Alternative Investments/ESG: A New UK Sustainable Equity UCITS ETF From HSBC
The ETF offers investors exposure to stocks with a low carbon footprint and positive ESG.
HSBC Global Asset Management launched earlier this month the HSBC UK Sustainable Equity UCITS ETF. Trading on the London Stock Exchange, the ETF is an extension of HSBC GAM’s range of sustainable ETFs.
It comes with a total expense ratio of just 0.12%. The ETF, therefore, offers a highly cost-efficient solution to invest in UK equities with a sustainable slant. (ETF Strategy)
HSBC UK Sustainable Equity UCITS ETF
This ETF is the first UK sustainable equity ETF with a reduced carbon target. It tracks the FTSE UK ESG Low Carbon Select Index, an index developed in partnership with FTSE Russell and derived from its FTSE UK Index stock universe.
It seeks to achieve both a 50% reduction in carbon emissions and fossil fuel reserve intensity. As well, a 20% boost in ESG rating, all relative to the parent universe, subject to other factors. The index has an additional 10 – 20% underweight to oil and gas to target a reduced exposure to that sector.
The customization of the index means that it has only 64 names versus the 119 in the parent FTSE UK index universe. However, it makes up by constructing a more attractive ESG focus and a lower carbon footprint.
The ETF is denominated in GBP.
Commenting on the launch, Olga De Tapia, Global Head of ETF Sales at HSBC Global Asset Management, said: “We’re pleased to offer our clients the first UK sustainable equity ETF with a reduced carbon target. As the latest addition to our sustainable equity ETF range, it will enable investors to tap into UK companies that are transitioning to a more sustainable future.”
HSBC Global Asset Management managed assets worth US$ 525 billion as of 30 June 2020.
HSBC is one of the world’s largest banking and financial services organizations with assets of US$ 2,923 billion as of the same date.
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