BNP Paribas Asset Management has announced that it has received regulatory approval from the Central Bank of Ireland for BNP Paribas Easy ICAV and has launched its first sub-fund, BNP Paribas Easy S&P 500 ESG UCITS ETF.
The fund, BNPP AM’s first Irish ETF, is classified as SFDR Article 8 and has been listed on Euronext Dublin, Euronext Paris and Deutsche Börse Xetra and will also be listed on Borsa Italiana, SIX Swiss Exchange and the London Stock Exchange at a later stage.
BNP Paribas Easy S&P 500 ESG UCITS ETF is designed to replicate the performance of the S&P 500 ESG Index, a US-based, market-cap-weighted index that measures the performance of stocks adopting a ‘best in class’ ESG approach. With a starting universe of the S&P 500 Index constituents, the S&P 500 ESG Index applies a number of exclusions and restrictions. Those that are not compliant with the United Nations Global Compact (‘UNGC’), those that the S&P Index Committee deem to be controversial or those without an S&P DJI ESG score are excluded.
The S&P 500 ESG Index, which was launched in 2019 and is rebalanced annually on the last business day of April, includes around 300 of the 500 constituents of its parent index. Relative to its parent index, the largest overweight sectors are currently IT and consumer discretionary, while the largest underweights are energy, utilities and industrials. The S&P 500 ESG Index has outperformed the S&P 500 Index in each of the past five calendar years with similar volatility and with ESG score and carbon efficiency improvement.
US equity ETFs have proved especially popular with European investors, who have preferred index exposure as historically it has proved difficult for active managers to outperform the US equity market. Equity ETFs available in Europe are now valued at more than USD1 trillion, with US equity ETFs accounting for 33 per cent of this, ahead of both Global equity (27 per cent) and European equity (25 per cent) ETFs.
BNP Paribas Easy S&P 500 ESG UCITS ETF is BNPP AM’s first ETF to track an S&P ESG index, and will be managed in accordance with BNPP AM’s Governance & Voting Policy, meaning that it will vote on all underlying holdings. BNPP AM is a pioneer in sustainable thematic ETFs, launching the first low carbon ETF (in 2008), and the first circular economy, blue economy, ESG infrastructure and sustainable listed real estate ETFs.
Lorraine Sereyjol-Garros, Global Head of Development for ETFs & Index Funds at BNPP AM says: “Regulatory approval for BNP Paribas Easy ICAV will enable us to broaden our ETF offering to investors in countries that favour Irish ETFs, including the UK, Switzerland, Netherland and in the Nordics, where BNPP AM is already well established and where we see growing client demand, and the launch of our first Irish-domiciled sub-fund, BNP Paribas Easy S&P 500 ESG UCITS ETF, is a key milestone in the development of our range of sustainable ETFs. Ireland has a well-developed ETF ecosystem that benefits funds with exposure to US equities, as well as global equities, where we are planning further thematic ETF launches.”