UBS Asset Management has launched an ETF tracking Australian stocks with a low carbon tilt.
The UBS ETF MSCI Australia ESG Universal Low Carbon Select UCITS ETF (AUESG) is listed on the Six Swiss Exchange with a total expense ratio (TER) of 0.43%.
AUESG tracks the MSCI ESG Universal Low Carbon Select 5% Issuer Capped Total Return Net index, comprised of large and mid-cap Australian equities that demonstrate a “robust ESG profile”.
The index will exclude companies with an MSCI ESG rating below ‘B’ and controversies score below one while those involved in sectors including weapons, civilian firearms, nuclear weapons, tobacco, thermal coal power and fossil fuel extraction will also be excluded.
Furthermore, the parent index will then be ranked via its carbon emission intensity with the top 5% being cut from the index, however, no sector will be cut more than 30%.
MSCI will then add an ESG re-weighting factor based on its ESG rating criteria with individual stocks capped at 5%.
The ETF is labelled Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).
It comes a week after the Swiss asset manager launched the UBS ETF MSCI Switzerland IMI Dividend ESG UCITS ETF (CHDIV) with a TER of 0.20%.