Industry Updates

State Street Global Advisors shuts 'uneconomic' SASB euro corporate bond ETF

SPPR houses €36.1m AUM

Theo Andrew


State Street Global Advisors (SSGA) is closing its sustainable euro corporate bond ETF because it is no longer economically viable.

In a shareholder notice, the firm said the SPDR Bloomberg SASB Euro Corporate ESG UCITS ETF (SPPR) would terminate on 12 October after the net asset value of the ETF fell below its “minimum specified amount”.

SPPR currently houses €36.1m assets under management (AUM) having launched three years ago.

“The board do not believe that it will increase materially in the near future and the fund is uneconomic to operate,” the notice said. “The board are of the opinion that the proposed termination is in the best interests of the fund’s shareholders.”

The ETF has failed to capture the investor attention of its US counterpart, the SPDR Bloomberg SASB U.S. Corporate ESG UCITS ETF (USCR), which has amassed €6.4bn AUM since launching in the same month.

Tracking the Bloomberg SASB Euro Corporate ESG Ex-Controversies Select index, SPPR invests in takes securities from the Bloomberg Barclays Euro Corporate index before weighting them using SSGA’s Responsibility Factor (R-Factor) optimisation process.

The process was designed around the analytical framework of the Sustainability Accounting Standards Board (SASB), a set of standards developed to identify financially material sustainability information to investors.

SPPR also failed to benefit from a rush into euro-denominated corporate bond ETFs earlier this year when yields became attractive on sticker-than-anticipated inflation.

In April, SSGA closed its low volatility and emerging market ETFs which it also deemed “uneconomical”.

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