Franklin Templeton announces the launch of two Paris Aligned Climate UCITS ETFs within its Franklin LibertySharesTM range, thus being an early provider in the European market to launch cutting-edge smart beta ETFs compliant with the EU’s new Paris Aligned Benchmark (PAB) ….
Julie Moret, Global Head of ESG, Franklin Templeton,
The Franklin STOXX Europe 600 Paris Aligned Climate UCITS ETF and Franklin S&P 500 Paris Aligned Climate UCITS ETF will provide European investors with sustainable, low cost and core diversified European and US equity exposure, consistent with the transition to a low carbon economy, while ensuring portfolios are fully aligned with the de-carbonisation goals of the Paris Climate Agreement.
The funds will list on the Deutsche Börse (DB) on 30th July and on the London Stock Exchange (LSE) and Borsa Italiana on the 31st July. They will also be registered in Austria, Denmark, Finland, Sweden and Switzerland thereafter.
Julie Moret, Global Head of ESG, Franklin Templeton, explained: “The ascent of climate change on the EU’s regulatory agenda has resulted in the creation of two new EU climate benchmarks, which provide clear rules that ensure the indices are comparable and transparent. PAB’s philosophy is unique and forward looking as it aims to not only reduce climate change risks but also contribute to the transition to a low carbon economy and capture its benefits and opportunities.”
Caroline Baron, Head of ETF Sales EMEA, Franklin Templeton, commented: “We are delighted that our new Paris Aligned Climate ETFs will provide access to this ‘forward-looking’ investment solution at a very competitive cost of 15 basis points and will be the cheapest climate ETFs in the European market. These new launches are an extension of our current sustainable investment offering within our strong line up of 16 smart beta, active and passive ETF strategies for European investors. We believe these new solutions will appeal to a wide range of investors—specifically insurance companies, discretionary wealth managers and family offices—and will be used as either a replacement for traditional non-compliant indices or a complement to existing compliant holdings.”
Climate-aligned investing to become “core” within European investors’ portfolios
Julie Moret said: “The EU Climate Benchmark regulation suggests we will see a significant uplift in the adoption of climate-aligned investments across European markets, with investors moving away from the notion that they are niche products to building portfolios with sustainable finance at their core.”
Franklin STOXX Europe 600 Paris Aligned Climate UCITS ETF and Franklin S&P 500 Paris Aligned Climate UCITS ETF are smart beta ETFs managed by Dina Ting, Head of Global Index Portfolio Management, and Lorenzo Crosato, ETF Portfolio Manager at Franklin Templeton.
These ETFs provide exposure to European and US large- and mid-capitalisation stocks, respectively, with the aim of reducing climate change risk but of also accessing opportunities in the low carbon transition in a broad diversified equity strategy.
Both smart beta ETFs will track a new Paris-Aligned version of the STOXX Europe 600 and S&P 500 benchmarks, which will seek EU Climate Benchmark certification. The indices aim to align with the climate disclosure recommendations from the Task Force on Climate-related Financial Disclosures (TCFD).
Rafaelle Lennox, Senior ETF Product Specialist, Franklin Templeton, concluded: “We have collaborated with established index providers, S&P Dow Jones Indices and Qontigo on these new ETFs and selected the key parent benchmarks that we believe are most relevant to our clients, S&P 500 & STOXX Europe. Both index providers have partnered with carbon data specialists in the assessment of companies’ climate change risk profiles, policies, targets and decarbonisation trajectory in the development of these technical and ground-breaking climate benchmarks. These Paris-Aligned indices have ambitious carbon reduction targets but also meaningful broader environmental, social, and governance (ESG) components, thus, creating a core sustainable solution.”
- Franklin STOXX Europe 600 Paris Aligned Climate UCITS ETF will aim track the STOXX® Europe 600 Paris-Aligned Benchmark Index.
- Franklin S&P 500 Paris Aligned Climate UCITS ETF will aim to track the S&P 500 Paris-Aligned Climate Index.
|Fund Name (Paris Aligned Climate ETFs)||Franklin STOXX Europe 600 Paris Aligned Climate UCITS ETF|
|LSE Ticker GBP||EUPA|
|LSE Ticker EUR||PARI|
|Total Expense Ratio (TER) %||0,15%|
|Fund Name (Paris Aligned Climate ETFs)||Franklin S&P 500 Paris Aligned Climate UCITS ETF|
|LSE Ticker GBP||500P|
|LSE Ticker USD||USPA|
|Total Expense Ratio (TER) %||0,15%|