CISI / HANetf Virtual ETF Conference – Friday, March 18, 2022 – 08:30-12:15 (GMT) Online event with ten speakers from around the world focused on ESG and thematic investing. Register now.
BNP Paribas Asset Management launched a trio of new ETFs on EuronextParis.
the BNP Paribas Easy ECPI Global ESG Hydrogen Economy UCITS ETF (HYDRO FP) and BNP Paribas Easy ECPI Global ESG Med Tech UCITS ETF (MEDTE FP) provide thematic exposure to stocks of companies involved in the hydrogen economy and medical technology industries, respectively.
the BNP Paribas Easy FTSE EPRA/NAREIT Global Developed Green CTB UCITS ETF (GRCTB FP)meanwhile, offers exposure to REITs and real estate companies in developed markets while favoring the most environmentally friendly stocks.
The hydrogen economy
The BNP Paribas Easy ECPI Global ESG Hydrogen Economy UCITS ETF follows ECPI Global ESG Hydrogen Economy Index which selects its constituents from a universe of developed market equities with market capitalizations in excess of €500 million and average daily trading volumes in excess of €5 million.
The methodology first screens out violators of the principles of the UN Global Compact, companies with very low ESG ratings, and companies whose business activities are related to tobacco, controversial weapons, conventional weapons, oil and gas. gas, thermal coal and coal-based electricity generation.
The index then selects companies that can be classified into two industry categories: “Hydrogen Products” and “Clean Energy”.
Companies in the Hydrogen Products category are defined as companies involved primarily in hydrogen projects, including hydrogen producers, fuel cell manufacturers or companies in the electrolysis sector.
Clean energy companies, on the other hand, include renewable energy producers with marginal exposure to hydrogen production plants.
The index targets 40 constituents, selecting the 30 largest stocks in the Hydrogen Products category and the 10 largest in the Clean Energy category. The constituents are weighted equally and the index is revised on a semi-annual basis with buffer rules helping to limit unnecessary rotations.
The ETF comes with an expense ratio of 0.30%.
The BNP Paribas Easy ECPI Global ESG Med Tech UCITS ETF follows ECPI Global ESG Medical Tech Index which follows a process similar to that described above for the hydrogen economy index.
The methodology constructs an eligible universe of stocks by selecting companies classified in four industry categories: “Biotechnology”, comprising companies active in genomic science activities; ‘Life Sciences Tools & Services’, comprising companies involved in drug discovery and development through the provision of analytical tools and services; ‘Health Care Equipment & Suppliers’, including manufacturers of medical devices, drug delivery systems, diagnostic equipment and hospital supplies; and ‘Health Care Technology’, comprising companies active in telemedicine, digital health, robotics and AI-based solutions, administrative digitization, sensors and wearable technologies.
The index targets 50 constituents with an equal split between US listed and unlisted stocks. The methodology selects the largest companies while aiming to include a proportionate number of constituents from each industry category that is representative of the total number of stocks of that category in the eligible universe. The constituents are also weighted equally.
The ETF also comes with an expense ratio of 0.30%.
Sustainable real estate
The BNP Paribas Easy FTSE EPRA/NAREIT Global Developed Green CTB UCITS ETF follows The FTSE EPRA Nareit has developed the Green EU CTB index which provides noticeable climate improvements and long-lasting characteristics while minimizing tracking error relative to the parent FTSE EPRA Nareit Developed Index.
To achieve this goal, the parent index is first reviewed to eliminate violators of the principles of the United Nations Global Compact. The remaining components are then rated based on two sustainability considerations: estimated energy consumption per square meter and eligible green certification floor area.
To assess the durability performance of components, the index relies on building-by-building geolocation data mapping from specialist data provider GeoPhy. This data is then matched with green certification data and provides the basis for detailed modeling of energy consumption and carbon emissions.
These valuations are then applied as skews to adjust company weightings to provide greater exposure to securities whose real estate investment portfolios and operations show better sustainability performance.
The ETF comes with an expense ratio of 0.40%.
The fund complements the BNP Paribas Easy FTSE EPRA/NAREIT Developed Europe ex UK Green UCITS ETF (GREAL FP) which launched in November 2019 and has since amassed €400 million in assets. This fund offers the same strategy while targeting REITs and property companies listed in developed European markets outside the UK. Its spend rate is also 0.40%.