Humankind US Stock ETF Stock Price, News & Analysis

The ticker HKND represents the Humankind US Stock ETF, an exchange traded fund of Humankind Benefit Corporation. According to Humankind Investments LLC, which serves as the investment adviser to the fund, HKND is built around a quantitatively driven, socially responsible investment approach that focuses on the impact of companies on humanity. The ETF is listed on NYSE Arca and is designed to give investors exposure to U.S. equities selected for their measured contribution to human well-being.

The Humankind US Stock ETF seeks to provide investment results that, before fees and expenses, correspond closely to the total return performance of the Humankind US Equity Index. This index methodology uses a proprietary metric called “Humankind Value”, which is described as a quantitative measure of each company’s positive and negative contributions to humanity. The Humankind Value framework evaluates how a company affects investors, customers or consumers, employees, and society at large, and then adjusts for supply chain relationships.

Based on the available information, the Humankind US Equity Index focuses on domestic U.S. companies. Companies with higher Humankind Values are considered to have created more positive value for humanity, and the index weights constituents according to these scores, subject to liquidity and diversification constraints. The ETF then tracks this index, so its portfolio is composed of common stocks of U.S. companies chosen on the basis of their Humankind Value and the index’s construction rules.

Humankind Investments describes itself as a quantitatively driven asset manager specializing in socially responsible investments. Its stated mission is to give investors concrete and measurable ways to invest in a manner that generates rewards for themselves and for humanity. The firm emphasizes that it incorporates a wider scope of issues into its analysis than is typically reflected in traditional financial measurement, and that it translates human impact into monetary terms to make different issues more directly comparable.

The Humankind Benefit Corporation, represented by HKND, is described as the first and only Registered Investment Company to file with the U.S. Securities and Exchange Commission as a benefit corporation. This structure is presented as a way to align the mission of the fund with maximizing value for humanity, in addition to traditional financial considerations. The fund’s first annual benefit report outlines how it has sought to fulfill this public benefit mission, using the Humankind Value metric and engagement with portfolio companies.

According to Humankind’s benefit report summary, the issuer companies that made up the largest percentage of HKND’s portfolio at the time of that report included businesses involved in providing access to food, clean water, healthcare, or free digital services. These companies were identified as having created the most positive value for humanity as measured by their Humankind Value. Humankind Investments also notes that it has engaged with companies through letter-writing, participation in industry round tables, and meetings with company representatives to encourage improvements in Humankind Values and related disclosures.

The ETF is described as a recently organized, diversified management investment company with limited operating history at the time of the referenced disclosures. As an index-tracking fund, it is not actively managed in the sense of making discretionary security selections based on short-term performance expectations; instead, it follows the composition and weighting of the Humankind US Equity Index, subject to changes in that index. The fund documentation highlights that there is no assurance the fund will achieve its investment objective and that investors can lose money.

Risk disclosures for HKND emphasize several points. The fund is subject to Socially Responsible Investment (SRI) risk, which is described as the possibility that stocks screened for SRI criteria may underperform the broader stock market or other SRI funds. The fund may, at times, invest more heavily in particular economic sectors, which can increase exposure to sector-specific risks. The disclosures also note risks related to companies in sectors such as healthcare and technology, as well as risks associated with investing in small- and medium-sized companies.

Because HKND is an ETF, its shares trade on an exchange and can be bought or sold throughout the trading day at market prices. The fund literature notes that there can be no assurance that an active trading market will develop or be maintained for the fund’s shares. It also explains that the value of an investment in the fund is based on the values of the fund’s underlying investments, which can fluctuate due to economic and other events affecting markets, regions, sectors, or individual companies.

Humankind Investments also offers socially responsible portfolio management services for high-net-worth individuals and institutional clients, in addition to its ETF products. In some communications, the firm references a robo-advisory service called Humankind Portfolios, which provides clients with the opportunity to invest in line with the same universalist, humanistic philosophy that underpins the Humankind US Stock ETF and the Humankind Value methodology.

According to a later announcement, the Board of Directors of the Humankind Benefit Corporation authorized an orderly liquidation of the Humankind US Stock ETF after considering factors that included the fund’s inability to attract sufficient investment assets. The announcement states that the last day of trading of the fund’s shares on the NYSE is scheduled to be a specified closing date, after which the fund is expected to cease operations, liquidate its assets, and distribute liquidation proceeds to shareholders on a specified liquidation date. The communication explains that, during the period between the closing date and the liquidation date, the fund will be in the process of closing and liquidating its portfolio, increasing its cash holdings and no longer tracking its stated investment objective.

Investors are informed that shareholders remaining on the liquidation date will receive cash at the net asset value of their shares as of that date, including any capital gains and dividends as of that date, and that the liquidating cash distribution may be treated as a taxable event. The announcement advises shareholders to consult a tax advisor regarding the income tax consequences of the liquidation and notes that, once the distributions are complete, the fund will terminate.

Key characteristics of HKND

• Fund type: Exchange traded fund (ETF) structured as a diversified management investment company.
• Index tracked: Humankind US Equity Index, based on the proprietary Humankind Value metric.
• Focus: U.S. companies evaluated on their positive and negative contributions to humanity, including investor, consumer, employee, and societal value.
• Adviser: Humankind Investments LLC, a quantitatively driven asset manager focused on socially responsible investments.
• Corporate form: Humankind Benefit Corporation, described as the first Registered Investment Company to file with the SEC as a benefit corporation.
• Trading venue: Shares approved for listing on NYSE Arca, with trading subject to market conditions and liquidity.
• Status: Board-authorized liquidation and termination of the fund following a final trading date and subsequent liquidation date, as described in the fund’s liquidation announcement.

How HKND approaches socially responsible investing

The Humankind US Stock ETF’s approach to socially responsible investing is grounded in the Humankind Value metric. This metric is presented as a quantitative assessment that aggregates a company’s impact on different stakeholder groups into a single dollar-based figure. The index methodology considers investor value, consumer value, employee value, and societal value, and then adjusts for supply chain relationships to capture indirect effects.

Humankind Investments describes its process as incorporating a broad range of issues that may not be fully captured by traditional financial analysis. It references the use of nationally recognized third-party data providers, academic research, government data, and NGO data to evaluate a universe of domestic U.S. companies. Companies that achieve higher Humankind Values are more likely to be included in the index and receive higher weights, subject to liquidity and diversification constraints.

The firm also highlights engagement activities with portfolio companies, such as letter-writing, participation in industry round tables, and direct meetings, with the goal of encouraging companies to improve their Humankind Values and related disclosures. Additionally, Humankind Investments engaged a third-party proxy voting firm to help vote the shares of companies held in HKND in a manner aligned with its socially responsible focus.

Risk considerations

Fund disclosures emphasize that investing in HKND involves risk, including the possible loss of principal. SRI investment risk is specifically noted, as the screening and selection criteria used by the index sponsor may lead to performance that differs from the broader market or from other SRI funds. The fund may have higher exposure to particular sectors at times, which can increase sensitivity to sector-specific developments.

Additional risks mentioned include those associated with companies in sectors such as healthcare and technology, as well as risks related to investing in small- and medium-sized companies, which can experience greater price volatility. The fund literature also notes that, although shares are listed for trading on an exchange, there can be no assurance that an active trading market will develop or be maintained.

HKND as a historical investment vehicle

With the Board-authorized liquidation and termination of the Humankind US Stock ETF, HKND’s role as an exchange traded fund is described in the available information as coming to an end following the specified liquidation date. For investors and researchers, HKND represents a case of an ETF that combined a benefit corporation structure with a proprietary, impact-focused index methodology centered on the Humankind Value concept.