Stockholm (NordSIP) – For the first time, a European ETF focused on ESG investing has passed the € 1 billion mark of assets under management. This feat was achieved by the UBS ETF (LU) MSCI World Socially Responsible UCITS ETF, which was launched in 2011. The ESG ETF exceeded EUR 1.23 billion in July 2019, according to Bloomberg data quoted by UBS.
UBS’s ESG ETF tracks the MSCI World Socially Responsible 5% issuer capped TRN index, which includes companies that represent the top quartile on ESG criteria, according to the index’s methodology. The ESG ETF has a total expense ratio of 0.25% and covers companies in 23 countries. It applies a 5% cap on any one issuer in order to maintain a wide basket of stocks necessary for the maintenance of a diversified portfolio.
“This milestone represents a further confirmation of our commitment to meet the increasingly sophisticated needs of investors,” commented Florian Cisana, head Passive & ETF Specialist Sales Strategic Markets EMEA Management. “We want to continue to stay at the forefront in developing innovative products and solutions for our clients, helping them to align their investments and ESG goals.”
In a recent review of the sustainable investment industry in Europe, Morningstar noted that UBS continues to dominate sustainable ETFs in terms of AUM. According to data from ETFGI quoted by UBS, at the end of June 2019, UBS ETFs was a market leader in ESG/SRI ETFs with approximately 34% of market share in Europe.
Equity ESG ETF instruments remain investors’ preferred choice, representing 84% of total assets. However, the fixed income sector is gaining momentum with large inflows in the past 12 months, leading to a doubling of assets to € 2.8 billion.