To invest in the green transition, here are the new issues and ETFs on biodiversity already on the market.
Socially responsible investing (SRI) is a new strategy for traders and market operators to continue trading on the market without financing fossil fuel companies. SRI is an important way to support the green transition whilst also growing your portfolio. In particular, investing in ETFs dedicated to biodiversity represents a strategic choice from both an environmental and financial point of view.
The LIFE of the European Union program, with its substantial increase in funding for the period 2021-2027, reaching a total of 5.4 billion euros, underlines the crucial importance of addressing challenges related to biodiversity, climate change and quality of life.
But what makes SRI even more attractive are the numbers that emerge: in March 2023, the Commission announced an investment of over €116 million (124 million USD) in eight new strategic projects of the LIFE program. This data further strengthens the attractiveness of biodiversity-related companies. Not only are we embracing environmental responsibility, but we are exploiting growth and profit prospects in a sector that is constantly growing and transforming. In this article, we will see the new November issues on the topic and the ETFs available on the market.
SRI: new November Biodiversity ETF issues
DWS, a well-known investment player, recently introduced three new biodiversity-focused Exchange-Traded Funds (ETFs), further expanding options for socially responsible investors. These ETFs include the Xtrackers World Biodiversity Focus SRI UCITS ETF (XBIO), the Xtrackers Europe Biodiversity Focus SRI UCITS ETF (XBEE), and the listed on the German Stock Exchange and soon also available on the London Stock Exchange. With a total expenditure rate (TER) of 0.30%, these funds seek to address concerns related to biodiversity loss in a targeted way.
These ETFs track ISS Stoxx Biodiversity Focus SRI regional indexes that incorporate a "multi-stage filter" to select eligible companies. Initially, companies involved in activities harmful to biodiversity, such as the production of palm oil or pesticides, are excluded. Furthermore, the selection process considers companies with the strongest negative impact on biodiversity within their sector. These ETFs also take into account the United Nations’ social development goals related to biodiversity and climate, thus helping to promote sustainable investments. Additionally, there is a commitment to reduce the carbon intensity of the portfolio by at least 50% relative to the overall market index.
DWS joins a growing list of issuers that have introduced biodiversity ETFs, demonstrating an ever-increasing commitment to sustainable investing. Furthermore, DWS has completed its range of products focused on the climate transition with the recent introduction of the Xtrackers MSCI Emerging Markets Climate Transition UCITS ETF .
The best socially responsible investment options
On the Exchange-Traded Funds (ETF) market, there are, however, several options present that offer the opportunity to invest in companies linked to biodiversity. Here are some of these relevant ETFs:
1. AXA IM ACT Biodiversity Equity UCITS ETF USD Acc: This actively managed ETF invests in equities from developed and emerging markets around the world, with selection based on sustainability criteria and a focus on biodiversity. With an annual TER of 0.50%, it is an option that offers exposure to a diversified portfolio.
2. AXA IM ACT Biodiversity Equity UCITS ETF EUR Hedged Acc: The ETF similar to the one mentioned above operates with a currency hedge to Euro (EUR) and is actively managed. It has an annual TER of 0.70% and is an option for investors who prefer to invest in Euros.
3. HSBC World ESG Biodiversity Screened Equity: tracks the Euronext ESG Biodiversity Screened World Index, with a focus on equities from developed markets around the world. The annual TER is 0.35%, offering exposure to companies committed to biodiversity.
4. Ossiam Food for Biodiversity UCITS ETF 1A (EUR): this actively managed ETF invests in shares of companies active in the agriculture and food sectors, selected on the basis of financial, ESG, and biodiversity data. It has an annual TER of 0.75% and is an option for those who wish to invest in this specific sector.
5. BNP Paribas Easy ESG Eurozone Biodiversity Leaders PAB UCITS ETF: This ETF tracks the Euronext ESG Eurozone Biodiversity Leaders PAB index, with a focus on stocks of Eurozone nations. The annual TER is 0.35%, offering exposure to leading biodiversity companies.
Each ETF offers a unique opportunity for investors to participate in supporting biodiversity through sustainable investing, with differences in management, currency hedging, and other features that can meet specific investment needs.
|Disclaimer
The information and considerations contained in this article should not be used as the sole and principal basis on which to make investment decisions. The reader retains full freedom in his own investment choices and full responsibility in making them since he alone knows his risk appetite and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation for public savings.|
Original article published on Money.it Italy 2023-11-06 18:37:00. Original title: Come investire nella biodiversità con gli ETF?
