Key Takeaways
- • First Trust Advisors launched the First Trust Emerging Markets Human Flourishing ETF (FTHF), listed on NYSE, targeting emerging market companies with elevated "Human Dignity Scores" as a novel ESG-focused investment vehicle.
- • The ETF's selection methodology relies on Freedom House's Human Dignity Score, which weights freedom of expression and belief at 80% and freedom from religious persecution at 20%, creating a distinct ESG framework focused on human rights rather than traditional environmental or governance metrics.
- • FTHF seeks to replicate the performance of the Emerging Markets Human Flourishing Index, with constituent securities drawn from the Bloomberg Emerging Markets Large- and Mid-Cap universe and subject to specific market capitalization, liquidity, and country-level human dignity thresholds.
- • This product represents a differentiated approach within the alternative investment and ESG landscape, positioning human dignity and religious freedom as measurable, investable criteria in emerging markets—an area traditionally underserved by impact-focused ETF offerings.
Summary
First Trust Advisors has introduced a specialized exchange-traded fund that integrates human rights considerations into emerging market equity investing. The First Trust Emerging Markets Human Flourishing ETF (ticker: FTHF), now trading on the New York Stock Exchange, targets companies operating in emerging markets that demonstrate elevated commitment to human dignity as measured by Freedom House, a nonprofit research and advocacy organization focused on democracy, political freedom, and human rights.
The fund's core objective is to track the price and yield performance of the Emerging Markets Human Flourishing Index, net of fees and expenses. FTHF's investment universe is restricted to securities within the Bloomberg Emerging Markets Large- and Mid-Cap index that meet specified market capitalization and liquidity thresholds while originating from countries demonstrating commendable human dignity standards.
The methodology centers on Freedom House's proprietary Human Dignity Score, which evaluates countries using two primary components: freedom of expression and belief (weighted at 80% of the score) and freedom from religious persecution (20%). The first factor assesses the presence of free and independent media, individuals' ability to practice and express religious beliefs, academic freedom, and freedom to voice opinions on sensitive subjects. The second evaluates a country's equitable treatment of different population segments based on religious affiliation. This framework distinguishes FTHF from conventional ESG funds that typically emphasize environmental sustainability, board diversity, or executive compensation structures. By anchoring investment selection to human rights metrics rather than traditional ESG factors, First Trust is targeting institutional investors and family offices seeking alignment between portfolio exposure and values centered on human dignity and religious freedom in emerging market economies.
The fund's core objective is to track the price and yield performance of the Emerging Markets Human Flourishing Index, net of fees and expenses. FTHF's investment universe is restricted to securities within the Bloomberg Emerging Markets Large- and Mid-Cap index that meet specified market capitalization and liquidity thresholds while originating from countries demonstrating commendable human dignity standards.
The methodology centers on Freedom House's proprietary Human Dignity Score, which evaluates countries using two primary components: freedom of expression and belief (weighted at 80% of the score) and freedom from religious persecution (20%). The first factor assesses the presence of free and independent media, individuals' ability to practice and express religious beliefs, academic freedom, and freedom to voice opinions on sensitive subjects. The second evaluates a country's equitable treatment of different population segments based on religious affiliation. This framework distinguishes FTHF from conventional ESG funds that typically emphasize environmental sustainability, board diversity, or executive compensation structures. By anchoring investment selection to human rights metrics rather than traditional ESG factors, First Trust is targeting institutional investors and family offices seeking alignment between portfolio exposure and values centered on human dignity and religious freedom in emerging market economies.
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