Liquid Alternatives: Lyxor’s New Suite of Climate Change ETFs

The ETFs are “the first of their kind in Europe.”

French asset manager Lyxor is the first ETF manager to launch a suite of climate change ETFs. These focus 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. (funds europe)

The MSCI Climate Change indices, which launched in November, are designed to meet the EU’s Climate Transition Benchmarks for a reduction in carbon intensity and annual emission targets. Further, the indices reallocate capital to sectors and companies that decarbonize more successfully.

The suite of ETFs will invest in European, US, emerging market and world equities. They will use the said MSCI Climate Change indices.

The Lyxor Climate Change ETFs

The four ETFs are 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).

However, the expense ratios on these ETFs are from 0.25% to 0.30% respectively.

ETF managers to join fight against climate change

Arnaud Llinas, head of ETF and indexing, said: “By revising its investment benchmark regulations, the EU has assigned passive, rules-based investment managers a key role in the fight against climate change. ETF providers have the opportunity, and indeed the responsibility, to help shift the trillions by offering simple, transparent products which meet the requirements of the new regulation.”

Further, according to Arnaud Llinas, ETF providers must take up their responsibility towards climate change by refocussing investors’ trillions of dollars in line with the new regulations.

Related Story: Liquid Alternatives: Lyxor Launches High Yield Bond ETFs With ESG Exposure

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May 21, 2020

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