BNP Paribas Asset Management has announced the further expansion of its fixed income ETF range with the launch of two new SFDR Article 8 funds, BNP Paribas Easy € Corp Bond SRI Fossil Free Ultrashort Duration UCITS ETF and BNP Paribas Easy USD Corp Bond SRI Fossil Free UCITS ETF.
Both are sub-funds of the BNP Paribas Easy Luxembourg SICAV and were listed on Euronext Paris, Borsa Italiana and Deutsche Börse Xetra from 3 October. BNPP AM’s range of fixed income index funds includes 12 ETFs covering sovereign bonds, investment grade and high yield corporate credit, and green, social and sustainability-linked bonds.
BNP Paribas Easy € Corp Bond SRI Fossil Free Ultrashort Duration UCITS ETF is an ultra-short duration SRI strategy designed to enhance the firm’s existing range of fixed income ETFs that now has more than EUR10 billion of assets under management. It replicates the performance of the Bloomberg MSCI Euro Corporate Ultrashort Fixed and Floating Rate SRI Index, an investment grade bond index with approximately 400 constituents and an average duration of 0.7 years. The index is constructed using MSCI’s sustainability criteria including value-based, controversial sectors and fossil fuel exclusions; ‘red flag’ ESG controversy exclusions; and the potential additional exclusion of the worst ESG-rated issuers.
The firm writes that alongside this new ultra-short duration ETF, it offers a wide range of short-term investment solutions and manages more than EUR 105 billion in money market funds and short duration fixed income products, with sustainability integration across the full range of publicly available funds.
The addition of a US dollar corporate bond SRI strategy marks an important step in the expansion of BNPP AM’s fixed income ETF range. BNP Paribas Easy USD Corp Bond SRI Fossil Free UCITS ETF is designed to replicate the performance of the Bloomberg MSCI US Corporate SRI Sustainable ex Fossil Fuel Bond Index, an investment grade bond index with approximately 3,400 constituents and an average duration of 6.8 years. The index is constructed using MSCI’s sustainability criteria including value-based, controversial sectors and fossil fuel exclusions, and ‘red flag’ ESG controversy exclusions. A minimum MSCI ESG rating of BBB is required for issuer inclusion.
Lorraine Sereyjol-Garros, Global Head of Development for ETFs & Index Funds at BNPP AM comments: “Interest in fixed income ETFs has continued to gain momentum through the course of 2023, building on the strong growth seen last year when assets under management rose by almost one third. We launched our first ESG fixed income ETF in 2019, and have continued to expand our range ever since as we seek to meet growing investor demand for systematic fixed income exposure based on an ESG approach. These two new fossil-free funds offer investors additional asset allocation building blocks targeting low levels of tracking error relative to those of non-ESG benchmarks.”