Amundi launches socially responsible US corporate bond ETF

May 30th, 2018 | By | Category: Fixed Income

Amundi has launched the Amundi Index US Corp SRI – UCITS ETF (UCRP FP) on Euronext Paris, providing exposure to US dollar-denominated corporate bonds while applying environmental, social and governance (ESG) selection filters.

Fannie Wurtz, managing director at Amundi ETF, indexing & smart beta

Fannie Wurtz, managing director at Amundi ETF, indexing & smart beta.

The fund tracks the Bloomberg Barclays MSCI US Corp SRI Total Return Index, composed of investment grade corporate bonds excluding issuers involved in alcohol, tobacco, military weapons, gambling, adult entertainment, GMO and nuclear power.

The methodology also excludes any issuer with a “Red” MSCI ESG Impact Monitor score, which measures an issuer’s involvement in major ESG controversies and how well they adhere to international norms and principles.

Constituents are weighted by market value outstanding, and the fund tracks the index through physical replication, meaning it holds the underlying bonds of the index.

According to Amundi, the ETF has been introduced as a direct response to the growing demand for ESG criteria integration from investors who, along with being more ethically conscious, believe that ESG factors could potentially impact a company’s financial performance.

Fannie Wurtz, managing director at Amundi ETF, indexing & smart beta, commented, “This exciting expansion to Amundi’s ETF fixed income range underlines our commitment to deliver passive solutions for our clients that are in-line with their social responsibility goals. As the first asset manager to sign the UN Principles for Responsible Investment (PRI), we believe the potential of socially responsible investments will continue to grow in the future, and we are committed to offering the relevant bond and equity tools adapted to these new requirements.”

The ETF has a total expense ratio (TER) of 0.16%.

Fixed income ETFs that utilize ESG are relatively sparse in Europe, although many analysts believe this will be a significant area of growth for the industry in the future. Investors who wish to access this space may also consider similar funds offered by UBS ETFs. The range also tracks Bloomberg Barclays indices and includes funds tracking bonds from US or eurozone corporate issuers.

The UBS Bloomberg Barclays MSCI US Liquid Corporates Sustainable UCITS ETF (UC97 LN) invests in US dollar-denominated investment grade securities issued by US firms with an MSCI ESG rating of BBB (average) or higher. Launched in July 2015, the fund has assets under management of $120 million and a TER of 0.20%.

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