Market-beating vegan ETF founder explains the fund's big tech strategy - Business Insider

The fund also strips out companies that produce energy from fossil fuels, or that have any involvement in defense activities, or that have been linked to human rights problems.Around 49% of the top 500 US large cap stocks aren't eligible for inclusion, leaving around 280 names, all of which must be continuously scrutinized for their sustainability practices, ready for when the fund rebalances every six months. "I also think [investors] have to attribute some value to the work that we're doing, in terms of identifying the stocks that we should be excluding, it's not a trivial, it's not a simple exercise, which I think is borne out by the fact that nobody else has even tried to even try to do it," Smith said.However, with the number of sustainable ETFs and mutual funds on the rise, the question is whether investors will still be willing to pay a relatively high fee for VEGN's outperformance.Smith doesn't see the increase in competition as a problem, but more as an advantage."If other companies do decide to do this, then our fund will continue to outperform, because it's then that other people jump on this bandwagon and decide to divest from animal agriculture in the same way as they had have divested from fossil fuels, it will exert a negative pressure on their stock price," Smith said."And so, we will look good on the back of other people doing the same things in their portfolio as we've already done to ours."Axel Springer, Insider Inc.'s parent company, is an investor in Uber.