New Listing

HSBC AM launches Paris-Aligned real estate ETF

TER of 0.30%

Lauren Gibbons

Olga De Tapia

HSBC Asset Management has extended its real estate ETF product range with the launch of a Paris-Aligned Benchmark (PAB) strategy.

The HSBC FTSE EPRA Nareit Developed Climate Paris Aligned UCITS ETF (HPNA) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.30%

HPNA physically replicates the FTSE EPRA Nareit Developed Green EU PAB index, capturing 307 listed real estate companies and real estate investment trusts (REITs) in developed markets.

It selects companies and REITs from its parent index – the FTSE EPRA Nareit Developed index – that meet the United Nations Global Compact’s 10 principles spanning areas such as human rights, labour, environment and anti-corruption.

To meet the PAB targets, it will aim to achieve a 50% reduction in greenhouse gas (GHG) emissions intensity, a yearly minimum 7% GHG intensity decrease, a 30% green certificate increase and a 10% cut in energy usage.

Furthermore, industry banding constraints are applied to the index to reduce tracking error.

Equinix is the index’s top holding at 10.4 %, followed by Prologis at 5.3% and Alexandria Real Estate Equity at 4.8%, as at 29 February.

Olga de Tapia (pictured), global head of ETF and indexing sales at HSBC AM, said: “We believe the real estate sector poses one of the biggest challenges and at the same time one of the greatest opportunities, in helping to mitigate climate change.

“This launch expands our sustainable offering in a sector that we believe has huge growth potential, with listed real estate being one of the world’s largest asset classes, as well as being a sector that has both obtainable and well understood options for improving sustainability characteristics.”

HPNA takes the number of the asset manager’s number of real estate ETFs to three.

Last September, it launched the HSBC FTSE EPRA Nareit Developed Islamic UCITS ETF (HINS).

HSBC AM also previously cut the fees on HINS from 0.40% to 0.24% in a bid to make the product more competitive.

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