Hong Kong-based CSOP Asset Management has launched a new ETF in Singapore providing low carbon exposure to companies from across the Asia Pacific region.
The ETF provides low carbon exposure to developed and emerging market stocks from across the APAC region.
The CSOP CGS-CIMB FTSE Asia Pacific Low Carbon Index ETF has been listed on Singapore Exchange in Singapore dollars (LCS SP) and US dollars (LCU SP), coming to market with initial assets under management of S$150 million (approx. $100m).
According to CSOP, the fund is the world’s first low carbon ETF with a geographical focus on developed and emerging markets in the Asia Pacific.
The ETF tracks the FTSE Asia Pacific Low Carbon Index ETF which selects its constituents from an initial universe of large and mid-cap stocks across 11 countries in the Asia Pacific region: Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Singapore, and Taiwan.
Violators of UN Global Compact principles as well as firms with significant operations related to controversial weapons, tobacco, or thermal coal are excluded.
The remaining constituents are then initially weighted by float-adjusted market capitalization with the weights then adjusted to increase exposure to companies operating in designated low-carbon industries, firms with lower operational carbon emissions relative to their peers, and entities with lower fossil fuel reserves.
The weighting methodology incorporates a single stock cap of 10% as well as maximum allowable deviations in country or sector weights relative to the parent universe, while any firm with a weight below 0.1% is removed from the index. Reconstitution and rebalancing occur annually in September.
The fund has estimated ongoing charges of 0.86%.
Ding Chen, CEO of CSOP Asset Management, said: “As an award-winning ETF issuer, CSOP confidently introduces this low-carbon themed ETF to Singapore investors, seizing the opportunities presented by this region with the greatest potential for low-carbon economic growth. We look forward to bringing even more cost-effective options for investors to diversify their portfolios.”