A sound investment process and strong management team underpin SPDR® MSCI ACWI Climate Paris AlignedETF's Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's effective investment philosophy supports a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in volatility exposure and liquidity exposure compared with category peers. High volatility exposure is attributed to companies with a higher standard deviation of returns. And a high liquidity exposure is rooted in stocks with higher trading volumes, lending managers more flexibility. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Microsoft

Apple

NVIDIA

Amazon

Alphabet

Eli Lilly

Broadcom

JPMorgan Chase & Co

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. SPDR® MSCI ACWI Climate Paris AlignedETF earns a High Process Pillar rating. The largest contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. 

The investment strategy as stated in the fund's prospectus is:  The investment seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the MSCI ACWI Climate Paris Aligned Index.  The fund generally invests substantially all, but at least 80%, and of its total assets in the securities comprising the index. The index is designed to exceed the minimum standards for a “Paris-Aligned Benchmark” under the EU BMR. A Paris-Aligned Benchmark is designed to align with a principal objective of the Paris Agreement to limit the increase in the global average temperature to well below 2 degrees Celsius above pre‑industrial levels. 

 The portfolio is overweight in technology and financial services relative to the category average by 6.5 and 2.6 percentage points, respectively. The sectors with low exposure compared to category peers are energy and consumer defensive, underweight the average by 4.7 and 4.3 percentage points of assets, respectively. The strategy owns 902 securities and is diversified among those holdings. In its most recent portfolio, 21.3% of the fund’s assets were concentrated in the top 10 fund holdings, as opposed to the category average's 25.2%. And finally, in terms of portfolio turnover, on a year-over-year basis, 12% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

High

Process

State Street’s team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are two managers listed on the fund: Karl Schneider, Thomas Coleman. Experience on the team is abundant, with 23 years of average portfolio management experience. Together, they manage a total of three strategies, with a Silver asset-weighted average Morningstar Medalist Rating, demonstrating their potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

People

State Street Global Advisors is under new leadership but continues to move along the positive trajectory established by former leaders. SSGA maintains its Above Average Parent Pillar rating.
Cyrus Taraporevala, who oversaw much of SSGA’s recent transformation, retired from the CEO position in December 2022 and passed the baton to his successor, Yie-Hsin Hung. She inherited a business that’s become more disciplined with its fund lineup. Fees have come down, while product development remains focused on fixed-income and sustainability funds, and many of SSGA’s launches have echoed that intention.
The seeds that SSGA planted over the past several years have been bearing fruit. It built out a low-cost series of portfolio building-block ETFs in the U.S. bearing the “SPDR Portfolio” branding. SSGA launched these later than its industry rivals, so they aren’t as large. But they’re competitive, with solid management and low fees, which helped them consistently take in new money over the past several years.
SSGA continued to overhaul its ETF business in Europe with most of its recent fixed-income and sustainability fund launches. Many of these funds track indexes and charge relatively low fees. With operations in the U.S. and Europe standing on a firm foundation, SSGA will put more focus on its Asia-Pacific business—the smallest regional segment of its business.

Parent

SPDR MSCI ACWI Climate Paris A

NZAC tracks a tier-weighted index of large- and mid-cap global stocks selected and weighted based on ESG criteria that are compatible with the Paris Climate Agreement and carbon reduction goals.

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Renewable energy stocks have experienced a significant decline in recent months, lagging behind fossil fuel companies. This decline is primarily attributed to the impact of higher interest rates on the sector.

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SPDR MSCI USA Climate Paris Aligned ETF

It's reasonable to expect that in 2023, climate-driven and sustainability-focused investment strategies, including exchange traded funds, will receive plenty of attention.

Flexibility, Versatility Essential in Climate Change Investing

Investors have long been gravitating to the benefits of environmental, social, and governance (ESG) principals, and more companies are making ESG a top priority. While those encouraging factors, there's still ample ESG risk that needs to be addressed.

ESG Risks Point to Opportunity with Climate ETFs

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Strive Asset Management was the most noticeable newcomer to file for ETFs, while Putnam and T. Rowe Price plan to add to their relatively new lineups.

Newcomers & Industry Stalwarts Among Recent ETF Filers

From a broad perspective, low-carbon investing remains attractive. That's even more true today as growth stocks — the area in which many low-carbon equities dwell — are retreating this year.

Private Low-Carbon Investing Still Intersecting With Public Policy

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As the market enters bear country, many sustainable fund investors are bearing the brunt of this downturn. But at Morningstar, Jon Hale, director of sustainability research for the Americas at Sustainalytics, notes that investors should stay the course with sustainable investing.

Message to ESG Investors: Hold Steady

Investors continue to pump money into ESG-themed funds even after the market faced its worst slump since 1970. Bloomberg is reporting that investors last week put more than $1.2 billion into ESG-focused ETFs.

ESG Funds Rake in Capital — But for How Long?

There are plenty of exchange traded funds on the market today advertising environmental, social, and governance (ESG) credentials, but not all members of that group are adequately levered to the low-carbon transition. One that escapes this shortcoming is the newly minted SPDR MSCI USA Climate Paris Aligned ETF (NZUS).

NZUS Timely as Low-Carbon Transition Gains Momentum

State Street Global Advisors today introduced two SPDR MSCI Climate Paris Aligned ETFs designed to help investors meet their climate objectives. The SPDR MSCI USA Climate Paris Aligned ETF (NZUS) and the SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC) track the MSCI USA Climate Paris Aligned and MSCI ACWI Climate Paris Aligned Indexes, respectively, and are designed to support investors interested in addressing [.

News for SPDR MSCI ACWI Climate Paris A ETF (NZAC)