ETF NEWS - ULTUMUS

Inspire drops ESG

Written by Bernie Thurston | 24 August 2022

Inspire changes ESG ETF names, blames “liberal activism” 

 

Inspire ETFs, a Christian specialist ETF provider based in Idaho, has changed the names of its ETFs, removing the term “ESG” from all the fund names. The changes are only affect the names of the funds. The investment strategies and portfolio management are staying the same.  

 

Explaining their decision, Robert Netzly, chief executive of Inspire, said: 

 

“We wanted to see a “two party system” in the ESG community, where biblical values could provide counterpressure on the overwhelming progressive-left dominance in the space.  

 

“We knew at the time that our conservative, biblical investment strategies…put us squarely in the minority among ESG asset managers. 

 

“We have been ridiculed by the liberal media, antagonized at ESG industry events, blocked from databases of ESG investment options, and received countless agitated emails and phone calls. It seems the liberal ESG elitists are incredulous that “people like us” would have the audacity to show up at their party.” 

 

Bernie’s commentary – US two party system Manichean  

 

US politics looks too much like a Disney movie these days. One side is always evil and dark. The other good and of the light. There’s only two sides to an argument.  

 

The Manicheanism, in my opinion, owes to the US two party system. There’s only Republicans and Democrats in US politics, only confederates and unionists. There’s no third or fourth party like we have in the UK with the Liberal Democrats, SNP, Plaid Cymru, etc. This binary politics is now spilling over into the ETF industry. 

 

On a product level, from what I can tell, the AUM in Inspire’s eight ETFs mostly derives from a small number of clients. One presumes these main clients would have been consulted on the renaming. Looking at the index, Inspire’s ESG screens aren’t really that different to other more mainstream ESG ETFs. They exclude porn, tobacco, and gambling – much the same. They just add abortion and the “LGBT lifestyle”. 

 

Aside the name change, I do wonder where Inspire plans to get its assets from going forward. My understanding of Church investing - religious denominations often have huge assets, which are professionally managed - is that they mostly use separately managed accounts rather than ETFs. Religious groups are usually long-term investors with no real need for the exchange traded functionality ETFs provide. They also have very bespoke needs, meaning they don't usually fit with cookie cutter indexes. SMAs also give more visibility and control. So big churches won't need ETFs like these.