UBS Asset Management has given investors the option to take an even deeper green approach to the S&P 500 by launching the first ETF to offer exposure to the S&P 500 ESG Elite index, ETF Stream can reveal.
The UBS ETF S&P 500 ESG Elite UCITS ETF (S5EG) is listed on the London Stock Exchange and Deutsche Boerse with a total expense ratio (TER) of 0.20%.
S5EG is the first ETF to track the S&P 500 ESG Elite index which was created by S&P Dow Jones Indices in December 2020.
Starting with the S&P 500 universe, the index targets 25% of the float market cap of each GICS sector and selects companies in order of SPDJI’s ESG score which is based on SAM’s Corporate Sustainability Assessment (CSA).
This target is included in order to maintain similar sector weights to the overall S&P 500.
S5EG also excludes any company involved in fossil fuels, nuclear power, tobacco, controversial weapons, small arms, military contracting, adult entertainment, alcohol, gambling, GMO, predatory lending, palm oil or companies with poor United Nations Global Compact (UNGC) scores.
This leaves an index of 100 stocks which are weighted by market cap and subject to a single company weight cap of 5%.
Clemens Reuter, global head of ETF and index fund client coverage at UBS AM, commented: “S5EG enables investors to take the next step in their sustainable journey and achieve more impact through their investments. Our ambition is to meet the demands of all types of ESG investors.”
The index is a deeper green approach than the S&P 500 ESG index which currently includes 295 stocks.
UBS AM was the first ETF issuer to offer exposure to the S&P 500 ESG index after it launched the UBS S&P 500 ESG ETF (5ESG) in April 2019.
The strategy has been popular with investors and recently passed the $1bn assets under management (AUM) mark in September 2020.