Friday Funds: BNP Paribas AM launches two Article 8 fixed-income ETFs

The latest developments in ESG-related funds: Franklin Templeton launches EM Paris-aligned ETF; Nuveen named anchor investor for blue bond.

BNP Paribas Asset Management has launched two Article 8 fixed-income exchange-traded funds: Easy Euro Aggregate Bond SRI Fossil Free ETF and Easy JPM ESG EMU Government Bond IG 1-3Y ETF. The first aims to replicate the performance of the Bloomberg MSCI Euro Aggregate ex Fossil Fuel SRI Select Index, which excludes issuers in sectors with negative ESG impact, involved in ESG-related controversies, or in violation of the UN Global Compact. The second tracks the performance of the JP Morgan index by investing a minimum of 90 percent of its assets in debt securities issued by eurozone governments, while complying with ESG criteria. Both funds are registered for distribution in Austria, France, Germany, Italy, Luxembourg, the Netherlands, Spain and Sweden.

Franklin Templeton has launched an MSCI Emerging Markets Paris Aligned Climate UCITS ETF for European investors. The Article 8 ETF is the fourth Paris-aligned climate ETF in the asset manager’s range, joining China, Europe and US funds. The ETF will track MSCI’s Emerging Markets Climate Paris Aligned Index, an EU Climate Benchmark Index. The fund will include large- and mid-cap stocks across 24 emerging markets that are transitioning to a low-carbon economy. It will be managed by Dina Ting, head of global index portfolio management, and Lorenzo Crosato, ETF portfolio manager at Franklin Templeton.

Nuveen is acting as anchor investment for the Barbados blue bond which was sold last month. It is the second blue bond investment for the US fund, which was lead investor for the world’s first blue bond issued by the Seychelles in 2018. Proceeds from the Barbados bond will be used to preserve local tourism and fishery industries through sustainable ocean management practices. As it stands, only one percent of the water surrounding Barbados is protected. The bond – issued by The Nature Conservancy and the Inter-American Development Bank – will see $50 million spent over the next 15 years to facilitate the conservation of a minimum of 30 percent of Barbados’s marine space.

Norges Bank Investment Management reported a “turbulent” year for its pension fund performance in 2022. The fund returned -14.1 percent, or NOK-1,637 billion (-$154 billion, -€146 billion). However, the market value of the fund increased by NOK90 million in 2022 due to the value of the krone falling against the currencies in which the fund is invested, and because new capital was added to the fund. The fund’s return was 0.87 percentage points higher than the return on the benchmark index, equivalent to NOK117 billion.