Stockholm (NordSIP) – At the start of April, Ilmarinen reported it had seeded the Xtrackers MSCI USA Climate Action Equity ETF, which was listed on the NYSE Arca stock exchange. Ilmarinen was the largest investor in the ETF, investing €1.86 billion and making it the largest ETF launch of all time in the USA, according to the Finnish pension fund.
“This fund will cost-effectively provide us with a broad diversification into the best US listed companies in terms of the climate. In addition, the fund supports us in our goal of a carbon-neutral investment portfolio by the end of 2035”, says Ilmarinen’s Chief investment officer Mikko Mursula.
The fund follows the underlying MSCI USA Climate Action Index, a new benchmark which was developed with the participation of Ilmarinen and which focuses on the top 50% of the large and medium-sized listed companies given their performance along climate indicators. According to MSCI, “the MSCI USA Climate Action Index is designed to represent the performance of companies that have been assessed to lead their sector peers in terms of their positioning and actions relative to a climate transition. MSCI Climate Action Indexes use MSCI ESG Business Involvement Screening Research and MSCI Climate Change Metrics to identify companies that are involved in the following business activities such as Controversial Weapons, Tobacco, Thermal Coal Mining, Oil Sands and Nuclear Weapons.”
The top 5 holdings of the ETF, representing over 15% of a AUM included Microsoft, Apple, Amazon, NVIDIA and Alphabet. IT companies represent over 28% of the fund’s holdings, at the time of its launch. The other top 5 sectors included healthcare , consumable (discretionary), communication services and financials. “This is the first ETF on the market to track the new index. With this investment we can manage climate risk, get exposure to transition-related opportunities and align with our climate goals,” Mursula adds.
“As an investor, we at Ilmarinen want to support companies that address climate mitigation and preservation of biodiversity. Sustainability matters to a long-term pension investor so that we can secure retirement assets for decades to come,” says Senior Portfolio Manager Juha Venäläinen.