UniCredit launches ESG Factor ETFs in Europe

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UniCredit Bank, via its subsidiary Structured Invest, has listed two exchange-traded funds (ETFs) based on the eurozone's first set of indices combining a factor strategy with environmental, social and governance (ESG) screens.

The ETFs will track the EURO iSTOXX ESG-X & Ex Nuclear Power Multi Factor Index and EURO STOXX ESG-X & Ex Nuclear Power Minimum Variance Unconstrained Index.

The first of these indices is designed to exploit sources of market-excess returns, so-called risk premia, whilst filtering out companies that do not comply with ESG principles, while the second takes the same responsible approach but seeking to lower the portfolio's volatility.

Both indices are based on the EURO STOXX Index and apply standardized ESG exclusion screens through data provider Sustainalytics, principally following the United Nations Global Compact principles of human and labor rights, the environment, business ethics and anti-corruption.

The UC iStoxx ESG-X Multi Factor UCITS ETF and the UC Stoxx ESG-X Minimum Variance UCITS ETF will be listed on Deutsche Börse and will be distributed across Austria, Germany, Italy, Luxembourg and France.

Vincenzo Spadaro, global head of Institutional Equity Derivatives, UniCredit, said: "In order to meet ESG investment criteria, asset owners need to look for solutions beyond the traditional market-cap-weighted index. With the launch of these ETFs, we are proving once again that we can respond flexibly to market developments and the demands of our clients."

Willem Keogh, STOXX's Head of ESG, Thematic and Factor Solutions, added: "We are delighted that UniCredit has decided to launch two ETFs on our indices, which combine two strong investment trends that have garnered growing assets and momentum in recent years - sustainability-based strategies on the one hand, and the passive and systematic exploitation of risk premia on the other."

The listing of today's products follows the December launch of the UC MSCI European Green Bond EUR UCITS ETF - the first ETF to provide investors with access to a broadly diversified range of liquid euro-denominated green bonds from European issuers.