California-based investment company, ROC Investments, has launched the world’s first exchange-traded fund (ETF) that invests exclusively in companies selected based on the behavior of its CEOs and senior executive teams.
Interestingly, the Environmental, Social and Governance (ESG) approach to investment already looks at governance factors, focusing on corporate policies and how companies are regulated. However, it will be the first fund to fully look at the character of the CEO.
The ROC (Return on Character) ETF that trades under the trading symbol ROCI seeks long-term capital appreciation by investing in character-based organizations.
ETFs that began trading in the US on Thursday include Apple Inc (6.61%), Microsoft Corp (6.11%), Amazon.com Inc (3.88%), UnitedHealth Group Inc (2.84%), Berkshire Hathaway Inc (2.78%) . ), is one of its top five components.
Notably, Elon Musk-led Tesla Inc. and Mark Zuckerberg-led Meta Inc. failed to cut the opening holdings of the ETF.
According to ROC Investments, the fund’s portfolio will typically consist of 75 to 150 stocks with the highest composite character scores, weighted to reflect the return profile of traditional, broad-based U.S. securities. The weighting will be assessed and revised quarterly, and the character score will be re-evaluated on an annual basis.
The manager of strategy, RoC Investments, believes that the market constantly measures the value of exceptional character over the long term, not measuring it at all.
ROC Investments has created an actively managed investment strategy based solely on the character of corporate leadership. The main strategy will be to identify and buy US companies with management behavior that exemplifies the highest level of character.
The four pillars of the ROC’s character model are integrity, responsibility, forgiveness and compassion.
“More than external characteristics such as education, tenure, politics, age, industry or religion, it is the internal characteristics that determine character. Our hope is that the ROC ETF will show that not only does character matter, but it is the best way to live and invest,” said Dan Cooper, founder and CEO of RoC Investments.
Investments by Indian investors in US stocks or ETFs are permitted under the Liberalized Remittance Scheme (LRS) of the Reserve Bank of India.
Under the LRS, an Indian individual can remit up to $250,000 per year for travel, education and medical care as well as the purchase of shares.
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