RAFE Profile
The PIMCO RAFI ESG U.S. ETF is designed to deliver investment results that closely correspond to the performance of the RAFI ESG US Index. Under normal market conditions, the fund commits at least 80% of its total assets to securities included in this index. The RAFI ESG US Index, crafted by RAFI Indices, LLC, utilizes a systematic, rules-based approach to select and weight U.S. equities based on a comprehensive environmental, social, and governance (ESG) framework.
The index emphasizes an integrated ESG strategy, which prioritizes companies that score highly across various ESG criteria. This approach involves identifying firms with strong sustainability practices, ethical governance structures, and positive social impacts. In contrast, the index systematically excludes companies with substantial involvement in controversial industries, including tobacco, gambling, weapons, and fossil fuels. This exclusionary criterion ensures that the ETF's holdings align with responsible investing principles and ethical considerations.
The fund’s investment process is anchored in a detailed ESG evaluation that assesses companies on a range of environmental and social factors, as well as governance practices. By focusing on firms that exhibit high ESG ratings, the ETF aims to capture potential value and mitigate risks associated with poor ESG practices. This strategic focus aligns with a growing trend among investors seeking to integrate ESG factors into their investment decisions to promote sustainable and socially responsible business practices.
The PIMCO RAFI ESG U.S. ETF offers investors a pathway to align their portfolios with ESG values while maintaining exposure to a broad spectrum of U.S. equities. Its adherence to the RAFI ESG US Index’s methodology provides a disciplined and objective approach to selecting investments that meet rigorous ESG standards, aiming to deliver both financial performance and ethical alignment. The fund’s strategy reflects a commitment to sustainable investing by focusing on companies that contribute positively to environmental and social outcomes.
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