Industry Updates

VanEck switches to ESG indices on three multi-asset ETFs

Rising demand for ESG ETFs

Theo Andrew


VanEck is switching the indices on its three multi-asset ETFs to ones that include ESG metrics.

Two of the four underlying indices – covering the equity and the corporate bond allocations – tracked by the VanEck Multi Asset Conservative Allocation UCITS ETF (DTM), the VanEck Multi Asset Balanced Allocation UCITS ETF (NTM) and the VanEck Multi Asset Growth Allocation UCITS ETF (TOF) will be changed.

The Solactive Global Equity index will be replaced by the Solactive Sustainable World Equity index,while the Markit iBoxx EUR Liquid Corporates index will be switched to the iBoxx SD-KPI EUR Liquid Corporates index.

The ETFs will continue to track the Markit iBoxx EUR Liquid Sovereign Diversified 1-10 index and the GPR Global 100 index as part of its government bond and real estate allocation.

VanEck said the changes reflect the rising investor demand for ESG ETFs.

DTM has €21.6m assets under management (AUM), while NTM and TOF had €29.1m and €22.2m, respectively, as at the end of August.

The ETFs will be labelled Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).

Martijn Rozemuller, CEO of VanEck Europe, said: “We expect demand for index funds that incorporate ESG criteria to increase significantly in the future while demand for funds that do not incorporate ESG considerations will decrease.

“We therefore want to present our customers with a well-designed range of ETFs with a sustainable focus.”

VanEck has switched to an ESG index on several ESG ETFs this year including the VanEck iBoxx EUR Corporate UCITS ETF (TCBT) which also changed to track the iBoxx SD-KPI EUR Liquid Corporates index.

The ETF issuer added an ESG screen to the VanEck European Equal Weight UCITS ETF (TEET) and subsequently doubled the fees from 0.20% to 0.40%.

Furthermore, both the $885.8m VanEck Vectors Semiconductor UCITS ETF (SMGB) and the $78.4m VanEck Vectors Hydrogen Economy UCITS ETF (HDRO) also saw their ESG methodologies tightened.

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