Alternative Investments/ESG: State Street Global Advisors Introduces Paris Aligned Climate ETFs Supported By Early Investor UCLA

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The new ETFs are core equity exposures that may help investors implement net-zero strategies and address climate change in their portfolios.

State Street Global Advisors have launched the SPDR MSCI USA Climate Paris Aligned ETF (NZUS) and SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC) that are intended to help investors achieve their climate ambitions. The ETFs are geared toward the growing number of investors interested in addressing climate change in their portfolios, both to mitigate climate risk and to invest in climate solutions. (BusinessWire)

Early stage commitment from UCLA

“Our sustainability framework encompasses the foundational values and principles that guide our investment decisions,” said Jagdeep Singh Bachher, the University of California’s chief investment officer. “As an early stage investor in these new ETFs, we hope to open the door to others who, like us, believe that clean energy will fuel the world’s future and wish to invest in a decarbonized portfolio to improve the risk and return characteristics of their holdings over longer periods of time. We are excited that these funds are being brought to a broad investor base. We believe that investing in climate solutions, not climate problems, will provide superior risk-adjusted returns.”

Notably, UC Investments, the investments arm of the University of California, began divesting its fossil fuel holdings in 2015 and now its $168 billion portfolio is nearly fossil free.

The University of California is likely to become carbon neutral by 2025.

The impact of climate change

The SPDR MSCI USA Climate Paris Aligned ETF (NZUS) and SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC) will track the MSCI USA Climate Paris Aligned and MSCI ACWI Climate Paris Aligned Indexes, respectively.

NZUS has a gross expense ratio of 0.10%, while NZAC features a ratio of 0.12%.

“Climate change almost certainly will drive significant structural shifts in the global economy, poses new risks to and opportunities for long-term investments, and potentially creates risks to the financial system” said Ron O’Hanley, Chairman & Chief Executive Officer of State Street Corporation.

“Climate change almost certainly will drive significant structural shifts in the global economy, poses new risks to and opportunities for long-term investments, and potentially creates risks to the financial system” said Ron O’Hanley, Chairman & Chief Executive Officer of State Street Corporation.

“The introduction of NZUS and NZAC gives ESG investors more choices on their journey to net zero,” O’Hanley added.

Related Story: HSBC Launches Europe ex UK Sustainable Equity Ucits ETF

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