Amundi has revealed plans to expand its environmental, social and governance (ESG) product suite with the transition of six regular fixed income ETFs, collectively housing over €3.3 billion in assets, into equivalent ESG exposures in the coming weeks.
Fannie Wurtz, Head of Amundi ETF, Indexing and Smart Beta.
Five of the funds target segments of the euro corporate bond market including broad maturity, short-term floating, financials, lower medium grade, and high yield.
The sixth provides access to floating-rate corporate bonds issued in US dollars.
The ETFs will adopt new indices, maintained by Bloomberg or IHS Markit, which harness insights from MSCI to exclude issuers based on certain ESG concerns.
While the exclusions vary slightly according to index, the methodologies typically remove companies involved in certain controversial industries, such as tobacco, alcohol, weapons, adult entertainment, gambling, thermal coal, and oil sands, as well as companies embroiled in severe ESG-related controversies or in violation of international norms. The indices also generally remove issuers that score poorly according to MSCI’s proprietary analysis of a firm’s ESG performance.
All of the transitioned ETFs will be classified under Article 8 of the EU’s Sustainable Finance Disclosure Regulation (SFDR).
The funds complement Amundi’s existing sustainable fixed income line-up which includes ultra-short and Paris-aligned euro corporate exposures as well as funds targeting the broad euro aggregate and fixed-rate US corporate bond markets.
Fannie Wurtz, Head of Amundi ETF, Indexing, and Smart Beta, said: “ESG is at the centre of all of our client conversations and at the core of our product development strategy. Today, every new product is systematically considered through an ESG lens, and we also continually assess the interest in transitioning to ESG exposures in line with investors’ expectations.”
The ETFs involved are as follows:
The €700m Amundi Euro Corporates UCITS ETF will switch from the Markit iBoxx Euro Liquid Corporates Top 75 Mid Price TCA Index to the Bloomberg Barclays MSCI Euro Corporate ESG Sustainability SRI Index.
The €870m Amundi Floating Rate Euro Corporate 1-3 UCITS ETF will switch from the Markit iBoxx EUR FRN IG 1-3 Index to the iBoxx MSCI ESG EUR FRN Investment Grade Corporates Index.
The €110m Amundi Euro Corporate Financials iBoxx UCITS ETF will switch from the Markit iBoxx Euro Liquid Corporates Top 75 Mid Price TCA Financials Index to the iBoxx MSCI ESG EUR Financials TCA Index.
The €240m Amundi BBB Euro Corporate Investment Grade UCITS ETF will switch from the Markit iBoxx EUR Liquid Corporates BBB Top 60 Index to the iBoxx MSCI ESG EUR Corporates BBB TCA Index.
The €350m Amundi Euro High Yield Liquid Bond iBoxx UCITS ETF will switch from the Markit iBoxx EUR Liquid High Yield 30 Ex-Financial Index to the iBoxx MSCI ESG EUR High Yield Corporates TCA Index.
The €1.06bn Amundi Floating Rate USD Corporate UCITS ETF will switch from the Markit iBoxx USD Liquid FRN Investment Grade Corporates 100 Index to the iBoxx MSCI ESG USD FRN Investment Grade Corporates TCA Index.