HSBC MSCI USA Climate Paris Aligned UCITS ETF (Dist)

Issuer: HSBC

Asset Class: Equity

TER: 12bps

Trading Currency: USD

Pays Income: False

Listing Date: 20 Jul 2022

Ticker: HPUD

ISIN: IE000O0KDG23

This investment vehicle offers targeted exposure to the U.S. large and mid-cap equity market, specifically designed for investors looking to align their portfolios with the climate objectives of the Paris Agreement. The fund aims to replicate the performance of a specialized index that systematically reweights securities from the broad U.S. market to meet stringent climate-related criteria. This strategy focuses on substantially reducing the portfolio's exposure to both transitional and physical climate risks. By favouring companies that are either leading in the transition to a low-carbon economy or are less exposed to its negative impacts, the fund provides a core equity holding that integrates forward-looking environmental considerations.

The underlying benchmark adheres to the rigorous standards of the EU's Paris-Aligned Benchmark (PAB) framework. This involves an initial significant reduction in carbon intensity compared to the parent universe of U.S. stocks, followed by a mandated year-on-year decarbonization pathway. The methodology goes beyond simple emissions reduction by also increasing exposure to companies generating 'green' revenues and those demonstrating strong climate governance. Furthermore, the index employs exclusionary screens to filter out companies involved in controversial weapons, tobacco, and those with significant business activities related to fossil fuels, ensuring a comprehensive approach to sustainable investing.

For the end investor, this fund presents an opportunity to gain broad exposure to the world's largest equity market while actively managing climate-related financial risks. It is structured for those who believe that the global transition to a sustainable economy will create both risks and opportunities, and who wish to position their capital accordingly. The fund serves as a powerful tool for constructing a resilient, long-term portfolio that not only seeks financial returns but also contributes to the goals of climate change mitigation, making it a compelling choice for environmentally conscious investors.