Ossiam had launched a low carbon and environmental, social and governance (ESG) version of its existing existing Ossiam Shiller Barclays CAPE US Sector Value ETF.
The new fund was listed this week on the London Stock Exchange after listing earlier in the month on the Deutsche Borse’s Xetra exchange.
The Ossiam ESG Low Carbon Shiller Barclays CAPE US Sector ETF aims to deliver a risk/return profile similar to the existing Shiller Barclays CAPE US Sector Value index, but with a significantly reduced carbon footprint and improved ESG profile.
Ossiam said the low carbon ESG fund was launched in response to investor demand to improve their climate impact and ESG-related exposure. It features a TER of 0.85 percent.
The original Ossiam Shiller Barclays CAPE US Sector Value strategy currently has €1.31bn in assets under management as of the end of May.
Bruno Poulin, Ossiam’s chief executive, said, “We expanded on our existing ETF with ESG and low carbon criteria since they can play a significant part in creating long-term equity value and enhance the contribution of the Shiller CAPE ratio. We see the revised strategy as likely to deliver sustainable positive returns while meeting greater demand for investment funds satisfying ethical standards.”
Commenting on the launch, Professor Robert Shiller said of the ESG focus that “investing no longer has to be a sacrifice for morality.”
“With this new fund it can serve as both a key component of a portfolio as well as investing in companies that do good for society.”
Ossiam said the enhanced strategy starts by removing companies in specific businesses, such as controversial weapons, tobacco and coal, companies that undergo severe controversies, and companies in breach of the ten principles of the UN global compact.
It added that the strategy incorporates publicly-available exclusion lists offered by large, highly-regarded Scandinavian institutional investors.
With the remaining stocks, the strategy selects the portfolio that mimics the financial behaviour of the index and minimises the expected tracking error. The carbon footprint reduction is three-fold with 40% reductions of greenhouse gas emissions, total greenhouse gas emissions from reserves and the carbon intensity of the strategy compared to the original index.
Last week, Ossiam announced the appointment of Antonio Celeste as head of ESG business development and sales director. Celeste was recently institutional relations director for Europe and Middle East at Sustainalytics, where he worked for seven years.