Amundi has made changes to two ETFs providing exposure to North American and European equities, switching the funds to new indices incorporating sustainability criteria.
The funds
Following the transition, the funds have been renamed to better reflect their enhanced environmental, social, and governance (ESG) profiles.
North America
The Amundi Index MSCI North America ESG Broad CTB UCITS ETF offers access to hundreds of US and Canadian companies with the most climate-friendly business operations while integrating additional ESG considerations.
The fund is linked to the MSCI North America ESG Broad CTB Select Index which begins with a universe of large and mid-cap stocks listed in the US and Canada.
The methodology removes companies embroiled in severe ESG and environmental controversies as well as firms with business operations in controversial weapons, tobacco, thermal coal, oil sands, nuclear weapons, and arctic oil & gas.
The index then selects and weights its constituents from the remaining universe using an optimization process that seeks to satisfy various ESG-related objectives while maintaining a tracking error relative to its initial universe of less than 0.75%.
The objectives include a minimum 30% reduction in total carbon emissions, a minimum 30% reduction in potential emissions, and an annualized 7% decarbonization trajectory going forward. The process also seeks to maximize the overall ESG score of the index.
The ETF houses €2.4 billion in assets, making it the largest of any European UCITS ETF tracking an ESG-tailored North American equity index.
The fund comes with an expense ratio of 0.15% and is classified as an Article 9 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
It is listed on London Stock Exchange in US dollars (NRAU LN) and pound sterling (NRAM LN), on Euronext Amsterdam in US dollars (NAMU NA), and on Xetra (DNRA GY), Euronext Paris (NRAM FP), and Borsa Italiana (NRAM IM) in euros.
Europe
The Amundi MSCI Europe ex Switzerland ESG Leaders UCITS ETF offers sector-diversified exposure to the highest ESG-scoring companies from developed markets in Europe, excluding Switzerland.
The fund is linked to the MSCI Europe ex Switzerland ESG Leaders Select 5% Issuer Capped Index which similarly begins with an initial universe comprising large and mid-cap stocks from its target region.
The methodology first excludes companies with business activities in the alcohol, tobacco, gambling, nuclear power, and weapons industries as well as firms that are embroiled in severe ESG-related controversies.
The remaining constituents are then assigned an ESG score between AAA and CCC based on the most relevant ESG factors by industry and risk exposure. The rating process aims to identify ESG leaders and laggards within each industry.
The index selects the securities with the highest ESG scores while targeting a 50% sector representation versus the initial universe. Firms with ratings below BB (lower average) are not eligible for inclusion.
The selected constituents are weighted by float-adjusted market capitalization subject to a single issuer cap of 5%.
The fund is the sole ETF in Europe to provide ESG-tailored exposure to equities in the Europe ex-Switzerland universe. It is listed on SIX Swiss Exchange (CS9 SW) and Euronext Paris (CS9 FP) in euros and houses $300 million in assets.
The ETF comes with an expense ratio of 0.15% and is classified as an Article 8 product under SFDR.