Global investment manager Franklin Templeton announced today the launch of its new MSCI China Paris-Aligned Climate UCITS ETF, providing European investors with equity exposure to large and mid-capitalization stocks in China while reducing exposure to transition and physical climate risks.
Caroline Baron, Head of ETF Business Development, EMEA, Franklin Templeton said:
“We are delighted to add this new MSCI China Paris-Aligned Climate ETF at a competitive fee to our suite of Paris-Aligned Climate ETFs. The ETF is a natural extension of the Paris-Aligned Climate ETF product range we launched two years ago and provides exciting growth opportunities in Chinese stock markets by investing in securities transitioning to a low carbon economy.”
The new ETF will track the EU Climate Benchmark PAB and MSCI China Climate Paris-Aligned Indices and includes large and mid-cap Chinese equity securities. Indices that are labeled as Paris-aligned Benchmarks (PABs) under EU rules must meet criteria for asset selection that results in the index aligning with the long-term climate goals of the Paris Agreement. Criteria include a minimum reduction in greenhouse gas (GHG) emissions intensity of at least 50% compared to the market index, with annual GHG emissions intensity reductions of at least 7%.
The ETF is launched within the company’s Franklin LibertyShares range and is the third EU SFDR Article 9 compliant Paris-Aligned Climate strategy in the range.
Julian Ide, Head of EMEA distribution, Franklin Templeton said:
“We are very pleased to add this MSCI China Paris-Aligned Climate ETF to our LibertyShare product suite. Franklin Templeton has been an early provider of smart beta Paris-Aligned Climate UCITS ETFs in Europe and this sustainable, competitively priced Article 9 ETF should enable European investors to align their portfolios with the decarbonization goals of the Paris Climate Agreement whilst tapping Chinese equity markets.”
The Franklin MSCI China Paris Aligned Climate UCITS ETFwill be listed on the Deutsche Börse Xetra, the Borsa Italiana. London Stock Exchange and will be registered in Austria, France, Germany, Ireland, Italy, Spain, the UK, and the Nordics.
Rafaelle Lennox, Vice President, Senior ETF Product Specialist, Franklin Templeton said:
“By starting with a key benchmark like MSCI China, investors can align their core China equity holdings to the Paris Climate Agreement and reduce their exposure to climate change risks and capture opportunities in the low carbon transition. Additionally, the Paris-Aligned indices have a broader Environmental criteria consider how a company performs as a steward of nature., Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates., and Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. (Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.) component with the exclusion of multiple factors like tobacco, fossil fuel producers, and violators of the UN Global Compact principles, amongst other factors, thus creating a core sustainable solution.”
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