HSBC Global Asset Management has launched a range of sustainable equity ETFs tracking newly created FTSE Russell indices.
Three of the range, the HSBC Europe Sustainable Equity UCITS ETF (HSEU), the HSBC Japan Sustainable Equity UCITS ETF (HSJD) and the HSBC USA Sustainable Equity UCITS ETF (HSUD) are listed on the London Stock Exchange with total expense ratios (TERs) ranging between 0.12% and 0.18%.
Three more ETFs offering exposure to developed world, emerging markets and Asia-Pacific ex-Japan will be listed over the next few weeks.
The ETFs track the FTSE Russell ESG Low Carbon Select indices which target a 50% carbon emissions reduction and a 50% fossil fuels cut relative to the parent index.
Furthermore, the indices aim for a 20% ESG score uplift compared to the parent indices and incorporate a custom exclusion list based on the United Nations Global Compact Principles.
The methodology also takes into consideration country and sector neutrality relative to the parent indices.
Olga De Tapia (pictured), global head of ETF sales at HSBC GAM, commented: “This three-tilt approach allows us to capture the benefits of positive inclusion and access companies that are transitioning towards a low carbon economy.
“Due to the evolution of the energy industry, the indices aim to capture stocks with lower fossil fuel reserves intensity, including alternative energy companies.”
Xavier Desmadryl, global head of ESG research at HSBC GAM, added: “Investors’ desire to initiate change through sustainable investing continues to grow and long-term equity returns are increasingly driven by companies that effectively implement strong ESG practices.
“We seek to encourage all companies held in our portfolios to establish and maintain high levels of transparency, particularly in their management of ESG issues and risks. Engagement with these companies is an important element in both our ESG integration and our stewardship oversight.
“These foundations are the driving force behind our new sustainable equity ETFs, which will provide investors with a core sustainable building block for their portfolios.”
Stephane DeGroote, managing director, head of ETFs and derivatives business EMEA at FTSE Russell, said: “FTSE Russell worked closely with HSBC GAM to develop indices that integrate ESG ratings, carbon emissions and reserves considerations, paving the way for a new generation of ETFs.
“These ETFs enable investors to participate in the transition towards a low carbon economy, while also balancing governance, social and environmental concerns.”
The launches are part of a push from HSBC GAM to "substantially" grow its ETF business this year. This includes the launch of a fixed income ETF platform and plans to hire 15 staff to ETF specialist roles.
As part of this hiring spree, the firm appointed Marc Hall from Vanguard in April to head-up its sales in Switzerland.
This ETF push comes after the firm appointed Nicolas Moreau as CEO last September from DWS, the asset manager which offers the second-largest ETF range in Europe.
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