The Ossiam US ESG Low Carbon Equity Factors UCITS ETF carries a TER of 0.45%
Ossiam has launched a low-carbon multi-factor ESG ETF on the London Stock Exchange (LSE), which listed on Deutsche Börse Xetra last week.
The Ossiam US ESG Low Carbon Equity Factors UCITS ETF applies a rule-based quantitative strategy to select US equities across the market-cap spectrum based on positive ESG factors.
The top 80% best-rated ESG stocks from this basket of prospective US equities will be selected from each industrial sub-sector before further filtering to exclude unsuitable securities, such as those that are involved in a controversial weapons business; have significant operations in tobacco or coal industries; have undergone severe controversy or are in breach of at least one of the UN Global Company.
Ossiam will use this pool of stocks to build two distinct but equally weighted portfolios; the stock factor portfolio and the sector factor portfolio.
The stock factor portfolio will feature individual stocks screened for significant exposure to standard equity factors and a lower carbon footprint, whereas the sector factor portfolio strategy will consider value and momentum factors.
Bruno Poulin, CEO at Ossiam, commented: “The launch of our latest ETF exploits the strength of evidence for equity factors as a means of achieving alpha over the long term.
“We believe that a static approach to factor investing is inefficient. Our dynamic approach recognises the existence of factors at both sector and stock level that complement each other under different market conditions. On that basis, our exposure to multiple factors at both levels enhances diversification.
“Built on sound academic foundations and taking into account ESG principles, the strategy aims to deliver long-term outperformance with limited tracking error.”
The Ossiam US ESG Low Carbon Equity Factors UCITS ETF carries a total expense ratio of 0.45%.