Franklin Templeton has expanded its Paris-Aligned Benchmark (PAB) climate range with the launch of an emerging markets ETF.
The Franklin MSCI Emerging Markets Paris Aligned Climate UCUTS ETF (FVEM) will list on the Deutsche Boerse on 10 March followed by the Borsa Italiana and the London Stock Exchange on 14 March. The ETF has a total expense ratio (TER) of 0.18%.
FVEM tracks the MSCI Emerging Markets Climate Paris Aligned index which currently offers exposure to 433 large and mid-cap stocks across 24 emerging markets that are helping the transition to a net-zero economy.
In line with the Paris Climate Agreement decarbonisation goals, the ETF will target a 50% reduction in carbon intensity versus the parent index as well as a reduction in carbon intensity of 10% per year in order to meet the 1.5C target.
According to the European Commission, €180bn of additional investment will be needed annually to hit the target by 2050.
FVEM will be managed by Dina Ting, head of global index portfolio management and Lorenzo Crosato, ETF portfolio manager at Franklin Templeton.
The ETF is labelled Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).
Franklin's existing PAB range:
Franklin Templeton S&P 500 Paris Aligned Climate UCITS ETF (USPA)
Franklin Templeton MSCI China Paris Aligned UCITS ETF (CHPA)
Franklin Templeton STOXX Europe 600 Paris Aligned UCITS ETF (EUPA)
Caroline Baron, head of ETF distribution at EMEA, Franklin Templeton, said: “Providing access to distinct opportunities in emerging markets at a competitive fee, this ETF reduces climate risk exposure by investing in companies providing solutions to mitigate climate change as well as those improving their resilience to its consequences, giving them a long-term competitive advantage.”
Rafaelle Lennox, head of UCITS ETF product strategy at Franklin Templeton, added: “With this ETF tracking the MSCI Emerging Market Climate Paris Aligned index, our investors will be able to align their core emerging market equity holdings to the Paris Climate Agreement, and thus reduce their exposure to climate change risks as well as capture opportunities related to low carbon transition.”
Last December, DWS launched the Xtrackers Emerging Market Net Zero Pathway Paris Aligned UCITS ETF (XEMN) with a TER of 0.20%
