Industry Updates

UBS AM adds ESG filter to high dividend ETF

UBUM will now track the S&P Developed ESG Dividend Aristocrat index

Jamie Gordon


UBS Asset Management has added an ESG filter to its high dividend ETF, the first on the European market to do so.

Effective 8 February, the $61.5m UBS ETF S&P Dividend Aristocrats ESG UCITS ETF (UBUM) will apply ESG screening to the S&P Global Dividend Aristocrats index.

The standard variant of the index tracks high-yield companies in developed and emerging markets with a track record of increasing or maintaining pay-outs for at least 10 consecutive years.

Meanwhile, the ESG-screened version applies the methodologies of RobecoSAM, Sustainalytics and Arabesque S-Ray, and tracks approximately 100 companies that comply with the United Nations Global Compact, do not operate in controversial sectors and are not among the bottom 25% of performers in the original index.

The firm said that in fact, back-testing has shown that the dividend yield and annualized performance of UBUM has been superior to the non-ESG strategy in recent years.

Francesco Branda, head of passive and ETF specialist sales for Italy at UBS AM, commented: "The index is one of the best known and most popular high dividend strategies among investors.

“The decision to create the first ESG version in Europe reinforces UBS AM's focus on sustainable investments and the company’s ability to innovate, offering solutions that address clients’ needs.”

ESG ETF inflows outpace non-ESG in 2020 amid watershed year for sustainable investing

The change in index is another example of the firm’s ESG ETF push. Last December, the Swiss asset manager partnered with MSCI to develop low carbon indices for its entire SRI ETF range, ETF Stream revealed.

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