Ossiam has launched a euro government bond ETF with a carbon-reduction tilt, expanding its environmental, social and governance (ESG) offering.

The Ossiam Euro Government Bonds 3-5yr Carbon Reduction UCITS ETF (OG35) is listed on Xetra with a total expense ratio of 0.17%.

Tracking the ICE 3-5 Year Euro Government Carbon Reduction index, OG35 offers exposure to EUR-denominated sovereign bonds with a 3-5 year maturity tranche.

OG35’s strategy reduces the portfolio’s carbon footprint by weighting dependent on countries’ respective carbon footprints.

The weights of the bonds in OG35 are also determined by using an optimisation procedure that aims to minimise deviations from the weights of the bonds in the index while reducing the carbon footprints within country deviation limits.

Additionally, OG35’s strategy allows a 5% maximum deviation of each country’s weight from its weight in its benchmark.

Ossiam poaches quantitative strategy head from BNP Paribas AM

Bruno Poulin (pictured), CEO of Ossiam, commented: “In expanding our ESG ETF offering, OG35 is an additional component for investors who wish to manage their portfolio’s total carbon footprint.”

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