Amundi has launched a comprehensive suite of global equity ETFs that deliver targeted single-factor investment strategies while incorporating environmental, social, and governance (ESG) principles.
The ETFs combine targeted single-factor exposures with ESG principles.
The new range provides exposure to four key investment factors – Value, Momentum, Minimum Volatility, and Low Size – offering investors the flexibility to align their portfolios with different market phases based on their convictions.
The value factor targets excess returns by focusing on companies with low prices relative to their fundamental value, while the momentum factor seeks to capitalize on the tendency of companies with strong recent performance to continue outperforming in the near term.
The minimum volatility factor, meanwhile, invests in companies with lower price fluctuations, helping to mitigate downside risk, and the size factor enhances exposure to smaller firms, which may offer greater growth potential compared to larger companies.
The time-varying nature of these factors presents opportunities for investors to enhance returns by tactically rotating in and out of strategies based on market conditions. For long-term investors, maintaining a strategic allocation to these factors could provide a source of outperformance compared to market capitalization-weighted indices.
Benoit Sorel, Global Head of ETF, Indexing & Smart Beta at Amundi, commented: “The launch of this broad and competitive Global ESG Factor ETF range underscores our commitment to innovation in meeting our clients’ evolving needs. We are delighted to offer our clients a flexible tool to seamlessly adjust their portfolio allocations and navigate market cycles, all while integrating responsible considerations.”
Methodology
Each ETF is linked to an index developed by MSCI and based on the MSCI World index universe, comprising large- and mid-cap stocks from 23 developed market countries.
The methodology begins by excluding companies involved in severe ESG controversies or those with activities linked to Controversial Weapons, Nuclear Weapons, Tobacco, Weapons, Thermal Coal, Unconventional Oil and Gas, and Arctic Oil and Gas.
The remaining eligible securities are then weighted using an optimization process designed to maximize exposure to the target factor while controlling for country, sector, and constituent weight deviations relative to the original index.
The optimization also seeks to achieve specific ESG objectives, including a minimum 30% reduction in weighted-average carbon intensity and an improvement in the overall ESG score.
Each ETF comes with an expense ratio of 0.25% and is classified as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR). The ETFs are available for trading on Xetra in euros and the London Stock Exchange in pound sterling.
The ETFs and their corresponding indices are as follows:
Amundi MSCI World Momentum Screened Factor UCITS ETF (Xetra: WMSE GY; LSE: WMSF LN)
Tracks the MSCI World Momentum Select ESG Low Carbon Target Index.
Amundi MSCI World Minimum Volatility Screened Factor UCITS ETF (Xetra: WMMV GY; LSE: WMMX LN)
Tracks the MSCI World Minimum Volatility Select ESG Low Carbon Target Index.
Amundi MSCI World IMI Value Screened Factor UCITS ETF (Xetra: WMMS GY; LSE: WMMT LN)
Tracks the MSCI World IMI Value Select ESG Low Carbon Target Index.
Amundi MSCI World Small Cap CTB Screened UCITS ETF (Xetra: WMFS GY; LSE: WMFT LN)
Tracks the MSCI World Small Cap ESG Broad CTB Select Index.