Alternative Investments/ESG: New Sustainable Small Cap ETF From UBS

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The ETF will invest in companies selected from the MSCI World Small Cap universe.

The new UBS ETF (IE) MSCI World Small Cap Socially Responsible UCITS ETF from UBS Asset Management offers investors exposure to companies having strong sustainability profiles and covered by the MSCI World Small Cap SRI Low Carbon Select 5% Issuer Capped universe. (Investment Week)

UBS ETF (IE) MSCI World Small Cap Socially Responsible UCITS ETF

From the universe of the MSCI World Small Cap index, the highest ESG-rated stocks within each sector would be selected to create the new MSCI World Small Cap SRI Low Carbon Select 5% Issuer Capped index. The index is designed to represent the performance of companies that have lower carbon exposure than that of the broad market and have high Environmental, Social and Governance (ESG) performance.

The objective would be to achieve a 25% market cap coverage of the MSCI World Small Cap index.

Applying an SRI methodology, the ETF would apply screening that will ensure norms-based exclusions (e.g. UNGC violations), values-based exclusions (e.g. tobacco, controversial weapons) as well as climate-related exclusions (e.g. thermal coal, oil & gas, highest emitters).

The ETF would qualify as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).

The ETF charges fees of 0.23% and will be listed across key European exchanges, including LSE, Xetra, Borsa Italiana and SIX Swiss Exchange.

Clemens Reuter, Global Head of ETF & Index Fund Client Coverage at UBS Asset Management, said: “Sustainability is a key focus area for UBS AM and over the past 10 years we have built a strong track record of managing SRI ETFs. This latest solution provides investors with the opportunity to gain global developed small cap exposure, together with a strong sustainability profile.”

Related Story: UBS Launches Low Carbon Equity ETFs

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