abrdn has made its ETF debut in Europe with the launch of an actively managed fund providing ESG-screened exposure to real estate markets globally.
The ETF provides active exposure to the global real estate market while screening out the worst ESG offenders.
The Global Real Estate Active Thematics (GREAT) UCITS ETF has been listed on Deutsche Börse in euros (R8T GY) and US dollars (R8TA GY).
The fund is benchmarked against the FTSE EPRA Nareit Developed Index, a globally recognized property benchmark covering real estate investment trusts (REITs) and real estate operating companies listed in developed markets worldwide.
abrdn conducts ESG-related screening on the benchmark universe, removing violators of UN Global Compact principles, State-Owned Enterprises, and issuers with operations linked to weapons, tobacco, thermal coal, oil & gas, and power generation.
The process also harnesses abrdn’s proprietary ESG framework to exclude approximately 20% of the number of issuers from the initial universe with the worst sustainability scores.
The ETF’s active selection process is then based on abrdn’s ‘Real Estate Global HouseView’, a dynamic, multi-dimensional global framework that aims to identify outperforming real estate sectors and segments of the future. The HouseView considers factors such as macroeconomics, thematic trends, capital markets, interest rates, and real estate fundamentals such as supply/demand balance and rent trends. The sectors with superior expected relative returns are then overweighted, while conversely, the strategy reduces exposure to areas of the market that are forecast to underperform.
As of the end of February, securities listed in the US accounted for over half (56.6%) of the ETF’s total weight with the next-largest country exposures being Japan (14.1%), the UK (9.2%), and Germany (3.4%).
Notable positions included prologue (7.2%), equinix (4.0%), PublicStorage (2.9%), Realty Income (2.5%), and Simon Property Group (2.5%).
The ETF comes with an expense ratio of 0.40% and is classified as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
Income is accumulated within the portfolio.