UBS Asset Management’s S&P 500 ESG ETF reaches USD1bn
The first exchange-traded fund (ETF) to integrate a socially responsible investing filter to the S&P 500 equity index has passed the mark of USD1 billion in assets under management.
The landmark solidifies the UBS ETF S&P 500 ESG UCITS ETF as the largest ETF tracking the ESG version of the renowned index.
The ETF enables investors to get similar exposure to the S&P 500 equity index, while enhancing its sustainability profile. It applies a ‘light green’ ESG screen by excluding around 25 per cent of the market cap of the parent index based on various ESG criteria and can be seen as an ESG alternative to a core equity allocation within portfolios.
The performance of the index tracked by the fund has been impressive since its launch in March 2019. The cumulative outperformance of the S&P 500 ESG index in comparison to the S&P 500 index has reached 550 bps (equivalent to 350 bps per annum). Attribution results indicate that this outperformance is well diversified across sectors and primarily stems from the selection of higher ESG-rated companies. For a portfolio with an active share of 25 per cent, covering broad US equities, it is a very solid investment outcome, highlighting the potential benefits of ESG investing.
The UBS S&P 500 ESG ETF was the first passive fund in the world that offered exposure to an ESG-screened version of the S&P 500 index, and therefore has the most established track-record in this category. It is also the largest fund tracking a sustainable version of the S&P 500 index globally. UBS AM was convinced from the start that investors wanted a sustainable option to invest in the S&P 500 index portfolio, the most popular and renowned index in the world, tracked globally by passively-managed assets of USD 4.6 trillion.
Clemens Reuter, Global Head of Passive & ETF Investment Specialists at UBS Asset Management, says: "Over the last 10 years we’ve built a sustainable ETF product shelf tailored to meeting investors’ different needs. Our funds provide a range of ‘shades of green,’ offering clients the opportunity to select the best solutions for their portfolios. As investor demand for sustainable products continues to grow, the S&P 500 ESG ETF will remain an excellent option for those seeking an ESG solution for accessing this key US Equities portfolio building block.”
Reid Steadman, Global Head of ESG Indices at S&P Dow Jones Indices, says: “We are pleased to see investors quickly adopting the S&P 500 ESG index as the leading independent ESG benchmark for US equity. The strong demand for ESG index-based portfolios underscores our belief that investors will continue to integrate ESG values into the core of their investments.”