UBS Launches New ESG ETF


Stockholm (NordSIP) – UBS Asset Management (UBS AM) announced it would launch the first ETF to integrate sustainability screening into the S&P 500 Index, the UBS ETF S&P 500 ESG UCITS ETF.

The new ETF is the result of a license agreement, in Europe, between UBS Asset Management and S&P DJI regarding the recently launched S&P 500® ESG Index. This index targets 75% of the traditional S&P 500’s market capitalisation at the industry level. It is aligned with ESG selection guidelines and designed to closely replicate the risk and return profile of its most iconic benchmark. The fund excludes specific non-sustainable sectors, companies going through controversial scandals, and of the remaining, those with low ESG ratings.

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“UBS aims to be the world’s leading sustainable financial provider by developing innovative products to meet the evolving needs of our clients. We are very pleased to have joined forces with S&P Dow Jones Indices and SAM to create a new generation of ETFs, built upon the most widely-tracked U.S. equity index, enabling clients to align their investments with their ESG goals,” said Ulrich Koerner, President at UBS Asset Management on the occasion of the S&P 500 ESG index fund.

The UBS ETF S&P 500 ESG UCITS ETF comes in four share classes: US Dollar, hedged to Swiss Franc, hedged to euro and hedged to Great British pound. Fees range from 0.12% to 0.22%.

“As the market leader in Sustainability ETFs, this new product is the result of close collaboration between UBS Asset Management and S&P Dow Jones Indices,” explained Clemens Reuter, Head of ETF & Passive Investment Specialists. “We have pioneered a new generation of Sustainability ETFs, offering a core ESG exposure based on the largest and most important equity index globally.”

This fund combines the liquidity of the S&P 500 index with the rising appeal of sustainable investments. According to the press release by UBS, the ETF market for S&P 500 UCITS ETFs in Europe is approximately US$ 100 billion. Moreover, the ESG/SRI segment is the fastest growing theme in UCITS ETFs, now approaching US$ 15 billion in assets, as regulators and asset owners increasingly demand that asset managers integrate ESG considerations in investment decisions.

“UBS’s goal is to be the world’s leading sustainable financial provider by developing innovative products and solutions to meet the evolving needs of our clients,” added Michael Baldinger, Head of Sustainable & Impact Investing.

UBS plans to launch a new ETF during the second week of April.

Picture from Pixabay

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In the current economic environment, even the strongest companies will face challenges from the impact of the COVID-19 pandemic. Perhaps now more than ever, understanding the factors that could have a material impact on a company’s sustainability will play a role in investment decision-making.

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