Paris-based asset manager Ossiam, which is an affiliate of Natixis Investment Managers, has launched a new ETF to capitalize on eurozone bonds.
The new Luxembourg-domiciled fund, which is officially called the Ossiam Euro Government Bonds 3-5Y Carbon Reduction UCITS ETF 1C (EUR), will focus on bonds with a three-to-five-year maturity tranche, while implementing a systematic reduction of the portfolio’s carbon footprint.
The ETF, which was launched with €200m of seed capital, will be listed on the German Xetra exchange and will carry a maximum total expense ratio of 0.17%.
While being indexed on the ICE BofAML 3-5 Year Euro Government Index, the strategy will target an average fossil carbon emission that is 30% lower than that of the investment universe.
The targets will be calculated using the carbon data of each country in the portfolio, which will be based on fossil CO2-per-capita data published in the European Union’s Emissions Database for Global Atmospheric Research.
In practice, the strategy will allow a 5% maximum deviation of each country’s weight from their weight in the benchmark index, which equates to an average 12.6% reduction versus the benchmark in tonnes of CO2 per capita per year.
We are very pleased to announce the launch of our latest ETF to add to our ESG product range. It’s an additional component for investors who wish to manage their portfolio’s total carbon footprint.Commenting on the new launch, Bruno Poulin, CEO of Ossiam, said:
The boutique, which has €4.2bn in assets under management, said to further limit relative risks, the composition will return to the benchmark’s performance and risk/return profile when the spreads between Germany and other eurozone countries diverge at an accelerating rate.
This comes at a time where Carbon neutral investing seems to be all the rage. With over 40 funds under the category being opened this year and a real push forward by the industry.