Industry Updates

LGIM downgrades gold mining ETF to Article 6

Following a review of its responsible investment proposition

Theo Andrew

a large truck in a cave

Legal & General Investment Management (LGIM) has downgraded its gold mining ETF from Article 8 to ‘non-ESG’ Article 6 under the Sustainable Finance Disclosure Regulation (SFDR).

In a shareholder notice, LGIM said the L&G Gold Mining UCITS ETF (AUCP) would remove all references to ESG following a review of its investment proposition.

It follows a similar move to downgrade its China bond ETF to Article 6, 18 months after the firm received public criticism from an investor over the strategy’s sustainable credentials.

LGIM said the move was part of a “regular review” of its responsible investment proposition.

“We have refined our Responsible Investment Framework for pooled funds, including ETFs, in the UK and Europe to reflect our perspective as well as the current expectations of our clients, regulators and the general market,” an LGIM spokesperson said.

“Based on this, the L&G Gold Mining UCITS ETF has been reclassified.”

The asset manager said the change will take effect on 28 November.

Launched in 2008, AUCP tracks the STOXX Global Gold Miners NR USD index and has $134.7m assets under management.

Asset managers have been downgrading their ETFs under SFDR at pace over the past month, ahead of a new set of requirements set to come into force in January.

Amundi, BlackRock, UBS Asset Management, Invesco and HSBC Asset Management all reclassified their Paris-Aligned Benchmark (PAB) and Climate Transition Benchmark (CTB) ETFs in November.

Last week, the European Securities and Markets Authority (ESMA) said it is consulting the industry on introducing rules on how asset managers should name their ESG-related funds in a bid to “address any misuse” of SFDR.

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