Krane Funds Advisors (KraneShares) has launched the KraneShares MSCI China ESG Leaders UCITS ETF (KESG) on the London Stock Exchange.KESG tracks the MSCI China ESG Leaders 10/40 Index, a capitalisation weighted index that provides exposure to companies with high Environmental, Social and Governance ratings relative to their sector peers. The Index consists of large and mid-cap companies domiciled in China. KESG’s index provider, MSCI, is the number one provider of ESG, Socially Responsible Investment (SRI) and corporate governance indexes based on a survey of global institutions.
China’s economy is moving from manufacturing to services. Typically, companies aligned with the “New China” economy experience greater growth than companies from China’s legacy sectors. MSCI’s ESG methodology not only identifies more socially responsible investment opportunities, it can also be an effective filter for capturing companies that are aligned with China’s future growth trajectory.
Since its inception in 2013, the MSCI China ESG Leaders Index has outperformed the standard MSCI China Index by 58 per cent. The 5-year annualised return of the MSCI China ESG Leaders Index was 12.34 per cent as compared to just 7.49 per cent from the MSCI China Index.
“We have seen a lot of investor demand for a China-focused ESG UCITS ETF,” says Jonathan Krane, CEO of KraneShares. “We are proud to partner with MSCI, a global leader in ESG indexing, to deliver the KraneShares MSCI China ESG Leaders UCITS ETF (KESG) to our clients.”
