FAANG traditionally stood for the big six tech companies: Facebook, Amazon, Apple, Netflix and Google (though Google is now Alphabet and Facebook is Meta Platforms). An anti-ESG EFT from Strive Asset Management has a new take on the list. It has launched a FAANG 2.0 product, but none of the tech companies is in it. Rather, the companies are in energy, aerospace, metals and agriculture. The twist is clever and has gotten the kind of press coverage that can attract investors.
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According to CityWire, “Its current largest holdings include the parent company of John Deere, Exxon Mobil, Enphase Energy, and Raytheon Technologies.” This is in keeping with Strive’s philosophy. Its first fund, the Strive U.S. Energy ETF (NYSE: DRLL), has Exxon and Chevron among its largest investments. Energy companies are usual targets of ESG proponents, primarily because of their environmental impact.
Strive has launched exchange-traded funds at a rapid pace. However, it recently delayed the date investors can buy its U.S. Technology ETF. Across all its ETFs, Strive has net assets of about $350 million. One test of the firm’s future is how quickly this can grow and if it can top $1 billion.
Strive has caught the wave of the anti-ESG movement. Companies and many politicians have attacked the premise behind the investment approach. Among other things, there is no single yardstick for ESG rankings. Several research firms, proxy firms and consultancies offer ratings. However, each does not entirely disclose its formula for determining grades, which leaves the system open to criticism.
Several states, led by Florida, have stopped investment of their funds in pro-ESG investment vehicles. This has hurt the revenues of these investment firms.
Strive has gotten more exposure than any ETF firm in recent memory. Now, it needs to turn that exposure into an increase in net assets.
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