Industry Updates

Amundi downgrades €19bn Article 9 ETF range

The latest asset manager to blame regulatory uncertainty for the downgrades

Theo Andrew

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Amundi is reclassifying its entire €19bn Paris-Aligned Benchmark (PAB) and Climate Transition Benchmark (CTB) ETF range as it becomes the latest asset manager to blame regulatory uncertainty amid a flurry of downgrades.

The downgrades – which cover 29 ETFs – are part of a wider reclassification by Amundi which will see almost all of its roughly 100 Article 9 funds, covering €45bn in assets under management (AUM), switch to Article 8.

Earlier this month, ETF Stream reported the French asset manager was consulting “key stakeholders” as to whether its PAB and CTB range should be classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).

In a statement, Amundi said it welcomed regulation around responsible investing but cited uncertainty around its application.

“The current regulatory framework does not yet allow the financial industry to respond in a uniform manner as to what should be considered ‘sustainable’ or not,” it said.

“Given this still-evolving regulatory environment, Amundi has therefore taken a conservative approach in terms of levels of sustainable investment published in its regulatory documentation.

“This choice has led to the reclassification of almost all of its range of Article 9 funds into Article 8.”

It added the move “in no way calls into question” the sustainability characteristics of its funds noting that it was a “deliberately cautious approach” to “protect investors and distributors from a significant risk of confusion”.

Amundi follows BlackRock, UBS Asset Management, Invesco and HSBC Asset Management in downgrading their PAB and CTB ETFs earlier this month.

It comes as uncertainty reigns over Europe’s ESG framework, once considered globally pioneering. Without regulatory clarification, PAB and CTB strategies are unlikely to meet the 100% sustainable investment requirements outlined under ‘level 2’ of SFDR.

Amundi also manages six Article 9 green bond ETFs but did not specify whether these were also set to be reclassified.

It comes two months after Amundi said it had “completed” its PAB range with the launch of the Amundi MSCI ACWI SRI PAB UCITS ETF (WELB).

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