UBS Asset Management has introduced a new Japanese yen-hedged share class for the UBS MSCI ACWI ESG Universal UCITS ETF on SIX Swiss Exchange, providing JPY-referenced investors currency-hedged exposure to global stocks with high environmental, social, and governance (ESG) standards
The new share class offers a currency hedge between the index’s developed market currency exposures and the Japanese yen.
The underlying reference for the fund is the MSCI ACWI ESG Universal 5% Issuer Capped Index, which includes large and mid-cap securities across 23 developed market and 24 emerging market countries.
The index is designed to select only those constituents demonstrating both a robust environmental, social, and governance (ESG) profile and a positive trend in improving that profile.
Company data is evaluated by MSCI ESG Research, a division of MSCI, which assigns each company an initial ESG-related score.
The index is constructed in the following steps. First, the stocks with the weakest ESG profiles are excluded.
Second, firms’ initial ESG scores are re-weighted to reflect an assessment of both their current ESG profile as well as the trend in that profile.
Finally, the securities are reweighted from the free-float market cap weights of the parent MSCI ACWI Index, using the combined ESG score.
The index is reviewed in February, May, August and November, coinciding with the quarterly and semi-annual index review of the MSCI ACWI.
The new share class trades under the ticker AWESGJ SW and has a total expense ratio (TER) of 0.48%.
Once a month, the ETF will enact a full currency hedge of all its developed market currency exposures relative to the Japanese yen. Emerging market currencies, which account for approximately 10% of the total exposure, are left unhedged.
The latest listing further builds out the currency-hedged offering on the ETF with hedging relative to the US dollar (AWESGW SW), euro (AWESGE SW), and Swiss franc (AWESGS SW) already available. Each also has a TER of 0.48%.