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The product I am looking for is a diversified ETF like MSCI World, excluding sectors that I do not want my money to be invested in.

Ideally, I would be able to choose a basis ETF (like MSCI World), and then just tick checkboxes of sectors or companies to exclude by criteria like involement in, e.g.

  • extracting or selling fossil fuels
  • industrial meat farming
  • distribution of deep-fried candy bars
  • even more random preference.

Does this product exist?

I know some 'pre-made' ETFs like that exist (e.g. MSCI WORLD SRI, MSCI ACWI Low Carbon Target ETF), but these would never meet all of my personal preferences.

And if this product really doesn't exist, why should it be hard to build this? There should be quite some demand, given vastly diverse social preferences of individuals, e.g. due to religion, etc..

  • If you're that picky, you might be better off investing in individual companies and, effectively, making your portfolio your own ETF. – Peter K. Oct 2 '15 at 16:25
3

They have ETFs for most of what you listed above.

Except the deep-fried candy bars. You know that's just a distributed candy bar that is THEN fried right?

They have a few religious ETFs as well as some socially responsible ones.

There is no reason to make one based on a single person's preference though - ETFs make their money on fees. For that they need VOLUME.

Move Volume = More Money

Also, there are over 1,411 ETF's in the US as of 2014. That means there are a lot of options already.

You could always create your own if you are a great salesperson though.

Source

  • 1
    ETF's do not receive income from commissions on trades, in fact they must PAY commissions when managing (adding or selling securities) in the portfolio. Their income is from management fees. – michael Oct 2 '15 at 17:03
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    Adding in support of this answer, the "ET" part of "ETF" is "exchange traded". Not only would the market maker need to overcome the issues of being worth it to them, the whole concept only makes sense if there are going to be other people who share your specific preferences and want to buy/sell this en masse on an exchange. That seems unlikely to work for something micro-managed for individual preferences on demand. – user32479 Oct 2 '15 at 20:48
1

I believe that kind of micro-tuning for every participant would make the operating costs of the fund intolerable. A better approach, if this is important to you, would be to find a fund or funds designed for people who share your criteria.

If the goals and criteria aren't mutual, a mutual fund -- traditional or ETF -- is probably not the right tool.

  • I share your opinion, respecting all preferences would be difficult. But by offering a set of say the most commonly found 20 one would cover most peoples needs! – hansonhill Oct 2 '15 at 13:22
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    Easier to just offer 20 funds, which is more more or less what's available now. Time to do some shopping. – keshlam Oct 2 '15 at 13:59

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