ESG gold miners ETF continues to lower its ESG risk score following latest rebalance

On 30th September, AuAg Gold Mining UCITS ETF (ESGO) started it quarterly rebalancing process.

• AuAg ESG Gold Mining UCITS ETF (ESGO) has completed its latest rebalance, further bringing down its average ESG risk score.
• African Rainbow Minerals was added to the index while Seabridge Gold was removed.
• The ETF is rebalanced every quarter and provides exposure to the 25 best-in-class miners regarding ESG risk scores.
• The data is provided by the world-leading sustainability data provider, Sustainalytics.

The rebalance was fully completed on 6th October. The index saw African Rainbow Minerals, with an ESG Risk Rating of 30.42, added to the index. Seabridge Gold, with an ESG Risk Rating of 30.98, was excluded from the index. The rebalance saw the average ESG Risk Score of the fund fall to 23.89, lower than had previously been (a lower score is better). This marked a continuation of the ETF’s average ESG Risk Score falling with each rebalance.

ESGO seeks to offer exposure to an equal-weighted basket of 25 ESG screened companies that are active in the gold mining industry. The gold mining ETF tracks the Solactive AuAg ESG Gold Mining Index which focuses on companies that have low ESG risk characteristics. The fund uses Sustainalytics to screen the mining universe for their ESG credentials, attributing a risk score based on their findings. Only the top 25 lowest ESG Risk companies are included within the index.

Eric Strand, founder of AuAg ESG Gold Mining UCITS ETF (ESGO) commented: “The latest rebalance has seen average ESG score fall again - a lower score is better. The average score has fallen every rebalancing quarter so far. This is due to the increased focus on sustainable mining from the companies in the fund. Our ETF is unique in providing exposure to the best-in-class members of the gold and precious metals mining sector.

“Another unique feature of ESGO is its equal-weighting. This helps to avoid concentration risks. The probability of having, for example, two companies with a combined weighting of 25-35% is relatively high in a market/liquid weighted index for a single sector. In addition, the possible underweighting of a few dominant mega-companies may also provide a beneficial return profile in a bull market for gold and gold miners.”