UBS Asset Management has launched a global green bond ESG ETF filtering out bonds with maturities over 10 years.
The UBS ETF Global Green Bond ESG 1-10 UCITS ETF (GREENE) is listed on the Deutsche Boerse, Borsa Italiana, SIX Swiss Exchange with a total expense ratio (TER) of 0.20%.
GREENE tracks the Bloomberg MSCI Global Green Bond 1-10 Year Sustainability Select index, based on Bloomberg MSCI Global Green Bond index with additional sustainability considerations.
The proceeds of green bonds can only be used for sustainable projects such as renewable energy, clean transportation or sustainable water management.
In addition to the parent index’s exclusions, which include thermal coal and controversial weapons, the new index will include broader exclusions including civilian firearms, tobacco, alcohol, oil sands and Arctic oil.
The index also excludes companies with an MSCI rating below BBB or an ESG controversy score of 0.
It will also filter out bonds with maturities over 10 years and has a 3% issuer cap.
Clemens Reuter, global head of ETF and index fund client coverage at UBS AM, said: “Investors are increasingly seeking innovative solutions to help meet a range of climate and sustainability needs.
“This ETF enables investors to gain global exposure to green bonds with environmental benefits – while also considering the ESG profile of the underlying issuers.”
The ETF is labelled Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).
The new launch marks a continued push by the asset manager to ESG its portfolio.
Earlier this week, the Swiss giant announced it will switch its USA quality and prime value factor ETFs to indices incorporate ESG characteristics.
It also launched the UBS ETF S&P USA Dividend Aristocrats ESG Elite UCITS ETF (CHSB) and the UBS ETF CMCI Commodity Transition SF UCITS ETF (RENEW) in July.
