Industry Updates

Amundi hikes fees on US equity ETF following ESG index switch

The ETF will become tax efficient for French investors

Theo Andrew


Amundi is switching the index on its US equity ETF to one that applies ESG methodology.

In a shareholder notice, the French asset manager said the Amundi MSCI USA UCITS ETF (CU2) will switch from tracking the MSCI USA index to the MSCI USA ESG Leaders Select 5% Issuer Capped index.

Amundi will change its name to the Amundi PEA MSCI USA ESG Leaders UCITS ETF following the switch while its total expense ratio (TER) will increase from 0.28% to 0.35%.

Despite this, CU2 will become tax-efficient for French investors under the Plan d’Epargne en Actions (PEA), a regulated savings plan similar to an ISA in the UK.

Investors who hold investments in a PEA for longer than five years do not pay capital gains tax while earned income is also free.

To be eligible for PEA, an ETF must invest in European indices, track an index composed of at least 75% of companies headquartered in Europe or be synthetically replicated. CU2 falls under the latter.

It comes after Amundi merged the €2.5bn Amundi MSCI USA ESG Leaders Select UCITS ETF (SADU) – which tracks the same index – to its Irish collective management vehicle (ICAV) earlier this month.

An Amundi spokesperson said the move was to offer its clients a variety of options including “a high level of flexibility in terms of fund domiciles”.

The favourable tax treaty in the US is one of the key drivers for the move, with US equity ETFs domiciled in Ireland subject to a 15% withholding tax rate on dividends versus 30% for ETFs in Luxembourg and other jurisdictions.

CU2, which is domiciled in Luxembourg, will classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).

Featured in this article

Logo for Amundi


No ETFs to show.