UBS Asset Management has launched a new socially responsible equity ETF targeting companies listed in developed market countries across the Asia Pacific region, excluding Japan.
UBS offers a comprehensive suite of ESG-tailored equity ETFs.
The UBS MSCI Pacific ex Japan Socially Responsible UCITS ETF (BCFB GY) has been listed on Deutsche Börse Xetra in euros.
The fund is linked to the MSCI Pacific ex Japan IMI Extended SRI Low Carbon Select 5% Issuer Capped Index which applies strict screening including norms-based, values-based, and climate-related exclusions, as well as a best-in-class ESG selection approach, to the parent MSCI Pacific ex Japan IMI Index.
The parent index consists of 486 companies across four of the five developed market countries in the Asia Pacific region, excluding Japan, capturing 99% of the float-adjusted market capitalization in each country.
Firms embroiled in severe ESG-related controversies as well as those involved in nuclear power, tobacco, alcohol, gambling, military weapons, civilian firearms, GMOs, adult entertainment, fossil fuels, and oil & gas are removed.
To factor in a low carbon approach, the parent index constituents are ranked by carbon emissions and the top 10% of securities, by number, are removed.
Following the above screening steps, the remaining constituents are assigned ESG scores between AAA and CCC based on MSCI ESG Research’s evaluation of the most relevant ESG factors by industry and risk exposure. Stocks with ESG ratings below A (equivalent to higher average) are also eliminated.
The methodology then selects the companies with the highest ESG ratings that make up 25% of the market capitalization in each GICS-defined sector of the parent universe. Constituents are weighted by float-adjusted market capitalization, subject to a 5% cap per security.
The ETF comes with an expense ratio of 0.38% and is classified as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
UBS offers a further ten ETFs harnessing MSCI’s ‘SRI’ methodology including global, global developed, global developed small-cap, US, eurozone, UK, Switzerland, Japanese, Asia Pacific, and emerging market funds.