BNP Paribas AM eyes alpha-generating active ETFs

The alpha generating ETFs will employ quantitative active management

Jamie Gordon

Lorraine Sereyjol-Garros new

BNP Paribas Asset Management is planning to launch alpha-generating active ETFs after debuting its first active ESG exclusions ETFs in February.

When asked if the firm would consider active ETFs beyond ESG, BNPP AM head of development for ETFs and index funds Lorraine Sereyjol-Garros (pictured) told attendees at a recent ETFGI event the French player will target ETFs employing active management for financial as well as ESG goals.

“Even if it will always be ESG, it will be active on the financial side and not just the ESG side,” Sereyjol-Garros said.

“Meaning, kind of smart beta or quantitative, always systematic, transparency is very important for our clients. Furthermore, some regulators do not accept non-transparent ETFs in Europe, so we have to comply with our regulator.”

The news of the firm’s active ETF expansion plans comes two months after ETF Stream revealed the launch of the BNP Paribas Easy Sustainable EUR Government Bond UCITS ETF (BJLM) and BNP Paribas Easy Sustainable EUR Corporate Bond UCITS ETF (BJLN).

The French asset manager said its debut active products take an “index-like approach” and are “active purely in an ESG sense”, without seeking to outperform their benchmark.

Both ETFs apply proprietary ESG methodology and exclusion policies, with both products compliant with Belgium’s Febelfin ESG label, while only BJLN is compliant with France’s ESG framework.

“The ETFs are different from what is currently available in the market in that these are active ETFs but purely in an ESG sense,” Sereyjol-Garros said.

“We began our ESG ETF range in 2016 and we then partnered with a provider to create custom indices incorporating our ESG methodology, but it is quite complex and we wanted a methodology nimble enough to exclude issuers involved in controversies between rebalance dates.”

BNPP AM’s entry into the active ETF space also coincides with regulatory changes by the Autorité des Marchés Financiers (AMF) to list on Euronext Paris after the exchange was the last venue in Europe to block listings of the products.

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