New Listing

State Street launches three dividend ESG ETFs

SSGA launches its first smart beta ESG ETFs after its US and Euro Dividend Aristocrats products gathered $5.6bn assets since their launch in 2011

Jamie Gordon

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State Street Global Advisors (SSGA) has launched three ESG versions of its dividend aristocrat ETFs.

The SPDR S&P Global Dividend Aristocrats ESG UCITS ETF (GEDV), SPDR S&P US Dividend Aristocrats ESG UCITS ETF (UEDV) and SPDR S&P Euro Dividend Aristocrats ESG UCITS ETF (ZPD9) have listed on the Deutsche Boerse and Euronext Amsterdam on 8 June, while GEDV and UEDV will also list on the London Stock Exchange.

GEDV has a total expense ratio (TER) of 0.45% while UEDV and ZPD9 have TERs of 0.35% and 0.30%, respectively.

Tracking S&P ESG Dividend Aristocrats Quality Income indices, the three ETFs offer exposure to equities with high dividend yields from across global, US and eurozone.

The ETFs also employ an ESG filter which excludes companies involved in controversial activities and the bottom five percent of scorers on United Nations Global Compact principles.

Each stock is subsequently weighted based on dividend yield and historical resilience.

Ludovic Djebali, head of SPDR ETF for France, Belgium and Luxembourg, said: “These new ETFs respond to the growing appetite of investors for inexpensive ESG solutions and will allow them to access a quality return in a ESG framework.

“The different geographic exposures give investors new tools to improve the diversification of their ESG portfolios: sustainable dividends meet sustainable investing.”

The firm’s dividend aristocrats ETF range have been some of the most popular dividend strategies in Europe over the past few years.

Since launching in 2011, the SPDR S&P US Dividend Aristocrats UCITS ETF (UDVD) has gathered some $3.3bn assets under management (AUM) while the SPDR S&P Euro Dividend Aristocrats UCITS ETF (EUDI) has $2.3bn AUM.

One of the firm’s latest ESG launches, the SPDR Bloomberg SASB US Corporate ESG UCITS ETF (USCR), has been the most popular ETF in Europe this year with $5.5bn inflows, as at 8 June, according to data from ETFLogic.

The new products are SSGA’s first ESG factor strategies and follow the rollout of the company’s core equity and fixed income ESG ETFs in 2020.

Ryan Reardon, SPDR ETF investment strategist at SSGA, told ETF Stream: “S&P originally developed Dividend Aristocrats which is unique from other dividend strategies. European investors have voted with their assets by putting their support into these products.” 

“We will see how these strategies are accepted by clients, and if we hear they’d like to see more ESG smart beta, that could be a logical next step.” 

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