AXA IM debuts active biodiversity ETF in Europe

AXA Investment Managers (AXA IM), the €820 billion asset management arm of French insurance group AXA, has made its ETF debut in Europe.

AXA IM is planning to introduce additional active ETFs supporting UN Sustainable Development Goals.

The firm’s ETF platform will focus on socially responsible funds with a particular emphasis on impact strategies that directly promote the United Nation’s Sustainable Development Goals (SDGs).

While ESG-tailored ETFs have recorded outsized net inflows in recent years, and the segment has become increasingly competitive, AXA IM aims to stand out from its rivals by focusing on the smaller, but rapidly growing, actively managed market.

The firm’s first ETF, unveiled alongside the new platform, is a global equity fund targeting firms supporting biodiversity efforts. As such, AXA IM notes that the fund directly supports UN SDGs on Clean Water and Sanitation, Responsible Consumption, Life Below Water, and Life on Land.

The AXA IM ACT Biodiversity Equity UCITS ETF has been listed on Deutsche Börse Xetra in euros (ABIT GY) and US dollars (ABIU GY).

The fund may invest in companies listed worldwide and from across the market capitalization spectrum, including up to a quarter of the portfolio’s total assets in emerging market stocks and up to 10% in Chinese A-shares.

AXA IM uses a combination of qualitative and quantitative analysis to seek out companies with attractive investment fundamentals that are providing solutions for biodiversity issues such as pollution on land and water, land degradation, fauna and flora destruction, desertification, and overconsumption.

Companies that do not directly support the targeted SDGs but have high-quality operations that minimize negative biodiversity externalities will also be considered for inclusion.

The ETF comes with an expense ratio of 0.70% and has been classified as an Article 9 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).

Marco Morelli, Executive Chairman of AXA IM, said: “To meet the changing demands of investors we must continue to innovate and enhance our investment offering. With the support of AXA and leveraging our key strengths, primarily within active management and responsible investing strategies, this platform will complement our existing fund range while answering client demand for ETF structured vehicles and offering them a better trading experience as well as easy access to such strategies, high liquidity, and enhanced transparency.”

Hans Stoter, Global Head of AXA IM Core, added: “We are observing long-term trends such as blockchain technology, banking disintermediation, and the emergence of online brokerage platforms which can transform the way funds are distributed. In that regard, we believe active ETFs will play an important role in the evolution of the asset management industry, and we believe we are well placed to embrace such an evolution.”

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