Amundi Index MSCI Emerging Markets SRI PAB UCITS ETF DR (C)

Issuer: Amundi ETF

Asset Class: Equity

TER: 25bps

Trading Currency: GBX

Pays Income: False

Listing Date: 01 Oct 2019

Ticker: MSRG

ISIN: LU1861138961

This investment vehicle provides exposure to a broad basket of large and mid-capitalisation companies within emerging market countries, while integrating specific climate-related objectives. The strategy is designed for investors who wish to align their portfolios with the transition to a lower-carbon economy. It follows a benchmark that meets the minimum requirements of the EU Climate Transition Benchmark (CTB) regulations. The underlying methodology significantly reduces the portfolio's carbon intensity compared to a traditional market-cap-weighted emerging markets index and is constructed to be on a decarbonisation trajectory consistent with the long-term global warming targets of the Paris Agreement. This is achieved by systematically excluding companies involved in controversial weapons, tobacco, and thermal coal, as well as those violating social norms.

The portfolio construction process goes beyond simple exclusions by re-weighting the remaining constituents. Companies demonstrating a better climate profile, such as those with lower carbon emissions or those generating revenues from green solutions, receive increased allocations. Conversely, companies with higher carbon footprints see their weights reduced. This results in a diversified portfolio that not only captures the growth potential inherent in emerging economies but also mitigates exposure to transition risks associated with climate change. By favouring firms that are either leaders in managing their environmental impact or are key enablers of the green transition, the fund aims to deliver long-term sustainable growth.

This financial product is well-suited for long-term, growth-oriented investors seeking to incorporate a strong environmental, social, and governance (ESG) tilt into the emerging markets sleeve of their portfolio. It offers a solution for those who believe that companies addressing climate risks and opportunities are better positioned for future success. As a capitalising instrument, any dividends paid out by the underlying companies are automatically reinvested back into the fund, which can enhance compound growth over time, making it an efficient choice for building long-term wealth in a climate-conscious manner.