HSBC Global Asset Management has cross-listed a batch of sustainable equity ETFs on SIX Swiss Exchange.
The ETFs provide exposure to companies with low carbon emissions and strong ESG profiles.
The funds are linked to FTSE Russell ESG Low Carbon Select Indexes that provide exposure to companies with low carbon emissions and strong environmental, social, and governance (ESG) credentials.
Five ETFs have been cross-listed in total, providing exposure to global developed, US, European, Japanese, and Asia Pacific ex-Japan equity markets.
Each fund is physically backed and comes with an expense ratio ranging between 0.12% and 0.25%.
Index methodology
The methodology is applied to FTSE Russell’s broad market benchmark universes FTSE Developed World, FTSE USA, FTSE Developed Europe, FTSE Japan, and FTSE Asia Pacific ex-Japan that incorporate large- and mid-cap stocks within their respective geographic region.
Firms that do not fully comply with the UN Global Compact, as well as companies with any involvement in controversial weapons and tobacco, are eliminated. In addition, companies with material operations in conventional weapons (as measured by more than 10% of total revenue), coal (10%), and nuclear power (25%) are also excluded.
The remaining constituents are then weighted using an optimization algorithm that seeks to boost the indices’ ESG score (based on company ESG ratings provided by Sustainalytics) by 20%, reduce total carbon emissions intensity by 50%, and reduce fossil fuel reserves by 50%.
This triple-tilt optimization approach also takes into consideration country and sector neutrality, within set bands, relative to the parent universes.
The indices are reconstituted annually in September and rebalanced quarterly.
The funds
The HSBC Developed World Sustainable Equity UCITS ETF (USD – HSWD SW) tracks the FTSE Developed ESG Low Carbon Select Index and comes with an expense ratio of 0.18%.
The HSBC USA Sustainable Equity UCITS ETF (USD – HSUD SW) tracks the FTSE USA ESG Low Carbon Select Index and comes with an expense ratio of 0.12%.
The HSBC Europe Sustainable Equity UCITS ETF (EUR – HSEU SW) tracks the FTSE Developed Europe ESG Low Carbon Select Index and comes with an expense ratio of 0.15%.
The HSBC Japan Sustainable Equity UCITS ETF (USD – HSJD SW) tracks the FTSE Japan ESG Low Carbon Select Index and comes with an expense ratio of 0.18%.
The HSBC Asia Pacific ex-Japan Sustainable Equity UCITS ETF (USD – HSXD SW) tracks the FTSE Asia Pacific ex-Japan ESG Low Carbon Select Index and comes with an expense ratio of 0.25%.