HSBC Emerging Markets Sustainable Equity UCITS ETF

Issuer: HSBC

Asset Class: Equity

TER: 18bps

Trading Currency: GBP

Pays Income: False

Listing Date: 28 Aug 2020

Ticker: HSEF

ISIN: IE00BKY59G90

This investment vehicle provides exposure to a broad basket of large and mid-capitalization stocks across various emerging market countries. It is designed to track a custom-screened index, meaning it selects its components from a parent emerging markets benchmark but applies specific exclusion criteria. The objective is to mirror the performance of this screened index, offering a diversified entry point into the growth potential of developing economies while adhering to certain investment principles.

The fund’s strategy incorporates a layer of responsible investing by systematically excluding companies involved in controversial sectors. This includes businesses with significant revenue from thermal coal, oil sands, and controversial weapons, as well as those that fail to comply with the United Nations Global Compact principles. This screening process appeals to investors who want to capture the higher growth prospects often associated with emerging markets but also wish to align their portfolios with environmental, social, and governance (ESG) considerations, effectively avoiding companies with potentially high non-financial risks.

This product is suitable for investors with a long-term horizon and a higher risk tolerance, given the inherent volatility of emerging market equities. It can serve as a core component for building a globally diversified portfolio, providing access to economies like China, Taiwan, India, and Brazil. The integrated ESG screen makes it particularly attractive to those looking to implement a sustainable investment approach without sacrificing broad market exposure. By offering a cost-effective, passively managed solution, it allows for strategic allocation to emerging markets with an ethical overlay.