Paris-based Amundi has expanded its socially responsible investment line-up with the launch of the Amundi Index Euro Corporate SRI 0-3Y – UCITS ETF DR (ECRP3 FP) on Euronext Paris.

Fannie Wurtz, Head of Amundi ETF, Indexing and Smart Beta.

The ETF provides exposure to short-dated euro-denominated corporate bonds from issuers with strong environmental, social and governance (ESG) credentials.

It is linked to the Bloomberg Barclays MSCI Euro Corporate ESG BB+ Sustainability SRI 0-3 Year Index.

The index comprises investment-grade, euro-denominated, fixed-rate bonds with a remaining maturity of between one month and three years and a minimum par amount outstanding of €300 million.

Constituent issuers must also command an MSCI ESG Rating of at least ‘BB’ based on an assessment of the issuer’s exposure to industry-specific ESG risks and its ability to manage those risks relative to peers.

According to MSCI, issuers rated ‘AAA’ and ‘AA’ are leaders at managing the most material ESG risks and should be expected to be more resilient to disruptions arising from ESG events. Issuers rated ‘A’, ‘BBB’ and ‘BB’ tend to have more of a mixed track record of managing those risks but have still passed certain ESG thresholds.

Furthermore, issuers involved in business activities deemed inconsistent with certain values-based criteria, such as activities related to alcohol, tobacco, military weapons, civilian firearms, gambling, adult entertainment, GMO and nuclear power, are also excluded.

The resultant index comprises of over 690 different bonds.

The ETF has debuted on Euronext Paris but is expected to cross-list on other major European stock exchanges. It is offered to investors with a highly competitive ongoing charge of 0.12% per year, which makes it the lowest cost (based on fees) ESG-focused fixed income ETF in Europe.

Its nearest competitor is likely to be seen as the iShares € Corp Bond 0-3yr ESG UCITS ETF (SUSE LN). This fund tracks the Bloomberg Barclays MSCI Euro Corporate 0-3 Sustainable SRI Index and comes with an annual fee of 0.15%. It has accumulated more than €800m in assets since its launch in January 2016.

Commenting on the launch, Fannie Wurtz, Head of Amundi ETF, Indexing & Smart Beta, said, “Having been a pioneer in responsible investment, Amundi continues to expand its SRI offering. This launch demonstrates our commitment to meet the growing investor demand for passive solutions with ESG filters at very competitive prices.”