BNP Paribas Asset Management launches first ETF on Chinese SRI equity index

August 31, 2021

BNP Paribas Asset Management (‘BNPP AM’) announces the launch of the BNP Paribas Easy MSCI China Select SRI S-Series 10% Capped UCITS ETF[1], a listed index fund offering investors exposure to the Chinese market, by selecting the best-rated companies in terms of ESG[2] approach.

This ETF is the first listed fund to invest in a Chinese index using an SRI[3] methodology.  It has been traded continuously on Euronext Paris and Deutsche Börse Xetra since 27 July 2021.

BNPP AM is expanding its range of responsible index funds with the launch of BNP Paribas Easy MSCI China Select SRI S-Series 10% Capped UCITS ETF, which gives investors access to large and mid-cap Chinese companies with the best ESG profile in their sector, using a ‘best-in-class’ approach.  The starting investment universe is the MSCI China Index, consisting of approximately 750 stocks.  The MSCI China Select SRI S-Series 10% Capped Index consists of around 100 stocks, with a maximum index weight of 10%.

In addition to ESG criteria, those companies that do not respect the principles of the United Nations Global Compact or are involved in ESG controversies are excluded from the index.  The same applies for companies involved in controversial weapons, tobacco, adult entertainment, alcohol, gambling, genetically modified organisms, nuclear power and fossil fuels.

Isabelle Bourcier, Head of Quantitative & Index Management at BNPP AM, comments:

"The originality of this approach is that it allows the implementation of a sustainable investment strategy in a key economic region.  This new ETF completes our ESG index fund offering, with EUR 12.8 billion under management[4], making BNPP AM one of the market leaders."
 

Key Fund Characteristics (as at 31 August 2021):

ETF Name

ISIN Code

Share type

Replication method

SFDR

Ongoing charge

SRRI*

BNP Paribas Easy MSCI China Select SRI S-Series 10% Capped UCITS ETF

LU2314312849

Capitalisation

Physical

Article 8

0.45%

6

* The synthetic risk indicator is determined on a scale of 1 to 7 (7 being the highest level of risk). It is calculated on a periodic basis and may therefore change over time. A regular consultation of the Fund's KIID is recommended.

Investments in the funds are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. The funds described present a risk of capital loss. For a more complete definition and description of risks, please refer to the prospectus and KIID of the funds. Before subscribing, you should read the most recent version of the prospectus and KIID, which are available free of charge on our website www.bnpparibas-am.com.

Risk of taking ESG criteria into account: The absence of common or harmonised definitions and labels regarding ESG and sustainability criteria at the European level may lead to different approaches on the part of management companies when setting ESG objectives. It also means that it may be difficult to compare strategies that incorporate ESG and sustainability criteria as the selection and weightings applied to certain investments may be based on indicators that may share the same name but have different underlying meanings. When assessing a security based on ESG and sustainability criteria, the management company may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may at present be incomplete, inaccurate or unavailable The application of responsible business conduct standards as well as ESG and sustainability criteria in the investment process may lead to the exclusion of securities of certain issuers. As a result, the Fund's performance may sometimes be better or worse than that of funds with a similar strategy.

- ENDS -

Footnotes

 

  1. ^ [1] Exchange Traded Fund
  2. ^ [2] Environmental, Social & Governance
  3. ^ [3] MSCI's SRI approach follows a methodology based on the construction of indices consisting of selecting companies with the highest ESG ratings, i.e. 25% of the market capitalisation in each sector (‘best in class’ approach), after excluding companies involved in the following activities: alcohol, tobacco, gambling, civilian firearms, military weapons, nuclear energy, adult entertainment and genetically modified organisms (GMOs). More information and a comparison of the methodologies of MSCI’s SRI and ESG indices is available at www.msci.com.
  4. ^ [4] As at 30 June 2021

BNP PARIBAS ASSET MANAGEMENT UK Limited, ‘the investment company’, is authorised and regulated by the Financial Conduct Authority.  Registered in England No: 02474627, registered office: 5 Aldermanbury Square, London, England, EC2V 7BP, United Kingdom.

This material is produced for information purposes only and does not constitute:

1.          an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or

2.          investment advice.

This material is issued and has been prepared by the investment company.  It contains opinions and statistical data that are considered lawful and correct on the day of their publication according to the economic and financial environment at the time.  This document does not constitute investment advice or form part of an offer or invitation to subscribe for or to purchase any financial instrument(s) nor shall it or any part of it form the basis of any contract or commitment whatsoever.

Whilst the fund described herein has been established as a UCITS (in accordance with the UCITS Directive) in Luxembourg, it has not been registered in the UK, therefore the promotion of this fund and the distribution of this document in the UK are accordingly restricted by law.

This document is provided without knowledge of an investors’ situation.  Prior to any subscription, investors should verify in which countries the financial instruments referred to in this document refers are registered and authorised for public sale.  In particular financial instruments cannot be offered or sold publicly in the United States.  Investors considering subscriptions should read carefully the most recent prospectus and Key Investor Information Document (KIID) agreed by the regulatory authority, available on the website.  Investors are invited to consult the most recent financial reports, which are also available on the website.  Investors should consult their own legal and tax advisors prior to investing.  Given the economic and market risks, there can be no assurance that the financial instrument(s) will achieve its investment objectives.  Their value can decrease as well as increase. In particular, changes in currency exchange rates may affect the value of an investment.  Performance that is shown net of management fees and is calculated using global returns with time factored in, with net dividends and reinvested interest, and does not include subscription-redemption fees, exchange rate fees or tax.  Any gross of fees performance included in this material do not reflect the deduction of commission, fees and other expenses incurred.  Returns will be reduced after the deduction of such fees.  Past performance is not a guarantee of future results.

This document is directed only at person(s) who have professional experience in matters relating to investments (‘relevant persons’).  Any investment or investment activity to which this document relates is available only to and will be engaged in only with Professional Clients as defined in the rules of the Financial Conduct Authority.  Any person who is not a relevant person should not act or rely on this document or any of its contents.

All information referred to in the present document is available at www.bnpparibas-am.com.

This is a Marketing Communication for Professional Investors only.  No assurance can be given that any forecast, target or opinion will materialise.

As at August 2021.

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