Unicredit Lists ESG Factor ETFs in Europe

By Dieter Holger

UniCredit SpA (UCG.MI) has listed two exchange-traded funds in Frankfurt that use environmental, social and governance investing as well as factor investing.

The UC iStoxx ESG-X Multi Factor UCITS ETF (ECBF) and UC Stoxx ESG-X Minimum Variance UCITS ETF (ECBV) track indexes based on the EURO STOXX Index, UniCredit said Tuesday. Both ETFs charge fees of 0.40% annually or $40 for every $10,000 invested.

They screen out European companies involved with certain weapons, tobacco, thermal coal and nuclear power, and businesses that don't follow the United Nations Global Compact principles on human and labor rights, the environment, ethics and anticorruption.

The ETFs also apply a factor approach, which groups stocks with related characteristics that are expected to behave similarly under certain market conditions. Factor investing has grown more popular as investors have moved assets out of actively-managed ETFs into passive strategies. Around $800 billion is now invested in factor ETFs, up from $600 billion two years ago, according to market research firm Morningstar.

"In order to meet ESG investment criteria, asset owners need to look for solutions beyond the traditional market-cap-weighted index," said Vincenzo Spadaro, global head of institutional equity derivatives at UniCredit.

UniCredit has only recently started listing ESG ETFs. Last year, the Italian bank listed its first ESG ETF: the UC MSCI European Green Bond EUR UCITS ETF, which delivers access to Europe's expanding green bond market.

Write to Dieter Holger at [e-mail]; @dieterholger

(END) Dow Jones Newswires

July 30, 2019 05:40 ET (09:40 GMT)

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