NEW YORK, October 31, 2016 – OppenheimerFunds, a leading global asset manager, is expanding its Beta Solutions client offerings into the environmental, social and governance (ESG) space. The firm launched Oppenheimer ESG Revenue ETF, which focuses on U.S. large-cap equities with highly rated ESG practices, and Oppenheimer Global ESG Revenue ETF, which focuses on global large- and mid-cap equities with highly rated ESG practices. These ESG offerings will broaden the firm’s existing investment platform, which includes equity, fixed-income, alternative and multi-asset solutions, as well as revenue-weighted ETF strategies.
“Our new ESG ETF strategies are an exciting addition to our suite of innovative investment solutions that meet the evolving needs of our clients,” said Art Steinmetz, Chairman and CEO of OppenheimerFunds. “We are pleased to offer investors efficient market exposure to companies with very strong environmental, social and governance practices.”
To evaluate companies for their ESG standards, OppenheimerFunds partnered with Sustainalytics, an award-winning global research firm that specializes in ESG research and analysis, and MSCI ESG Ratings, an internationally renowned group within MSCI specializing in ESG research and analysis. The securities in both funds are weighted by top line revenue, as opposed to market capitalization, which OppenheimerFunds views as a more accurate measure of a company’s value.
- Oppenheimer ESG Revenue ETF seeks to outperform the S&P 500 Index through a portfolio of revenue-weighted U.S. large cap companies with favorable ESG practices, based on Sustainalytics’ proprietary ESG scores, and OFI’s proprietary revenue-weighting methodology.
- Oppenheimer Global ESG Revenue ETF seeks to outperform the MSCI All Country World Index through a portfolio of revenue-weighted global large- and mid-cap equities companies with strong ESG practices and ranked by their Sharpe ratio, or how much return they’ve generated per unit of measurable risk.
“Clients are increasingly seeking access to efficient global equity exposure and companies with strong ESG practices,” said John McDonough, Head of Distribution, OppenheimerFunds. “Our ESG Revenue ETFs can offer investors a unique combination of benefits including exposure to great companies with exceptional business practices, an investment experience with attractive risk-reward characteristics, as well as alignment to their financial goals and personal values.”
In December 2015, OppenheimerFunds expanded its product offering into the fast-growing smart beta industry with the acquisition of VTL Associates, LLC, formerly RevenueShares, founded by Vince Lowry. Lowry is now the Lead Portfolio Manager for Revenue Weighted Strategies. The Revenue Weighted team reports to Sharon French, Head of Beta Solutions for OppenheimerFunds.
Additionally, to support this strategically critical element of the franchise, Michael Eschmann joined OppenheimerFunds earlier this year as Head of Capital Markets, Beta Solutions, reporting to French. Eschmann manages relationships with market makers, liquidity providers, and authorized participants in an effort to enhance the shareholder experience. Eschmann previously spent 10 years as Managing Director of Capital Markets & Institutional Sales at Direxion Investments, and prior to that seven years as part of the Institutional team at Merrill Lynch.
The suite of Oppenheimer Factor Weighted ETFs includes:
- Oppenheimer Large Cap Revenue ETF *
- Oppenheimer Mid Cap Revenue ETF *
- Oppenheimer Small Cap Revenue ETF *
- Oppenheimer Ultra Dividend Revenue ETF *
- Oppenheimer Global Growth Revenue ETF *
- Oppenheimer Financials Sector Revenue ETF
- NEW: Oppenheimer ESG Revenue ETF
- NEW: Oppenheimer Global ESG Revenue ETF
* To further enhance the value proposition for clients, OppenheimerFunds has reduced the contractual management fees for five of the existing Revenue Weighted ETFs.
“I’m thrilled at the progress we’ve already made towards growing the firm’s smart beta business and building on the success of Oppenheimer Revenue Weighted ETFs,” said French. “As the first true strategic beta offerings that integrate both ESG scores and a proven, proprietary revenue-weighting methodology, the Oppenheimer ESG Revenue ETF and the Oppenheimer Global ESG Revenue ETF will build on the strength of our visionary team and help us to better meet the needs of our clients.”
Sharpe Ratio: A risk-adjusted measure that measures reward per unit of risk. The higher the Sharpe Ratio, the better. The numerator is the difference between the portfolio’s annualized return and the annualized return of a risk-free instrument. The denominator is the portfolio’s annualized standard deviation (population).
An investment in the Fund is subject to investment risk, including the possible loss of principal amount invested. Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes, regulatory and geopolitical risks. The stocks of companies with favorable ESG practices may underperform the stock market as a whole. Fund returns may not match the return of its respective index, known as non-correlation risk, due to operating expenses incurred by the Fund. The alternate weighting approach employed by the Fund (i.e., using revenues as a weighting measure), while designed to enhance potential returns, may not produce the desired results. Because the Fund is rebalanced quarterly, portfolio turnover may exceed 100%. The greater the portfolio turnover, the greater the transaction costs, which could have an adverse effect on Fund performance.