Amundi launches Far East ex-Japan ESG Leaders ETF

Amundi has expanded its ‘ESG Leaders’ ETF suite with a new fund targeting equities listed in the Far East, excluding Japan.

The fund provides exposure to companies listed in the Far East, excluding Japan, with robust ESG profiles.

The Amundi MSCI AC Far East Ex-Japan ESG Leaders Select UCITS ETF has been listed on Deutsche Börse Xetra in euros (ACUU GY) and US dollars (ACUV GY).

Linked to indices from MSCI, Amundi’s ESG Leaders ETFs provide exposure to a subset of stocks from within their target geographic territory that have the strongest environmental, social, and governance (ESG) characteristics relative to their sector peers.

The new fund tracks the MSCI Ac Far East ex-Japan ESG Leaders Select 5% Issuer Capped Index which captures large and mid-cap stocks across two developed market countries (excluding Japan) and seven emerging market countries in the Far East region.

Using insights from MSCI ESG Research, the methodology first excludes companies with business activities in the alcohol, tobacco, gambling, nuclear power, and weapons industries as well as firms that are embroiled in severe ESG-related controversies.

The remaining constituents are then assigned an ESG score between AAA and CCC based on the most relevant ESG factors by industry and risk exposure. The rating process aims to identify ESG leaders and laggards within each industry.

The index selects the securities with the highest ESG scores while targeting a 50% sector representation versus the parent universe. Firms with ratings below BB (lower average) are not eligible for inclusion.

The selected constituents are weighted by float-adjusted market capitalization subject to a single issuer cap of 5%. The index is reconstituted annually in May and rebalanced quarterly.

As of the end of March, Chinese stocks dominated with a combined weight of 44.4% with the next-largest country exposures being Taiwan (20.7%), Hong Kong (10.0%), South Korea (9.7%), and Singapore (5.9%).

Financials stocks accounted for almost a third (30.3%) of the index weight, followed by consumer discretionary (18.7%), information technology (13.0%), and communication services (10.1%).

The ETF comes with an expense ratio of 0.25%.

Amundi offers a further six ESG Leaders ETFs which provide exposure to global developed, US, Europe, China, emerging market, and emerging market ex-China equities.

All seven ETFs are classified as Article 8 products under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).

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