Constrained Capital ESG Orphans ETF

Investment Strategy

The Constrained Capital ESG Orphans ETF (ORFN) seeks to track the performance of the Constrained Capital ESG Orphans’ Index, before fees and expenses. The Fund will invest all, or substantially all, of its assets in the components securities and American Depositary Receipts (ADRs) that make up the Index. The Index is comprised of US equity securities of publicly traded mid- and large-cap US-listed companies that are ESG Orphans (exclusions) as defined by the Index. The 6 industries defined by the index are: fossil fuel, nuclear energy, weapons & munitions, tobacco, alcohol and gaming.

Learn more about the Index here.

About the Firm

Constrained Capital was created to capitalize on opportunities in the public markets where investment methodologies, in its opinion, have distorted prices of securities due to capital constraints. The Firm believes that the bubble of Environmental, Social and Governance (ESG) investing has put constraints on Fossil Fuels, Nuclear Energy, Weapons, Alcohol, Tobacco, and Gaming.

Constrained Capital approaches these opportunities from the perspective of maximizing potential economic returns with each unit of capital invested. Our research and investments seek to capitalize on risk-adjusted returns in higher expected return securities.

Why Invest in ORFN

Higher expected return potential

We believe a bubble has formed around ESG investing. Over the past decade, this movement has distorted prices as entire sectors (the “Orphans”) were excluded from portfolios. In our view, the investment constraints on the Orphan securities have created the potential opportunity for return and risk-adjusted returns over time.

Non-correlated diversification

ORFN is backed by research suggesting Orphaned securities have higher-expected return potential. Because they’re excluded and severely under-owned, the result is lower market correlation from the broader indices.

Barbell portfolio strategy

Given ORFN’s dividend yield, market beta, composition, and defensive nature, it may help provide portfolio balance (or a “barbell strategy”), for investors positioned for more risk and market beta.


Fund Information

wdt_ID Description Information
1 Fund Name Constrained Capital ESG Orphans ETF
2 Fund Inception 05/17/2022
3 Ticker ORFN
4 Primary Exchange NYSE Arca
5 CUSIP 886364538
8 NAV Symbol ORFN.NV
9 Expense Ratio 0.75%
10 Data as of 04/30/23
30-Day SEC Yield

Fund Data & Pricing

30-Day Median Spread is a calculation of Fund’s median bid-ask spread, expressed as a percentage rounded to the nearest hundredth, computed by: identifying the Fund’s national best bid and national best offer as of the end of each 10 second interval during each trading day of the last 30 calendar days; dividing the difference between each such bid and offer by the midpoint of the national best bid and national best offer; and identifying the median of those values.


Inception Date: 05/17/2022

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling (800) 794-1485. Short term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns. Returns beyond 1 year are annualized. A fund’s NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. The market price is the most recent price at which the fund was traded. The fund intends to pay out dividends and interest income, if any, monthly. There is no guarantee these distributions will be made.


Holdings subject to change.

Purchase Information


Constrained Capital’s ESG Orphans ETF (ORFN) is available through various channels including via phone (800) 794-1485, broker-dealers, investment advisors, and other financial services firms.

This Fund is not affiliated with these financial service firms. Their listing should not be viewed as a recommendation or endorsement.


This is part of our thesis. Somehow, somewhere these stocks become more acceptable in the ESG purveyor’s eyes. Oil companies, “go green,” or, “carbon neutral by 2030,” or nuclear becomes more accepted (starting to see this,) or weapons become ESG acceptable due to social pacifier-effects.

Actions take longer than words. The talk of these events takes much longer to play out. While those debates go on, our Orphans WOULD see more inflows and attention and appreciate. This means the thesis is working. Along the way we stick to rebalancing guidelines (passive rules) and balance the portfolio accordingly.

In the case that a sector becomes an “ESG Inclusion” we would reassess and maintain the sectors detailed under the methodology.

The bubble in ESG investing has been growing a while. The idea behind ORFN is a reversion, contrarian, most hated becomes most loved, investment. If fossil fuels remain imperative, if nuclear energy gains acceptance, if weapons continue to be needed in the world, if people will still drink, smoke, or gamble, then the Orphans remain a very good place to allocate some of a portfolio.

Political winds have been very green for a long time and cottage industries have sprung up around the ESG movement. If the 2022 Midterms or 2024 White House shift back after excessive inflation or high gas prices, the Orphans would likely return to favor in some investment styles.

In a bearish market environment, if most of the market is going down, ORFN may or may not down, but could face beta headwinds. Where the ESG world continues to expand and exclude these names to a point of continued shame, bad banking and financing deals, and lack of flow into these sectors, ORFN could face further headwinds. If the political vise continues to tighten on the energy, nuclear, and weapons sectors could remain under pressure.

The ORFN serves a few purposes in a portfolio. First, those who are looking for portfolio diversification into underinvested areas of the market, the 6 sectors that comprise the ESG Orphans ETF have suffered from lack of inflows over the past decade. ORFN can balance a portfolio with heavy ESG investments.

In addition, the ORFN provides a contrarian opportunity to invest in constrained capital sectors. Higher expected returns in these Orphans are part of the investing theme, objective.

ORFN falls on the value side of the ledger versus growth and pays a decent dividend. It provides a barbell effect in the portfolio and can be seen as somewhat defensive. Overall, diversity and a counterbalance to the recent growth-induced investing climate are two of the leading aspects of ORFN and investors seeing that result are best suited to ORFN.