Formidable Fortress ETF has several promising attributes that may appeal to sustainability-focused investors.
This strategy holds securities with low exposure to ESG risk relative to those of its peers in the Morningstar US Equity Mid Cap category, earning it the highest Morningstar Sustainability Rating of 5 globes. ESG risk measures the degree to which material environmental, social, and governance issues, such as climate change and inequalities, could affect valuations. ESG risk differs from impact, which is about driving positive environmental and social outcomes for society’s benefit.
One key area of strength for Formidable Fortress ETF is its low Morningstar Portfolio Carbon Risk Score of 7.53 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. The fund is therefore well positioned to transition to a low-carbon economy. Currently, the fund's involvement in fossil fuels is negligible, and compares favorably with 8.37% for its average peer.
One potential issue for a sustainability-focused investor is that Formidable Fortress ETF doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate are more likely to align with the expectations of an investor who cares about sustainability issues.
The fund has a modest level of exposure (5.96%) to companies with high or severe controversies. Companies with high or severe controversies are involved in incidents such as corruption, employee abuses, environmental incidents, and corporate scandals that pose serious business risks to the company.