HSBC Europe Sustainable Equity UCITS ETF

Issuer: HSBC

Asset Class: Equity

TER: 15bps

Trading Currency: GBP

Pays Income: False

Listing Date: 05 Jun 2020

Ticker: HSEP

ISIN: IE00BKY55W78

This investment vehicle offers targeted exposure to a portfolio of large and mid-capitalisation companies across developed European countries, excluding the United Kingdom. The fund is structured to closely mirror the performance of a specific benchmark index that integrates sustainability criteria into its selection process. By employing a physical replication strategy, the fund directly invests in the constituent securities of the index, providing investors with transparent ownership of the underlying assets. This approach provides a core holding in European equities while adhering to a defined set of responsible investment principles.

The fund's underlying index is distinguished by its rigorous screening methodology based on environmental, social, and governance (ESG) factors. It systematically excludes companies with significant business activities in controversial sectors such as tobacco, controversial weapons, and thermal coal. Additionally, firms that fail to comply with the principles of the United Nations Global Compact are also removed. Beyond these exclusions, the index applies a 'low carbon' tilt, which involves adjusting company weights to favour those with lower carbon emissions and smaller fossil fuel reserves, thereby reducing the portfolio's overall carbon footprint. This product is suitable for individuals seeking to build a diversified European equity allocation with a clear focus on sustainability, offering a cost-efficient and rules-based solution to gain this specific market exposure.