Lyxor Asset Management has raised over EUR1 billion in assets in its Climate ETF range, only one year after launch, in a sign that investors are taking decisive action to align their portfolios with their carbon neutrality goals.
The eight Lyxor Climate ETFs, which replicate the S&P Paris-Aligned Climate (PAB) and MSCI Climate Change (CTB) indices and are designed to comply with European regulations, account for a share of 30 per cent of the ETF market segment tracking PAB and CTB indices.
In March 2020, Lyxor became the first European ETF provider to launch a full ecosystem of ETFs that take the objectives of the Paris Agreement of limiting the rise in temperatures to 1.5C, “with no or limited overshoot” above pre-industrial levels, into account.
In a context where flows into ESG ETFs are breaking all records in Europe, Climate ETFs are making their way into the portfolio allocations of institutional investors committed to decarbonising their portfolios and contributing to reduction of emissions. Labelled climate indices provide a transparent and cost-effective way to leverage a multitude of climate data. The high value-added PAB and CTB indices tracked by the Lyxor ETFs allow investors to reduce the immediate carbon intensity of their portfolios and to follow an absolute decarbonisation path of 7 per cent year-on-year.
Arnaud Llinas, Head of Lyxor ETF and Indexing, says: “Over the past year, institutional investors gradually became aware that Climate ETFs can be an effective tool in the fight against climate change, as they can shift capital towards low-carbon investments at scale, within a scientific rules-based and transparent framework. We are convinced that Climate ETFs, through their accessibility and low fees, will also help democratise climate investment for retail investors and, as a result, will form a fundamental component of the wider ESG ETF market.”
Fighting climate change is central to Lyxor’s convictions. Lyxor positions itself as the ETF provider of reference for climate indices, having launched the world’s first Green Bond ETF in 2017, the largest in its category with EUR560 million of assets under management. Most of the capital raised by the ETF’s underlying Green Bonds finances projects aimed at fighting climate change. Earlier this year, Lyxor published temperature measurements for 150 of its ETFs, enabling investors to assess the impact of their portfolios on global warming and to reallocate their capital towards a low-carbon economy.
