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UBS Asset Management launches three sustainable investing-focused ETFs

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UBS Asset Management has launched a series of three ETFs that expand the core benchmark ESG series of products that integrate sustainability into their methodologies, and meets the growing demand driven by SI-focused investors. 

As one of the foremost innovators in this field, UBS AM has united with STOXX, MSCI and J.P. Morgan to provide passive investors with three new products that widen the investment options, and can give access to new sources of return and yield enhancement opportunities, whilst meeting specific ESG standards.
 
Core Eurozone ESG-screened blue-chips are now investible via the UBS ETF (LU) EURO STOXX 50 ESG UCITS ETF. This product enables investors to receive similar performance characteristics to the standard EURO STOXX 50 exposure, but with an ESG approach added to it. Ten percent of the lowest ESG-scored companies are excluded, (in total 5 securities), and are replaced by better-scoring sector peers from the wider EURO STOXX universe. It also omits non-UN Global Compact Principle compliant companies and tobacco producers, controversial weapon producers, and those involved in thermal coal. This ETF is intended to be a core ESG-compliant building block for Eurozone blue-chip stocks. With an expected low tracking error, and similar performance to the standard EURO STOXX 50 exposure, this new UBS ETF forms a core portfolio component for the modern SI community.
 
Chinese equities that pass ESG screening criteria are now accessible for the first time passively via the UBS ETF (LU) MSCI China ESG Universal UCITS ETF. This product physically replicates the MSCI China ESG Universal Index, which favours companies with a robust and an improving ESG profile. From within the eligible universe (MSCI China), companies that are ESG and / or controversy unrated are excluded, as are those touched by controversy. Involvement in controversial weapons leads to exclusion, as is the case in most ESG-centric exposures. This ETF will appeal to investors looking to gain exposure to the wider Chinese economy, but with the added reassurance that the SI aspect has been accounted for.
 
Investment grade USD denominated Emerging Market debt with a sustainability filter is now available via UBS ETFs. The UBS ETF (LU) J.P. Morgan USD EM IG ESG Diversified Bond UCITS ETF offers a diversified source of investment grade EM yield in one package for bond investors. This pioneering product offers a credit and sustainability filtered selection of sovereign and corporate Emerging Market USD debt, and can potentially play an important role in augmenting portfolios and bringing all-important diversification into play. The investment approach behind the index is entirely rules-based, transparent and efficient in its implementation. With the improvement in credit quality of the underlying assets comes the increasing appeal of this ETF for investors with minimum credit rating requirements, such as insurance companies and pension funds that often have restrictions to only invest into investment grade exposures.
 
Clemens Reuter, Head of ETF & Passive Investment Specialists, UBS Asset Management, says: “Being a leader and innovator in sustainability-focused ETFs, UBS Asset Management has now further expanded into new markets and segments, widening considerably the ESG investment opportunities for investors. The demand for sustainable investments is accelerating, and it is of great importance to us to help investors in achieving their ESG goals, whilst being invested across geographies and diversified across asset classes. This newly launched series of three ETFs certainly opens a new set of opportunities for passive sustainability-focused investors.”
 
Michael Baldinger, Head of Sustainable & Impact Investing, UBS Asset Management, says: “UBS’s goal is to be the world’s leading sustainable financial provider, and we aim to reach that by developing innovative products and solutions to meet the evolving needs of our clients.”
 
The three new ETFs will are available in USD, as well as currency hedged share classes (CHF, EUR and GBP). Listings will take place across key European exchanges including the London Stock Exchange, Deutsche Börse Xetra, Borsa Italiana and SIX Swiss Exchange.

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