Lyxor has cross-listed the Lyxor Green Bond UCITS ETF on Nasdaq Stockholm.
The Lyxor Green Bond UCITS ETF has been cross-listed to Nasdaq Stockholm where it trades in Swedish krona.
The ETF is linked to the Solactive Green Bond EUR USD IG Index, offering access to the performance of euro- and dollar-denominated ‘green bonds’ issued by investment-grade companies. To be eligible for index inclusion, bonds must be defined as ‘green’ by the Climate Bond Initiative.
According to this organisation, green bonds are “instruments in which the proceeds will be exclusively applied (either by specifying the use of proceeds, direct project exposure, or securitization) towards new and existing green projects”, with green projects defined as projects and activities that “promote climate or other environmental sustainability purposes.”
The bonds must also meet ongoing transparency and reporting requirements to ensure that proceeds are solely used for low-carbon and climate-enhancing projects.
To be included in the index, bonds must have at least €300m or $300m outstanding for bonds denominated in euros or US dollars, respectively, with a time to maturity of at least 12 months. Floating-rate notes, inflation-linked bonds, convertible bonds, and municipal bonds are excluded from potential selection.
Index components are weighted by market value outstanding, with corporate issuers and government issuers capped at 5% and 10% respectively.
The index currently contains 164 green bonds of which approximately 22% are AAA rated, 27% AA rated, 28% A rated, and 23% BBB rated. The yield to maturity of the index is 1.7%, and its modified duration is 7.5 years. (Data as of 17 January 2019).
The fund debuted in March 2017 on Euronext Paris with the ticker code CLIM FP where it trades in euros. It has since been cross-listed to London Stock Exchange where it trades in pound sterling (Ticker CLIM LN).
The new listing on Nasdaq Stockholm trades in Swedish krona under the ticker LYXGREEN SS.
The ETF comes with a total expense ratio (TER) of 0.25% and has approximately €50 million in assets under management. Income is accumulated.
While Lyxor was the first ETF provider globally to offer a green bond ETF, there has subsequently been similar funds launched in the US by BlackRock and VanEck, while UniCredit has also introduced a green bond ETF in Europe.