Amundi MSCI Europe ESG Leaders UCITS ETF Acc

Issuer: Amundi ETF

Asset Class: Equity

TER: 20bps

Trading Currency: GBP

Pays Income: False

Listing Date: 12 Nov 2019

Ticker: ESGL

ISIN: LU1940199711

This investment product provides targeted exposure to European companies that demonstrate strong Environmental, Social, and Governance (ESG) characteristics. It is designed for investors who wish to integrate sustainability criteria into their core European equity allocation. The underlying portfolio is constructed by tracking an index that screens the broad MSCI Europe universe, first by excluding companies involved in controversial business activities such as tobacco, controversial weapons, and thermal coal. From the remaining universe, the index employs a 'best-in-class' approach, selecting the highest-rated ESG companies within each GICS sector, aiming to capture approximately 50% of the parent index's market capitalization in each sector.

By focusing on ESG leaders, this fund offers a way to potentially mitigate long-term risks associated with poor environmental practices, social inequalities, and weak corporate oversight, while seeking to capture opportunities in sustainable innovation and responsible management. It can serve as a foundational building block for a socially responsible portfolio, offering diversified exposure to large and mid-capitalization stocks across various developed European markets. The physical replication method ensures direct ownership of the underlying securities, providing transparency for the end investor.

The accumulating share class structure automatically reinvests any dividends paid by the constituent companies back into the fund. This feature enhances the power of compounding over time, making it particularly suitable for investors with a long-term growth objective who do not require a regular income stream from their investments. This strategy allows for a more efficient accumulation of capital by deferring tax on dividend distributions.