Alternative Investments: Lyxor Launches Suite of Paris-Aligned Equity ETFs

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The four new ETFs from Lyxor track EU Paris-aligned Benchmarks for climate control goals.

Lyxor Asset Management said in June that ESG ETF inflows were strong over the month of May, with EUR2.4 billion flowing in. That has set up a record for ESG ETFs for the year to date. It showed investors’ rising preference for sustainable investments, amidst global easing of lockdown restrictions and stimulus measures in Europe.

Perhaps addressing the trend, Lyxor announced this week a suite of equity ETFs for investors seeking opportunities in companies that align with climate-related carbon-reduction goals. (ETF Strategy)

Lyxor Paris-Aligned Climate ETFs

The four new ETFs focus on large- and mid-cap stocks within global developed, US, European, and eurozone equity markets.

They track EU Paris-aligned Benchmarks which aim to reallocate capital towards a low-carbon and climate-resilient economy.

These are the S&P Paris-aligned Climate indices for Eurozone, European, US and global equities, which adhere to the Task Force for Climate-related Financial Disclosure (TCFD) and target a global warming increase of 1.5 degrees with “no or limited overshoot.”

Companies involved in controversial weapons and tobacco, embroiled in ESG controversies, or in violation of UN Global Compact principles are excluded. Additionally, companies with significant revenue exposure to the exploration or processing of coal, oil, and natural gas are also removed.

The four ETFs are:

Name of ETF Listing Remarks
Lyxor S&P Eurozone Paris-Aligned Climate (EU PAB) (DR) UCITS ETF (EPAB FP) Euronext Paris in euros Expected to cross-list on Xetra later in July
Lyxor S&P 500 Paris-Aligned Climate (EU PAB) (DR) UCITS ETF Xetra and London Stock Exchange.

 

Lyxor S&P Global Developed Paris-Aligned Climate (EU PAB) (DR) UCITS ETF Expected rollout in September
Lyxor S&P Europe Paris-Aligned Climate (EU PAB) (DR) UCITS ETF Expected rollout in September

Europe taking the lead on climate

Arnaud Llinas, Head of Lyxor ETF & Indexing, commented, “EU climate benchmarks are just one of the ways Europe is taking the lead on climate. At Lyxor, we believe in the power of indices and ETFs to build on data and shift capital at scale towards a climate-neutral economy. With this latest enhancement to our climate ETF ecosystem, we are helping investors take their decarbonization ambitions to the next level as well as adopting an even greener approach through fossil fuel exclusions.”

Reid Steadman, Global Head of ESG Indices at S&P Dow Jones Indices, added, “We are very pleased that Lyxor has selected our S&P Paris-Aligned Climate indices as the underlying benchmarks for its new exchange-traded funds. We’re proud to offer innovative and transparent indices in Europe and globally that help our clients navigate the transition to a low carbon economy, and capture both financial risks and opportunities.”

The previous suite of climate change ETFs

In March Lyxor became the first ETF manager to launch a suite of climate change ETFs. These focused on the objectives of the European Union’s Climate Transition Benchmarks. These benchmarks target an immediate 30% reduction in carbon intensity and a 7% annual emission reduction trajectory.

The four ETFs then launched were the Lyxor MSCI USA Climate Change Ucits ETF (CLUS); Lyxor MSCI EM Climate Change Ucits ETF (CLEM); Lyxor MSCI World Climate Change Ucits ETF (CLWD); and Lyxor MSCI Europe Climate Change Ucits ETF (CLEU).

Related Story: Lyxor’s New Suite of Climate Change ETFs

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