category, are weighted at 1.
Furthermore, the Jewish values ETF excludes some firms that receive significant revenue from “Treif” activities, which are not aligned with Jewish values. That includes activities like oil sands and thermal coal production, tobacco, and for-profit prisons.
Together, the Jewish values ETF can help investors express their beliefs and support Jewish shareholder advocacy in the investing world. Whether prioritizing Rodef Shalom, Shmirat Yisrael, or Tikkun Olam, the fund could appeal to those investors who want to voice their support for Jewish values.
For more news, information, and analysis, visit the Faith Based Investing Channel.
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