BNP Paribas Asset Management has cross-listed the BNP Paribas Easy ECPI Circular Economy Leaders UCITS ETF on Deutsche Börse Xetra.
The fund provides exposure to firms that seek to recover and regenerate products and materials at the end of each service life.
The fund, which first launched on Euronext Paris at the end of May, invests in companies that ascribe to the so-called ‘circular economy’ business model.
A circular economy aims to keep resources in use for as long as possible, extracting the maximum value from them whilst in use, before recovering and regenerating products and materials at the end of each service life.
The system contrasts to the traditional linear economy where resources and products are disposed of once they have been used.
This difference in approach is often characterized by proponents as “Reduce-Reuse-Recycle” versus “Take-Make-Dispose”.
The fund is linked to the ECPI Circular Economy Leaders Equity Index, an index created by Milan-headquartered ESG indexing and research group ECPI.
The index selects constituents from the universe of global developed market stocks with market capitalizations greater than €500 million and average daily traded values of at least €5m. Companies involved in armaments or tobacco production are removed.
The index selection process screens the remaining universe according to ECPI’s proprietary ranking methodology which considers key ESG issues faced by firms relative to their industry. Companies that do not receive a positive rating are eliminated. The universe is further screened to include only those firms that ECPI has determined operate with a circular economy business model, typically fitting into one of the following five themes: circular supplies; resource recovery; product life extension; sharing platforms; and product as a service.
The 50 largest stocks are selected to form the final index while accounting for sector constraints to limit deviations relative to the universe. The index is equally weighted and rebalanced semi-annually in January and July.
Over half (55.3%) of the index is exposed to stocks listed in the US with the next largest country exposures being Japan (15.1%), France (13.0%) and The Netherlands (4.5%). Index weights are fairly evenly distributed between the information technology (23.1%), consumer discretionary (21.9%), consumer staples (19.7%), and industrials (19.1%) sectors.
The fund, which comes with an expense ratio of 0.30%, will trade on Xetra in euros under the ticker EMEC GR.