UBS Asset Management’s range of sustainable ETFs have passed the EUR 10 billion mark of assets under management. The number represents a nearly tenfold increase from three years ago, when the products collectively reached EUR 1 billion.
In 2011, the firm was one of the first in the industry to offer sustainable ETFs with the launch of the MSCI World Socially Responsible ETF. Since then, UBS AM’s product shelf has grown with the unveiling of a further 18 products. The funds have varying degrees of environmental, social and governance (ESG) screenings, varying from ‘light’ to ‘dark’ green – low to high standards, respectively – on both equity and fixed income indices.
With the ETF market in Europe growing at a compound annual growth rate (CAGR) of 22% over the past three years, according to ETFGI, UBS AM’s sustainable offering has been met with even stronger investor demand – and a CAGR of approximately over 100% in the same period.
Clemens Reuter, Head of ETF & Passive Investment Specialists at UBS Asset Management, said:
“Appetite for our ESG ETF products has grown considerably among institutional and retail investors, who more and more wish to integrate specific sustainability criteria into their portfolios. We expect to add new products to our sustainable ETF range this year to meet this client
UBS AM is among Europe’s largest providers of sustainable ETFs, with a market share of more than 33% (according to Morningstar). The firm’s pioneer MSCI World Socially Responsible ETF was the first socially responsible ETF in Europe to reach EUR 1 billion in mid-2019 and currently has almost EUR 2 billion in assets under management. UBS AM was also the first provider to introduce an ETF with a sustainability screening for the S&P 500 Index.
Investors in sustainable ETFs have generally preferred equity-focused products, which represent a large majority of total invested assets in the segment. However, sustainably-screened bond ETFs are gaining ground, partly due to an increase in the number of sustainable products offering investors access to debt markets. A recent example of UBS AM’s offer in this space is the J.P. Morgan Global Government ESG Liquid Bond ETF, which integrates ESG criteria.
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