The Calvert International Responsible Index ETF (CVIE) seeks to track an international responsible investing index that measures the performance of developed and emerging market companies outside the U.S. that meet environmental, social, and governance (ESG) criteria while excluding controversial business activities.
How It Works
CVIE uses a passively managed approach that tracks companies screened for positive ESG characteristics while excluding sectors like tobacco, weapons, and fossil fuels. The fund employs market-capitalization weighting among qualifying international stocks, with periodic rebalancing to maintain ESG compliance and geographic diversification. Holdings span developed markets in Europe, Asia-Pacific, and emerging markets, providing broad international equity exposure through an ESG lens.
Key Features
- Combines international diversification with ESG screening, excluding controversial industries while maintaining broad geographic exposure across developed and emerging markets
- Recently launched in February 2023, offering investors a newer approach to responsible international investing with modern ESG integration methodology
- Provides 2.36% dividend yield from international dividend-paying companies that meet responsible investing criteria, appealing to income-focused ESG investors
Risks
- This ETF can lose value during international market downturns, with potential 20-35% declines during global recessions as foreign markets often experience higher volatility than U.S. markets
- Currency fluctuations can significantly impact returns when foreign currencies weaken against the dollar, potentially reducing gains or amplifying losses from international holdings
- ESG screening may limit investment opportunities and cause performance deviation from broader international markets, particularly during periods when excluded sectors outperform
Who Should Own This
Best suited as a satellite holding (10-25% of equity allocation) for ESG-conscious investors with 5+ year time horizons seeking international diversification. Medium-to-high risk tolerance required due to foreign market volatility and currency exposure. Ideal for investors building sustainable portfolios who want developed and emerging market exposure while maintaining ESG principles.