Wealth Management

According to an analysis by ESG specialist Elisabeth Steyn, U.S. equity funds that are classified as ESG, have on average 29% of their holdings in tech stocks. Steyn told Alice Ross of Financial Times that the figure is well above the 23% average for general equity funds. Ross used the iShares ESG Aware MSCI USA ETF as an example. The fund’s top holdings include Apple, Microsoft, Amazon, Tesla, and Alphabet. This may help explain why many ESG funds are seeing heavy losses this year. Ross attributed the reason to two factors. First, ESG funds are exclusionary. Once certain areas of the market are stripped out, tech is typically over -represented. The second reason is that ESG rating agencies can differ greatly on which companies are sustainable. That reason alone can help explain why the SEC is going after ESG labeling. Ross also noted that ESG funds outside the U.S. are not typically overweight in tech stocks.


Finsum:U.SESG funds are heavily overweight in tech stocks due to differing ESG labels and exclusionary factors.

Ethic, which is an ESG investing fintech that offers direct indexing to investment advisors, has raised $50m in a Series C funding round. Ethic is available to advisors that use the custody services of Fidelity, Charles Schwab, U.S. Bank, Northern Trust, Morgan Stanley, or Pershing. The company offers custom direct indexing portfolios that reflect a client’s values, financial goals, and tax preferences. The firm also offers impact reporting and educational materials. The asset manager, which focuses on socially responsible portfolios, currently has over $2 billion in assets. The latest funding round was led by Jordan Park Group. Other firms involved in the funding round include UBS’s venture arm, UBS Next, and existing investors such as Oak HC/FT, Nyca Partners, Sound Ventures, Urban Innovation Fund, and Kapor Capital. In an announcement, the firm stated that the new capital will “support Ethic’s ambitious growth plans, including expansion into new markets and products, and continued investments in its platform experience.”


Finsum:Direct indexing firm Ethic raised $50 million in a new funding round to expand into new markets and products.

A new insurance company plans on selling non-variable annuities directly to consumers. Former Global Bankers Insurance Group executives teamed up to start Pillar Life by forming Pillar Insurance LLC and using the entity to acquire Continental Life Insurance Company. Pillar Insurance renamed Continental Life to Pillar Life last year. The company plans on building a web-based self-service process by April 2023. The insurer has already posted guides to multi-year guaranteed annuity contracts and single-premium immediate annuities on its website. The Interstate Insurance Compact, which is an organization that helps states review product and rate filings, has approved Pillar Life forms for an SPIA contract and a single-premium deferred annuity contract. Pillar Life will also offer life insurance and supplemental health insurance products. For clients, this means they will have more ways to buy annuities on their own. For advisors, however, it will likely make it more difficult to go through the paperwork to find out what clients own.


Finsum:Pillar Life plans on offering non-variable annuities direct to consumers through a web-based self-service model.

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