New Listing

Franklin Templeton unveils first China Paris-aligned climate ETF

The first ETF in Europe offering sole exposure to Chinese equities with a PAB tilt

Theo Andrew

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Franklin Templeton has expanded its Paris-aligned benchmark (PAB) strategy range with the launch of a China ETF, the first of its kind offering sole exposure to Chinese equities with a PAB tilt.

The Franklin MSCI China Paris Aligned Climate UCITS ETF (PABC) will list on the Deutsche Boerse on 15 June and the Borsa Italiana and the London Stock Exchange on 17 June with a total expense ratio (TER) of 0.22%.

PABC will track the MSCI China Climate Paris-Aligned index and the EU Climate Benchmark Paris-Aligned Benchmark (PAB) index and will seek exposure from large and mid-cap Chinese equity securities.

While several other ETFs offer exposure to China ESG and low carbon ETFs, none are currently aligned to the PAB.

The indices will look to overweight Chinese companies transitioning to a lower-carbon economy while ensuring full alignment with the decarbonisation goals of the Paris Climate Agreement.

The ETF is labelled Article 9 under the Sustainable Finance Disclosure Regulation (SFDR) and is the third ETF in Franklin’s PAB range.

In July 2020, the group launched the Franklin STOXX Europe 600 Paris Aligned Climate UCITS ETF (EUPA) and the Franklin S&P 500 Paris Aligned Climate UCITS ETF (500P).

Caroline Baron, head of ETF business development for EMEA at Franklin Templeton, said: “The ETF is a natural extension of the Paris-Aligned Climate ETF product range we launched two years ago and provides exciting growth opportunities in Chinese stock markets by investing in securities transitioning to a low carbon economy.

“Aligned with the EU Climate Benchmark Regulation, it will additionally offer investors key standardisation, transparency and reporting benefits and should appeal to a wide range of European investors seeking more sustainable investment solutions.”

Climate ETFs have been launched thick and fast throughout 2022, with HSBC, State Street, DWS and Invesco all expanding their suite of PAB products in recent months.

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