Amundi has expanded its suite of sustainability-focused ETFs with the launch of a new fund focused on Asian emerging market equities.
The fund is the ninth Amundi ETF to track an MSCI ‘SRI Filtered’ index.
The Amundi Index MSCI EM Asia SRI UCITS ETF (SADA GY) has been listed on Xetra and comes with an expense ratio of 0.25%.
Fannie Wurtz, Head of Distribution & Wealth Division & Head of Amundi ETF, Indexing & Smart Beta, said: “We are convinced that ETFs play an important role in democratizing ESG. With this latest addition to our range, we are empowering all investors to cost-effectively integrate ESG in their portfolios.”
Methodology
The fund is linked to the MSCI EM Asia SRI Filtered ex Fossil Fuels Index which selects its constituents from an initial universe of large and mid-cap stocks listed in nine Asian emerging market countries – China, India, Indonesia, Korea, Malaysia, Pakistan, Philippines, Taiwan, and Thailand.
The index methodology applies various climate change and values-based exclusions before utilizing a ‘best-in-class’ selection approach to determine constituents.
Companies involved in controversial weapons, civilian firearms, tobacco, adult entertainment, alcohol, gambling, genetically modified organisms, nuclear power, and fossil fuels, as well as those embroiled in severe ESG-related controversies, are all removed from the selection pool.
Using insights from MSCI ESG Research, the remaining constituents are then assigned an ESG score between AAA and CCC based on the most relevant ESG factors by industry and risk exposure. Stocks with ESG ratings below BBB (equivalent to average) are not eligible for selection.
The methodology then selects the companies with the highest ESG ratings that make up 25% of the market capitalization in each GICS-defined sector of the initial universe. Constituents are weighted by float-adjusted market capitalization, subject to a 5% cap per security.
Approximately one-third (35.4%) of the index is allocated to stocks from China with another quarter (23.1%) dedicated to stocks listed in Taiwan. Other notable country exposures include Korea (16.8%) and India (12.5%).
Consumer discretionary and financials lead the sector allocation with weights of 25.0% and 21.3%, respectively, followed by communication services (11.3%), health care (10.0%), and consumer staples (8.4%).
Notable positions include NIO, Wuxi Biologics, Taiwan Semiconductor, and Naver, each accounting for a weight of roughly 5%.
Amundi offers a further eight ETFs harnessing MSCI’s ‘SRI Filtered’ methodology including funds targeting global developed, US, European, eurozone, UK, Japanese, Asia Pacific ex-Japan, and global emerging market equities.
All nine ETFs are classified as Article 8 under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).