The VEGAN index screens US Large Cap stocks for vegan and environmental criteria. All the stocks whose activities are incompatible with a vegan and climate-conscious approach to investing are excluded from the list. Over the last 2 years, the Information Ratio of 2.1 has exceeded the numbers that is typically gained by the US mutual funds that are managed actively if the tracking error is divided into the annualised excess return.
Beyond Investing headed by CEO and former investment analyst Claire Smith developed this index. It is the equity research arm of impact investing platform which has average market capitalisation of
USD155 billion and the median market cap of USD21 billion. The 278 companies that currently make up VEGAN includes Google, Facebook, Microsoft, Tesla and Beyond Meat.
They exclude all the brands that do animal testing, sell products derived from animals, products that abuse Human Rights and such other issue based products from the listing thus removing approximately 49 per cent of the market capitalisation of the top 500 US large cap stocks. So a third of the S&P500 Index is removed for involvement in animal testing, animal-derived products or the use of animals in sport and entertainment.
Other companies who are doing environmentally damaging activities like extraction, combustion and financing of fossil fuel cause 11.7 per cent of the S&P500 Index to be excluded.
