Industry Updates

Amundi to merge €4.9bn global SRI PAB ETF into Irish-domiciled equivalent

Amundi has also incorporated the Lyxor global equity ESG ETF into the newly launched product

Lauren Gibbons

Glass globe green ESG climate

Amundi is set to merge its global SRI Paris-Aligned Benchmark (PAB) climate ETF into a newly launched equivalent domiciled in Ireland.

In a shareholder notice, Amundi said the Amundi Index MSCI World SRI PAB UCITS ETF (WSRI) will be absorbed into the newly created Amundi MSCI World SRI Climate Net Zero Ambition PAB UCITS ETF.

The new ETF will have a total expense ratio (TER) of 0.18%

The French asset manager announced last March it would be duplicating its Amundi MSCI World SRI Climate Net Zero Ambition PAB UCITS ETF (WSRI) to allow for Irish tax benefits.

Ireland's lead over Luxembourg as the top domicile for UCITS ETFs has been bolstered by the Ireland-US double taxation treaty, which subjects US equity ETFs in Ireland to a 15% withholding tax on dividends versus 30% in Luxembourg and other jurisdictions.

Ireland has jumped from 199 exchange-traded products (ETPs) with $305bn assets under management (AUM) in 2017 to 2,722 ETPs and $1.1trn AUM by October 2023, significantly outstripping Luxembourg's 1,364 ETPs and $305m AUM.

French asset managers including Amundi and BNP Paribas Asset Management opting for Ireland over their traditional choice – Luxembourg – underscores the Emerald Isle’s appeal for domiciling ETFs.

Amundi started domiciling ETFs in Ireland last May while its French rival BNP Paribas Asset Management listed its first ETF – the BNP Paribas Easy S&P 500 ESG UCITS ETF (SPEEU) – on its ICAV platform last month.

Amundi’s merging of WRSI is part of a broader pattern from the asset manager in shifting its Luxembourg-domiciled global equity ETFs to Ireland.

The move follows Amundi's regulatory approval from the Central Bank of Ireland (CBI) last March, allowing it to launch several US equity ETFs previously based in Luxembourg.

Amundi will also be merging the Lyxor MSCI World ESG Leaders Extra UCITS ETF (WESG) into its new product, a key step in its continuous effort to incorporate the ETFs obtained via its acquisition of Lyxor in July 2022.

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