Amundi has unveiled a new European equity ETF targeting companies that are leading their sector peers in their approach to the climate transition.
Gaëtan Delculée, Head of Amundi ETF, Indexing and Smart Beta Sales at Amundi.
The Amundi MSCI Europe Climate Action UCITS ETF (AE5B GY) has been listed on Deutsche Börse Xetra in euros.
The fund’s launch has been supported by an initial investment of more than €500 million from Ilmarinen, Finland’s largest private earnings-related pension insurance company.
Gaëtan Delculée, Head of Amundi ETF, Indexing and Smart Beta Sales at Amundi, said: “We are pleased that Ilmarinen has partnered again with Amundi with this initial investment of over €500 million. Both organizations have a history of responsible investing and engaging constructively with companies in the climate transition. We are proud to expand our ETF offering with a broad exposure to companies taking real action to protect our common future.”
Methodology
The fund tracks the MSCI Europe Climate Action Index which is based on the parent MSCI Europe universe of large and mid-cap stocks from 15 developed market countries in Europe.
The methodology first screens out companies embroiled in severe ESG-related controversies as well as firms with business activities linked to controversial and nuclear weapons, tobacco, thermal coal, and oil sands.
Additionally, firms with very high carbon emissions or potential carbon emissions (those that rank in the worst 5% of the global MSCI ACWI universe), as well as companies that are deemed to be taking a poor approach to key issues related to climate change (those that rank in the worst 25% of their GICS sector) are excluded.
The remaining securities are then assigned ‘Climate Transition’ scores derived from four metrics: carbon emissions intensity, emissions reduction commitments, climate risk management strategies, and revenue from greener businesses.
The index selects 50% of the number of securities from each sector of the parent universe, choosing those with the highest Climate Transition scores.
Constituents are weighted by float-adjusted market capitalization subject to an individual security cap of 5%. Additionally, any individual GICS sector is not allowed to deviate by more than 5% from its weight in the parent universe.
The index is reviewed semi-annually with buffer rules helping to limit unnecessary turnover.
As of the end of May, stocks from France and the UK each accounted for approximately one-fifth of the index’s total weight with the next-largest country exposures being Switzerland (16.1%), Germany (10.8%), and the Netherlands (8.1%).
The index’s sector allocation was led by health care (20.5%), financials (17.0%), industrials (15.8%), consumer discretionary (11.3%), and information technology (9.6%).
Notable positions included ASML (4.7%), Novo Nordisk (4.3%), LVMH Moet Hennessy (3.9%), Astra Zeneca (3.6%), and Roche (3.6%).
The ETF comes with an expense ratio of 0.09% and is classified as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).