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5 ETFs as institutions increase passive ESG allocations

ESG_investingEuropean institutional investors will have no shortage of ETFs to choose from as they start to build ESG asset allocations through passive funds.

As Funds Europe reported this week, fund manager Invesco identified that many European institutional investors are likely to put much of their ESG allocations in the coming years through passive products.  

ETF launches with an ESG theme have been plentiful in recent months. Here are five asset managers with that have made multiple ESG ETF launches:

1.      Franklin Templeton launched two “forward looking” smart beta, climate-focused ETFs that reference climate-friendly versions of the Stoxx Europe 600 and S&P 500 benchmarks. Julie Moret, global head of ESG at the firm, said that EU Climate Benchmark regulation possibly means there will be wide adoption of climate-aligned investments in Europe.

2.      One institutional investor, Finland’s largest pension and insurance company Ilmarinen, has invested in an emerging markets ESG ETF run by Amundi which excludes companies involved in tobacco, alcohol, gambling, nuclear power, weapons and other controversial business involvement. The French fund manager launched eight ESG ETFs in June.

3.      Smart beta specialist Ossiam has launched an ETF designed to give investors exposure to eurozone bonds with a focus on carbon reduction.

4.      HSBC Global Asset Management rolled out three sustainability-focused ETFs covering equities in developed and emerging markets.

5.      Fidelity International, meanwhile, launched three actively managed ETFs implementing ESG criteria. Jenn-Hui Tan, global head of stewardship and sustainable investing, said sustainable investing is one of the “most significant shifts in asset management in a generation”, heightened by increasing evidence that ESG investing can enhance financial returns.

Read our ESG special report here.

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