Industry Updates

Lyxor green bond ETF becomes certified

George Geddes

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Lyxor Asset Management has received TEEC certification for its Lyxor Green Bond UCITS ETF (CLIM).

CLIM was launched two years ago, offering exposure to investment grade green bonds, a world's first, according to Lyxor.

The TEEC certification was introduced by the French government in 2015 to certify which investment funds' underlying assets are meeting standards regarding "green" quality. To be certified, the investment funds require a calculation of how "green" the bonds are, which companies and sectors are excluded and the monitoring of the Environmental, Social and Governance (ESG) projects funded by the underlying bonds.

In its bid to become a pioneer in green certification, France hopes to create a European ecolabel for green financial products.

Florent Deixonne, Head of SRI at Lyxor Asset Management, said in a statement: "Reflecting Lyxor's strong culture of innovation, the TEEC-certified Lyxor Green Bond (DR) UCITS ETF combines the transparency and liquidity advantages of passive management with the benefits of an active analysis of projects financed by the green bonds held in the portfolio, meeting the label's strictest quality demands".

CLIM, the newly certified ETF, is available both in USD and European hedged ETF with a total expense ratio of 0.25% and 0.30%, respectively. Green shares account for 95% of assets financed which is the mandatory requirements for the TEEC certification.


Source: Bloomberg

The performance of CLIM over the last year has been positive, even including the high volatility the market faced in Q4 last year. Over the last 12 month, CLIM has produced returns of 3.4% which is respectably high when fixed income products produce lower returns than equity due to the lower risk exposure as well as the rocky Q4. These returns were highly contributed by March's performance which produced nearly 2% returns for the month alone.

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