Amundi has expanded its range of ESG ETFs with the launch of a European climate action strategy with a €500m in seed from Finnish pension fund Ilmarinen.
The Amundi MSCI Europe Climate Action UCITS ETF (AE5B) is listed on the Deutsche Boerse with a total expense ratio (TER) of 0.09%.
AE5B tracks the MSCI Europe Climate Action Net Total Return index which offers exposure to European equities deemed to be making progress towards reducing their carbon emissions.
The top 50% of companies are selected from each GICS sector based on four climate indicators, comprising carbon intensity, emission reduction targets, green revenues and climate risk management strength.
At the end of May, ASML was the index’s top holding, at 4.7%, followed by healthcare company Novo Nordisk (4.3%) and LVMH Moet Hennessy (3.9%).
The index also uses MSCI’s ESG business involvement screening research and its climate action metrics to select companies.
MSCI said the climate indices are designed to decarbonise investors’ portfolios via the emission reduction efforts of companies.
It offers an alternative to Amundi’s current Paris-Aligned Benchmark (PAB) – which is designed to decarbonise at a rate of 10% annually – and its Climate Transition Benchmark (CTB) ETFs.
Juha Venäläinen, senior portfolio manager at Ilmarinen, said: “The Amundi MSCI Europe Climate Action UCITS ETF investment will achieve a Europe exposure in Ilmarinen’s passive equity portfolio to companies which we believe have a chance of performing better than their competitors when the business environment changes due to climate warming."
Last week, the Helsinki-based institutional investor provided a $2.1bn seed for the US-listed iShares Climate Conscious & Transition MSCI USA ETF (USCL) and an $800m seed for the iShares MSCI Japan Climate Action ETF (2250) which is listed on the Tokyo Stock Exchange.
Earlier this month, Amundi unveiled the Amundi Euro Government Tilted Green Bond UCITS ETF (CB3) after it switched the index on its eurozone government bond ETF.