Scotia Global Asset Management, a division of ScotiaBank, one of Canada’s ‘Big Five’ banks, has rolled out a suite of low-cost core-portfolio funds with responsible investment mandates.
Scotia Global has launched ESG-aware versions of its core portfolio ETFs.
Listed on NEO Exchange, the suite includes a multi-sector Canadian bond strategy as well as three equity strategies targeting Canadian, US, and global ex-North America stocks.
Scotia made its ETF debut in November 2020 with the introduction of four regular core-portfolio funds offering essentially the same exposures but without the responsible overlay. These original funds have accumulated around C$1 billion in assets collectively.
With these latest launches, the firm has effectively doubled its ETF line-up.
As with the original line-up, the new funds are linked to indices from Frankfurt-based Solactive.
Each index provides broad market coverage while utilizing a comprehensive set of screens and filters to exclude securities that are not in alignment with key environmental, social, and governance (ESG) criteria.
Specifically, each index removes violators of established international norms such as UN Global Compact principles, companies with no women represented on the board or in senior management positions, and firms deriving notable revenue from adult entertainment, alcohol, coal-based mining and power generation, controversial and military weapons, fossil fuels, gambling, genetically modified organisms, nuclear power, oil sands and tobacco.
The remaining securities are then ranked within their respective sectors based on carbon intensity. The companies in the top quartile by carbon intensity in each sector are also eliminated.
The securities that pass the various screens and filters are weighted by market capitalization.
Neal Kerr, Head of Scotia Global Asset Management in Canada, said: “At Scotia Global Asset Management, we incorporate environmental, social, and governance factors into investment decision making and product design to deliver long-term value for our clients. We are pleased to further expand our line-up of dedicated responsible investment solutions and list them on NEO – an exchange that is committed to advancing ESG choices for investors and the ETF industry as a whole.”
The funds
The Scotia Responsible Investing Canadian Bond Index ETF (SRIB CN) comes with a management fee of 0.10% and an administration fee of 0.03%. The fund tracks the Solactive Responsible Canadian Bond Universe Liquid ex MPL TR Index which consists of CAD-denominated investment-grade government and corporate bonds issued in Canada.
The Scotia Responsible Investing Canadian Equity Index ETF (SRIC CN) comes with a management fee of 0.11% and an administration fee of 0.02%. It tracks the Solactive Responsible Canadian Equity Index.
The Scotia Responsible Investing US Equity Index ETF (SRIU CN) comes with a management fee of 0.14% and an administration fee of 0.03%. It is linked to the Solactive Responsible US Equity Index.
The Scotia Responsible Investing International Equity Index ETF (SRII CN) comes with a management fee of 0.17% and an administration fee of 0.05%. It tracks the Solactive Responsible International Equity Index.