Rize sustainable food ETF to ditch egg, dairy and land-based fish farming firms

In its latest update to its Sustainable Future of Food ETF, Rize said it is switching out of investing in egg, dairy, and land-based fish farming companies as it wanted the portfolio to be "more sustainable".

An ETF issuer is to stop investing in companies involved in egg, dairy, and land-based fish farming in its sustainable food ETF as it looks to become “more sustainable”, in a rejig of its portfolio.

Rize’s Sustainable Future of Food ETF is based around several sub-sectors including plant-based foods and organic foods; water technology; precision farming and agricultural science.

It said it made the decision to stop investing in the three areas as it wanted to move to a  “more sustainable” portfolio.

“We believe this index update is a reflection of our actively researched index design and investment process that seeks to achieve the greatest possible purity to the investment theme," Rize said.

"We believe it’s also an important reflection of what we believe must constitute a more sustainable future of food as we move towards greater consumption of plant-based foods and proteins and away from food items with an adverse environmental (and health) impact."

The move means that Cal-Marine Foods, the US egg producer, Danone, the multinational food giant and Atlantic Sapphire, the largest global onshore aquaculture company in the world, will no longer form part of its Sustainable Future of Food ETF.

Studies have shown that producing a glass of dairy milk results in nearly three times more greenhouse gas emissions than plant-based milk. 

In recent years, egg production has been in the spotlight for animal welfare issues while many critics of land-based fishing argue that their higher stocking density threatens fish welfare.

In its update, Rise said its Sustainable Future of Food ETF has reported year-on-date returns of 8.54 per cent, from the end of the year 2021 to September 20 this year.

It said the biggest contributors in the ETF included. Deere, precision farming firm Raven Farming and packaging company SIG Combibloc.

In total, it said 39 of the total 57 firms in the ETF had delivered a “positive performance” during the half year while 18 of the 57 companies delivered a “negative performance” during the half year.

Rize has also added new firms to the ETF, including indoor farming company AppHarvest, plant-based milk firm Oily and fruit and vegetable producer Dole.