HSBC Asset Management Launches New Shariah Screened ESG ETFS
22 November 2022 – HSBC Asset Management (HSBC AM) further expands its ETF and indexing product suite with five new Islamic ESG ETFs.
The HSBC MSCI USA Islamic ESG UCITS ETF launched last week on the London Stock Exchange. The funds will be classified as Article 8 under the EU’s Sustainable Finance Disclosure Regulation (SFDR).
Four other Islamic ESG ETFs are set to launch in the upcoming months, these include:
- HSBC MSCI World Islamic ESG UCITS ETF
- HSBC MSCI Europe Islamic ESG UCITS ETF
- HSBC MSCI Emerging Markets Islamic ESG UCITS ETF
- HSBC MSCI AC Asia Pacific ex Japan Islamic ESG UCITS ETF
The index screening methodology first applies a set of Shariah exclusions (e.g. alcohol, gambling & pork related products). This Islamic screen has two levels, financial screening and business activity screening, to ensure compliance with Shariah investment principles. This is followed by a set of norms-based exclusions via a Socially Responsible Investment (SRI) screen (e.g. nuclear weapons & producers of firearms). There will be some overlap between the Islamic and norms-based screening (e.g. tobacco & controversial weapons). The methodology then tilts towards companies with stronger ESG credentials as defined by their MSCI ESG scores.
The ETFs aim to track their respective MSCI Islamic Universal Screened indices as closely as possible. They will be rebalanced annually and the restrictions are applied on a quarterly basis. MSCI applies a dividend purification factor to all reinvested dividends, reviewed on annual basis.
Olga de Tapia, Global Head of ETF & Indexing Sales, HSBC AM said: “There is growing appetite for a range of Islamic passive products as investors look to build Shariah compliant multi-asset portfolios. We are proud of our long-term commitment of serving Islamic investors worldwide and excited to bring innovative solutions to these clients. “We see a natural overlap between faith based screening and standard SRI filters and this set of toolkit funds will provide investors with a pathway to gain holistic risk profiled market exposure in compliance with Shariah law.”
| Fund name | ISIN | Stock exchange | Bloomberg ticker | Benchmark | Total expense ratio (TER) |
|---|---|---|---|---|---|
| HSBC MSCI USA Islamic ESG UCITS ETF | IE000I5NV504 | LSE | HIUA LN | MSCI USA CUST Islamic ESG Universal Screened Net USD Index | 0.30% |
Media enquiries to:
Mat Barling + 44 (0) 738 479 4295 mathew.barling@hsbc.com
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