For the very first time, a European exchange traded fund (ETF) focused on environmental, social and governance (ESG) investing has passed the EUR 1 billion mark of assets under management.
Launched in 2011, UBS Asset Management’s UBS ETF (LU) MSCI World Socially Responsible UCITS ETF exceeded EUR1.23 billion in July 2019.
The ETF physically tracks the MSCI World Socially Responsible 5 per cent issuer capped TRN index, which includes companies that represent the top quartile on ESG criteria, according to the index’s methodology. With a total expense ratio of 0.25 per cent, the fund gives access to the shares of companies in 23 countries at a low cost, and applies a 5 per cent cap on any one issuer, assuring a varied basket of stocks that offers sound diversification potential for portfolios.
Andrew Walsh, head of Passive & ETF Specialist Sales for UK & Ireland, UBS Asset Management, says: “This milestone represents a further confirmation of our commitment to meet the increasingly sophisticated needs of investors. We want to continue to stay at the forefront in developing innovative products and solutions for our clients, helping them to align their investments and ESG goals.”
A leader in the ESG ETF space, UBS Asset Management has witnessed very strong asset growth of sustainability-focused exchange traded funds in Europe in the first half of the year. Total AuM reached EUR17 billion, up 70 per cent compared to the end of 20182. In the ESG ETF sector, equity instruments are the investors’ preferred segment, representing 84 per cent of total assets. However, the fixed income sector is gaining momentum with large inflows in the past 12 months, leading to a doubling of assets to EUR2.8 billion.