Calvert US Large-Cap Diversity, Equity and Inclusion Index ETF (CDEI) seeks to track an index that measures large-cap U.S. companies demonstrating strong diversity, equity, and inclusion practices. This ESG-focused equity ETF targets firms with diverse leadership, inclusive workplace policies, and equitable business practices within the large-capitalization segment.
How It Works
CDEI uses a passively managed approach that screens large-cap U.S. stocks based on diversity and inclusion metrics including board diversity, workforce representation, and inclusive policies. The fund employs market-capitalization weighting among qualifying companies that meet specific DEI criteria. Holdings are rebalanced quarterly to maintain alignment with index changes and ensure continued adherence to diversity standards. The strategy combines traditional large-cap equity exposure with values-based screening methodology.
Key Features
- First-of-its-kind focus specifically on diversity, equity, and inclusion factors within large-cap U.S. equity investing
- Recently launched in February 2023, offering investors access to emerging ESG trend of DEI-focused investing
- Zero expense ratio structure making it cost-competitive among ESG and socially responsible investment ETFs
Risks
- This ETF can lose value if diversity-focused companies underperform broader markets or if DEI screening reduces diversification benefits significantly
- Limited track record since 2023 inception means performance during various market cycles remains untested and unpredictable
- Large-cap equity exposure subjects fund to 20-40% potential declines during broad market downturns, similar to S&P 500 volatility
Who Should Own This
Best suited for values-driven investors with 5+ year time horizons seeking large-cap U.S. equity exposure aligned with diversity and inclusion principles. Medium-to-high risk tolerance required due to equity volatility and concentrated ESG focus. Works as satellite holding (5-15% of equity allocation) complementing core broad-market positions for socially conscious portfolios.