UBS Asset Management has expanded its socially responsible ETF suite on the London Stock Exchange with two new listings offering GBP- and USD-hedged exposure to the all-country world MSCI ACWI SRI 5% Issuer Capped Index. 

Simone Rosti, head of passive & ETF sales Europe at UBS Asset Management.

They are the sterling-hedged UBS MSCI ACWI Socially Responsible hedged GBP UCITS ETF (AWSG LN) and the dollar-hedged UBS ETF (IE) MSCI ACWI Socially Responsible hedged USD UCITS ETF (AWSR LN).

The MSCI ACWI SRI 5% Issuer Capped Index includes large- and mid-cap stocks across 23 developed and 24 emerging market countries, providing broad global equity coverage.

The index is designed to provide exposure to companies with outstanding Environmental, Social and Governance (ESG) ratings in their respective industry peer groups, while excluding companies whose products have negative social or environmental impacts.

The index aims to avoid concentration by capping stocks within the index to a maximum of 5%. The excess weight of the capped stocks is distributed among the remaining constituents in proportion to their free float market capitalization.

Constituent selection is based on research provided by index provider MSCI‘s ESG Research division. After discarding companies involved in nuclear power, tobacco, alcohol, gambling, military weapons, civilian firearms, GMOs and adult entertainment, MSCI selects those companies with above-average ESG ratings for index inclusion while aiming for approximately 25% of the market capitalization in each sector and region of the parent index. Constituents are weighted by float-adjusted market capitalization.

Simone Rosti, head of passive & ETF sales Europe at UBS Asset Management, said: “We have witnessed significant appetite for access to SRI investments over the last year, and are expecting further demand throughout 2018. With these listings, clients can increase their exposure to ESG-screened large and mid-cap stocks across both developed and emerging markets. Clients can also benefit from our currency-hedging product, which has enjoyed significant net inflows in the year to date.”

UBS is one of the leading providers of sustainable ETFs in Europe, with approximately £2 billion invested in its sustainable equity and fixed income offerings, representing a 36% market share. Its equity SRI suite includes funds offering UK, eurozone, US, Japan, developed markets, and emerging markets exposure.

Both new ETFs are physically replicated and charge fees of 0.48%.