Ossiam has launched a new global equities ETF targeting socially responsible companies with robust fundamental characteristics.
The ETF applies a quantitative investment approach to a global universe of socially responsible equities.
The Ossiam Barclays Quantic Global E UCITS ETF (BQGE GY) has been listed on Xetra in euros, coming to market with €40 million in initial assets under management.
The fund is linked to the Barclays Quantic Global E Index which was developed by Barclays in partnership with Quantic Financial Solutions, a Vienna-based analytics provider of risk and corporate intelligence solutions. The index is independently calculated and maintained by Solactive.
Beginning with an initial universe of developed market stocks, the index utilizes insights from ESG analytics firm Sustainalytics to exclude proven violators of UN Global Compact principles as well as companies involved in controversial industries such as weapons, tobacco, and oil & gas.
The methodology also removes all firms that sit in the bottom 50% of their respective industries when ranked by Sustainalytics’ proprietary score capturing industry-specific ESG risks.
The remaining stocks are then assigned fundamental scores based on Quantic’s algorithmic engine which uses over 10 billion data points in its global data set. The system covers a diverse range of fundamental metrics related to corporate balance sheets and macroeconomic conditions, as well as firms’ price trend behaviors.
The index includes the 70 companies with the highest fundamental scores, selecting 50 from within North America and 20 from the rest of the developed world. Constituents are equally weighted, and the index is reconstituted and rebalanced every two months.
As of mid-August, nearly two-thirds (65.3%) of the index weight was allocated to US-listed stocks with the next-largest country exposures being Japan (5.5%), Canada (5.2%), France (5.0%), and the UK (3.7%).
Stocks from the information technology sector made up a third (33.0%) of the total allocation with notable exposure also to companies classified within health care (16.5%), consumer discretionary (14.9%), and industrials (10.7%) sectors.
The ETF comes with an expense ratio of 0.70% and is classified as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
Dividends are accumulated within the fund.