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Sphere and RAM launch SPFFX, the first index fund to get fossil fuels out of any 401(k) plan

The competitively-priced fund invests in the top 500 US companies minus ~40 fossil fuel companies, with its index historically outperforming the SPDR S&P 500 ETF

By

Sphere

November 16, 2021

WALNUT, Calif. - California-based startup Sphere announced today that it has partnered with SEC-registered investment advisory firm Reflection Asset Management (RAM) to launch the Sphere 500 Climate Fund (SPFFX), a mutual fund designed to remove the barriers that have kept fossil-free options out of 401(k) retirement plans until now.

The fund is the first U.S.-based option of its kind and launches as over 80 percent of Americans report seeing climate change as a threat, according to Pew Research, and yet 99 percent of Americans with 401(k) retirement savings are not invested in climate funds, or funds that avoid owning fossil fuel companies. While climate change is a topic that individuals often feel helpless to solve, SPFFX offers a concrete way for investors to make an impact, without giving up quality of life or expected returns on retirement savings.

The fund is available on brokerage platforms, including Interactive Brokers, with Vanguard and Vestwell in the process of onboarding, and on 401(k) platforms such as Matrix and Mid Atlantic Capital Group. Additional platforms are being added. Financial firms Green Retirement and Carbon Collective plan to offer the fund to 401(k) clients.

SPFFX has already found traction beyond its target market of 401(k)s, with launching investments from Eliot Horowitz, co-founder of tech unicorn MongoDB, and Clay Rockefeller, great-great-grandson of John D. Rockefeller.

“We could not be more thrilled to be partnering with the team at RAM to launch this fund,” said Sphere founder and CEO Alex Wright-Gladstein. “By offering this product, RAM is demonstrating their commitment to making a difference on climate change by making a values-aligned investment product available not only to wealthy investors, but also to everyday people in their retirement plans.”

The Sphere 500 Climate Fund (SPFFX) tracks the Sphere 500 Fossil-Free Index (SPFFXI), which is comprised of the largest 500 US companies by market capitalization, minus approximately forty companies whose primary lines of business are in the fossil fuel industry, as defined by the non-profit As You Sow on their website fossilfreefunds.org.

The SPFFXI index was calculated by independent third-party index calculation agent BITA. The 40 or so companies that are excluded make up about five percent of the total market capitalization of the top 500 group.

“As I write this, drought-parched California is welcoming rain after another record-breaking fire season,” said Timothy Yee, President of Green Retirement. “This investment, reflecting our common desire to live in a healthy world, is one of the easiest ways for the average consumer to bring about change.”

RAM is offering the fund as a single share class with a management fee of seven (7) basis points. This focus on transparent and low pricing aims to enable investors and 401(k) managers to compare this fund’s pricing to that of other large-cap index replication funds, rather than the higher price points that Environmental, Social, and Governance (ESG)-focused funds often charge.

“In my almost 20 years of designing and building ESG and values-aligned investment products for individuals and institutions, overcoming the challenges of bringing values-aligned products to retirement accounts has been a personal goal,” said Jason Britton, CEO of RAM. “With Sphere’s leadership, SPFFX represents a breakthrough, offering employees the option to have their retirement investments aligned with their vision of a fossil fuel-free tomorrow.”

Avoiding the ESG price premium is a key factor in making a fossil-free option available in 401(k) plans, where employers often face lawsuits for offering 401(k) fund options that are too expensive. Sphere founder Alex Wright-Gladstein experienced firsthand the difficulties of offering expensive fossil-free funds in 401(k)s when running her prior cleantech company, Ayar Labs, where it took years to get a fossil-free option in the company’s retirement plan. Sphere was founded with the intention of providing employers with an easier way to provide their employees with a fossil-free 401(k) option.

Sphere has selected U.S. Bank to provide its comprehensive suite of industry leading multi-series trust services for the fund. They have selected Vigilant Distributors LLC as the distributor for the fund.

“We are excited to partner with Reflection Asset Management and Sphere, as we see a real need in the marketplace for a simple, transparent, low-cost fossil-free fund for 401(k) plans,” said Patrick Chism, CEO of Vigilant Distributors.

About Sphere

Sphere is a registered public benefit corporation that is amplifying a social movement to get 401(k) money out of fossil fuel companies. The company helps employees, employers, and investors take a stand on climate change by providing financial products that are designed for 401(k) plans, and allows HR managers and their advisors to maintain their commitment to fiduciary duty without having to compromise on climate. Learn more at www.oursphere.org. For more information reach out to hello@oursphere.org.

About Reflection Asset Management

Reflection Asset Management is an SEC registered investment advisor specializing in creating ESG strategies and Registered Funds that allow asset owners to align their values with their portfolios. Learn more at www.reflectionam.com. For more information reach out to info@reflectionam.com.

Learn more: https://www.reflectionam.com/sphere

As with all investments, there are risks involved with investing in SPFFX. Risks include, but are not limited to, sustainability considerations, general market or market event, common stock risks, climate investing considerations risk, sector risk, and third-party data risks as it relates to the composition of the Index. For a detailed explanation of the risks associated with SPFFX and the underlying Index, please read the prospectus.

The Sphere 500 Climate Fund tracks the Sphere 500 Fossil-Free Index. The Sphere 500 Fossil-Free Index starts with the top 500 US companies by market capitalization and then excludes those companies designated as participants in the fossil fuel industry. The Sphere 500 Fossil-Free Index will not invest in companies whose main lines of business include producing, distributing, or refining fossil fuels, holding reserves of fossil fuels, utilities that are primarily fossil fuel-powered, and producers of equipment for any of the above. However, the fund may invest in companies that use fossil fuels as a part of their business or have used fossil fuels in the past. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Index returns do not reflect the effects of fees or expenses. It is not possible to invest directly in an index.

The performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. For the most recent month-end performance, please call 844-2-SPHERE or visit the fund’s website at https://www.oursphere.org/fund.

Index performance is discussed for illustrative purposes only as a benchmark for each strategy’s performance and does not predict or depict performance of that strategy. While index comparisons may be useful to provide a benchmark for a strategy’s performance, it must be noted that investments are not limited to the investments comprising the indices. Each of the strategy benchmark indices are unmanaged and cannot be purchased directly by investors. Past performance does not guarantee future results. No portion of the content should be considered a solicitation to buy or an offer to sell shares of the fund in any jurisdiction where the solicitation or offer would be deemed unlawful under the securities laws of such jurisdiction. The Sphere 500 Climate Fund is distributed by Ultimus Fund Distributors, LLC, member of FINRA and SIPC, which is not affiliated with Sphere or SPFFX. NOT FDIC INSURED NOT BANK GUARANTEED. MAY LOSE VALUE.