One Fund for Long Term Investment
HKND
Former Vanguard analyst launched Humankind investment firm on 2019 and this firm launched Humankind US stock ETF on 2021. This firm has $100million in assets.
James Katz is a former Vanguard’s Quantitative equity analyst and Data scientist and he worked in the Vanguard between 2016 to 2018. Later he launched his own firm called Humankind Investment. He is passionate about socially responsible investment and it leads to the start of ESG — environmental, society, and governance ETF named Humankind US Stock ETF on February 2021. The ETF invests in US securities and tracks the top 1000 companies that promote healthier, safer, more equitable, and longer lives. The index weighs on quantitative analysis of the positive and negative contributions to society. The index is measured by its impact on investors, consumers, employees, and citizens. It means that a single dollar represents true value to humankind with respect to social and economic.
‘We developed our Humankind Value score with the belief that traditional investment analysis, with its typically narrow focus on standalone financial performance, fails to fully capture a company’s ability to remain sustainable and competitive in the long run,’ Katz said in a statement.
Why Investing in Humankind US Stock ETF make sense?
Before diving into my thoughts, it is purely my speculation, kindly do your due diligence before investing in this fund.
Disclaimer: There is no assurance that the Fund will achieve its investment objective, and you can lose money investing in this Fund. Shares of the Fund are not bank deposits and are not guaranteed or insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency.
I happened to notice the HKND ad on one of the social media, it attracts me because of the name and I am a huge fan of ETF ( Lazy Portfolio Manager).
First of all, HKND calculates its value based on four categories of value. Investor value, Consumer value, Employee value, and Societal value. Each company receives their single dollar based on investor’s profit made over several years (Multi-year profitability), product and service offering to their consumers, employee’s bonuses, benefits & salaries, and external unaccounted operation costs. I am pretty impressed with three factors influencing the ETF’s index i.e. Investor, Consumer, and Employees value. Their index methodology is the same as layman’s aspects of a job to look for in a company. It fits into my asset allocation perfectly because of the similarity that I have with the fund. So, truly it is my kind, and I hope if everyone agrees then it will be humankind too.
A second reason to become an investor to this fund, I want to pass over these values to my kids to show them how the company's growth influenced by these four categories. This fund growth will help us to frame our kids’ careers based on the value of a company. If you look at their top 10 holdings out of 1000 equities, Class A share (GOOGL) has 4.53% of weightage with the first position, Microsoft (MSFT) has 4.35% weightage with the second position, VERIZON COMMUNIC(VZ) has 3.71% and Apple(AAPL) has 3.30% with third position and fourth position. It shows clearly that technology leading the world with its innovation along with its value. Surprisingly, the fifth and sixth positions taken by Corteva Inc (CTVA), and DEERE & CO (DE) are American Agricultural chemical & seed and manufacturing industries. Out of the last four positions, three positions are taken over by the Health care industry (PFIZER INC: PFE, JOHNSON&JOHNSON: JNJ, and HCA HEALTHCARE I: HCA).
The third factor is Diversification, 28.37% of total net assets as of 06/23/2021 is composed of Technology, Agricultural, and Healthcare industries. This one fund has promising equity sector diversification with three different industries.
Where Humankind US Stock ETF fits?
The inception date of HKND is 02/24/2021 with net assets of $74.79m. HKND expense ratio falls under good expense ratio (0.5% to 0.75% for an actively managed portfolio) which is 0.11%.
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. You would incur these hypothetical expenses whether or not you were to sell your shares at the end of the given period. You may pay brokerage commissions on your purchases and sales of the Fund’s shares, which are not reflected in the Example. Although your actual costs may be higher or lower, based on these assumptions your costs would be: 1 Year $11 and 3 Years $35
Considering the above parameter, this new fund in the market fits into the most aggressive mutual fund with double the risk because of the pioneering concept and brand new. It is too early to calculate the HKND performance with 3 months of data. As of now, this fund allocates into longer-term brokerage account like the Custodian account or Retirement account. In my opinion, I will pass on this asset to my kid, so it fits more into the Custodian account.
In final words, ESG ETFs are increasingly attracting investor interest. According to data from FactSet, investors allocated a record $27.4 billion into US-listed ETFs that focus on ESG practices in 2020.
“We developed our Humankind Value score with the belief that traditional investment analysis, with its typically narrow focus on standalone financial performance, fails to fully capture a company’s ability to remain sustainable and competitive in the long run,” added Katz. “By concentrating our investments in the companies that maximize value across a wider range of key stakeholders and thematic issues, we aim to promote the best possible outcomes for people as both investors and as human beings.”
