BNPP AM launches two active fixed income ESG ETFs

BNP Paribas Asset Management (BNPP AM) has launched the first two funds in its new suite of fixed income ETFs.

The offerings – BNP Paribas Easy Sustainable EUR Corporate Bond and BNP Paribas Easy Sustainable EUR Government Bond – are sub-funds of the BNP Paribas Easy Luxembourg SICAV and began trading on February 20 on Borsa Italiana and Deutsche Börse Xetra.

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BNPP AM’s ESG shared that the active fixed income ETF range applies an index-like approach combined with its proprietary sustainability approach. By integrating its sustainable approach while aiming to replicate the benchmark’s performance, the asset manager aims to offer investors the “flexibility to adapt to future regulatory changes”.

Highlighting the products’ combination of the asset manager’s “bespoke sustainable methodology with indexing expertise”, Marie-Sophie Pastant, head of index & ETF strategies – portfolio management at BNPP AM, commented: “This range will enable us to react promptly to any controversies without needing to wait for the next index rebalancing and to respond rapidly to the changing environment. This will allow us to comply more easily with the different sustainability label criteria.”

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BNP Paribas Easy Sustainable EUR Corporate Bond is an Article 9 fund according to the EU’s Sustainable Finance Disclosure Regulation (SFDR), investing exclusively in sustainable assets. Its Benchmark Index is the Bloomberg Euro Aggregate Corporate, an investment-grade bond index with an average duration of 4.4 years.

BNP Paribas Easy Sustainable EUR Government Bond, an Article 8 fund under SFDR, aims for sustainable investments of at least 30%. Its Benchmark Index is the J.P. Morgan EMU Investment Grade Index, an investment-grade bond index with an average duration of 7.1 years.

The universe of the sub-fund’s portfolio consists of the components of the Benchmark Index. After applying BNPP AM’s ESG integration approach, weightings may differ from the Benchmark Index and some components may not be included. The sub-fund strives for comparable performance against the Benchmark.
According to the asset manager: “Both funds will benefit from a better alignment with (Markets in Financial Instruments Directive 2014) MiFID 2 preferences, enhanced ESG reporting and an independent sustainability approach.”

Lorraine Sereyjol-Garros, global head of development for ETFs & index funds at BNPP AM, commented: “For those rethinking fixed income in their portfolios, active ESG fixed income management through an ETF structure provides investors with diversification, sound sustainable credentials and an affordable, convenient approach to portfolio construction.”

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