HSBC Asset Management has introduced an ESG-focused version of its $13 billion global aggregate bond ETF, Europe’s largest fixed income ETF by assets under management.
Initially, only unlisted share classes of the HSBC Global Aggregate Bond ESG UCITS ETF will be available, with the firm announcing plans to list a share class on the London Stock Exchange (LSE) in the “coming weeks.”
The new ETF tracks the Bloomberg MSCI Global Aggregate SRI Carbon ESG-Weighted Select Index, designed to deliver reduced carbon emissions and an improved ESG rating compared to its parent index, the Bloomberg Global Aggregate Index.
Categorised under Article 8 of the EU Sustainable Finance Disclosure Regulation (SFDR), the ETF employs both exclusionary screens and weighted tilts across government-related and corporate bond sectors.
Olga de Tapia, Global Head of ETF & Indexing Sales at HSBC Asset Management said, “The launch of the Global Aggregate Bond ESG UCITS ETF reflects our commitment to developing innovative fixed income solutions, combining a globally diversified approach with sophisticated ESG methodologies. This latest addition to our fixed income ETF range aims to help investors achieve their objectives through diversified exposure while supporting the transition to a low-carbon economy.” This ETF is the latest HSBC product offered in both listed and unlisted formats.
The move follows HSBC’s decision in April 2023 to convert four global bond index funds into ETFs, making it the first firm to offer ETF and unlisted shares within an Ireland-domiciled fund. This approach, coupled with the Central Bank of Ireland’s naming convention requiring sub-funds with listed share classes to carry the “UCITS ETF” label, has helped HSBC rapidly climb the fixed income ETF rankings in Europe.
