Franklin Templeton has introduced two new exchange-traded funds (ETFs) in Europe with environmental, social, and governance (ESG) considerations: the Franklin S&P 500 Screened UCITS ETF (SP5S) and the Franklin S&P World Screened UCITS ETF (SPWR).
Listed on Deutsche Börse, the ETFs are scheduled to debut on the London Stock Exchange and Euronext Paris on 17 April, followed by Borsa Italiana on 24 April. The funds come with total expense ratios (TERs) of 0.09% for SP5S and 0.14% for SPWR.
SP5S tracks the S&P 500 Guarded Index, which comprises large- and mid-cap US equities screened for enhanced ESG profiles. SPWR, meanwhile, mirrors the S&P Guarded World Index, applying a similar ESG filter to global equities.
Both indices exclude companies involved in controversial business activities or ESG violations, including breaches of UN Global Compact principles. The ETFs are classified under Article 8 of the EU’s Sustainable Finance Disclosure Regulation (SFDR), denoting products that promote environmental or social characteristics.
Caroline Baron, Head of ETF Distribution, EMEA at Franklin Templeton, noted the ETFs were tailored for investors seeking core market exposure aligned with Article 8 criteria and close tracking to traditional benchmarks such as the S&P 500 and S&P World. “These ETFs could be used alongside traditional core solutions to enhance ESG integration,” she said.
The launches coincide with recent updates from the European Securities and Markets Authority (ESMA) on ESG fund naming conventions, prompting many asset managers to revise fund labels or methodologies to meet the stricter requirements.
