Industry Updates

Amundi replaces Solactive with Bloomberg index on green bond ETF

XCO2 will see its index switched to Bloomberg MSCI Global Green Bond 1-10 Year index

Theo Andrew


Amundi has switched from tracking a Solactive to a Bloomberg index on its global green bond ETF.

In a shareholder notice, Amundi said the Lyxor Green Bond ESG Screened UCITS ETF (XCO2) will go from tracking the Solactive Green ESG Bond EUR USD IG index to the Bloomberg MSCI Global Green Bond 1-10 Year index.

As a result, the ETF will be renamed the Lyxor Global Green Bond 1-10Y UCITS ETF under the same ticker and total expense ratio (TER) of 0.15%.

A spokesperson for Amundi told ETF Stream: "The switch is driven by factors including the interest shown by our clients in a product with a capped maturity and therefore a shorter duration, as the green bond market is on average a long maturity market.

"As well as the observed trends showing clients are more sensitive to the use of proceeds than to the nature of the issuers in the green bond market."

XCO2 currently has €27m in assets under management (AUM) and has so far returned -9.4% year-to-date while the Bloomberg MSCI Global Green Bond 1-10 Year index has returned -11% over the same period.

Amundi currently runs the largest green bond ETF in Europe, the €600m Lyxor Green Bond UCITS ETF (CLIM), which launched in 2017.

Europe’s largest asset manager inherited the most extensive range of green bond ETFs in Europe following its acquisition of Lyxor, having also launched Europe’s first government green bond ETF in July last year.

German rival DWS has also been expanding its green bond ETF range, after launching two investment grade green bond ETFs seeded by Luxembourg private bank Quintet also in last July.

The new launches follow lighter green corporate bond arrivals from DWS last year including the Xtrackers ESG EUR Corporate Bond Short Duration UCITS ETF (XZE5) in July and the Xtrackers ESG USD Corporate Bond UCITS ETF (XZBU) in September.

Green debt issuance surpassed the $500bn mark in 2021 and is expected to pass $1trn by 2023, according to the Climate Bonds Initiative.

It is still a tiny part of the $100trn total global debt but the bonds are anticipated to play a crucial role in the financing of projects required for the energy transition. Despite this, concerns have been raised around “greenwashing” in which issuers sell bonds that do not align with carbon reduction.

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