Desjardins Global Asset Management (DGAM) has launched two responsible investing ETFs on Toronto Stock Exchange.
The ETFs follow a suite of five responsible investment ETFs introduced by Desjardins in September 2018.
They are the Desjardins RI Emerging Markets Multifactor Low CO2 ETF (DFRE CN) and the Desjardins RI Global Multifactor Fossil Fuel Reserves Free ETF (DRFG CN).
“We are pleased to offer our investors attractive growth potential while supporting the transition to a greener economy,” said Nicolas Richard, Chief Executive Officer of DGAM.
The Desjardins RI Emerging Markets Multifactor Low CO2 ETF provides exposure to emerging market stocks weighted using a multifactor methodology.
The fund is linked to the Scientific Beta Desjardins Emerging RI Low Carbon Multifactor Index, created in partnership with ERI Scientific Beta.
The index filters out stocks that do not meet a minimum environmental, social and governance (ESG) standard. It also screens out companies with significant carbon emissions, thereby reducing the carbon footprint of the index compared to similar non-ESG benchmarks. Those constituents remaining are weighted so as to enhance exposure to six factors: size, valuation, volatility, momentum, profitability, and investment.
The ETF comes with an expense ratio of 0.65%.
The firm’s other new fund, the Desjardins RI Global Multifactor Fossil Fuel Reserves Free ETF (DRFG CN), provides global multifactor exposure while avoiding the traditional energy sector.
The ETF is linked to the Scientific Beta Desjardins Global RI Fossil Fuel Reserves Free Multifactor Index which applies the same minimum ESG screening to a universe of large- and mid-cap stocks (excluding (coal, gas, and oil companies) from developed and emerging markets. Remaining constituents are weighted according to Scientific Beta’s multifactor process.
This fund’s expense ratio is 0.60%.
Both funds complement DGAM’s existing range of low carbon multifactor ETFs, launched in September 2018, which includes funds targeting the Canadian, US, and global developed ex-North America equity universes.