Alternative Investments/ESG: UBS Launches New “Climate Aware” ETF

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The new ETF is focused on delivering low carbon exposures to investors.

The UBS Climate Aware Global Developed Equity CTB UCITS ETF provides investors with access to large- and mid-cap global stocks that have a strong climate-positive profile, are compliant with UBS’ Climate Aware framework, and tilt towards the global transition to a low carbon economy.

According to ETFStrategy, which cited research from Cerulli Associates, investors are likely to favor ETFs with portfolios that eliminate fossil fuels or are geared towards minimum carbon intensity.

UBS Climate Aware Global Developed Equity CTB UCITS ETF

  • Listed on SIX Swiss Exchange (CLIMA SW) in US dollars
  • Tracks the Solactive UBS Climate Aware Global Developed Equity CTB Index
  • Index Universe – large and mid-cap developed market equities
  • Index Exclusions – Negative industries such as tobacco, controversial weapons, and military armaments, and those that are exposed to production and energy generation from thermal coal and oil sands
  • A climate score determines “climate leaders” and “climate laggards”
  • The laggards are removed from the index, while the leaders have their market capitalization weight increased by a factor of 130%
  • The resulting index actually achieves a 41% reduction in carbon intensity and a reduction of potential future emissions of 92% relative to its parent index
  • It complies with the EU Climate Transition Benchmark minimum requirements and seeks to limit temperature increase by 2050 to 1.8°C.
  • An expense ratio of 0.19%

Barry Gill, head of investments at UBS AM, said: “Investors are growing more aware of the effects climate is having on their portfolios. By providing innovative products, such as the UBS Climate Aware ETF, we can enable clients to align their investments with their de-carbonization goals.”

Timo Pfeiffer, chief markets officer at Solactive, added: “With UBS’s new Climate Aware ETF, investors obtain an effective tool to meet their climate and decarbonization goals. With its 1.8°C target, the ETF operates under the 2°C degree threshold, making it not only future-proof but also a viable investment opportunity contributing to a greener future.”

Related Story:  New ETF From UBS For Exposure To Swiss Equity + ESG

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