UBS ETF S&P 500 ESG USD A dis

Issuer: UBS

Asset Class: Equity

TER: 10bps

Trading Currency: GBX

Pays Income: False

Listing Date: 12 Apr 2019

Ticker: S5SD

ISIN: IE00BHXMHK04

This investment vehicle offers a refined approach to gaining exposure to the US large-cap equity market, combining the breadth of the S&P 500 with a sophisticated environmental, social, and governance (ESG) screening process. It is designed for investors who want to participate in the growth of leading American companies while ensuring their capital is allocated to firms that meet stringent sustainability standards. The strategy moves beyond simple negative screening by employing a 'best-in-class' methodology, resulting in a portfolio of companies that not only avoid controversial industries but also demonstrate strong ESG performance relative to their peers. This provides a core holding for a portfolio that is aligned with sustainable and responsible investment principles.

The fund's underlying index applies a multi-layered screening framework. Initially, it excludes companies involved in activities such as tobacco, controversial weapons, and thermal coal, as well as those violating the principles of the UN Global Compact. The key differentiator is its forward-looking climate focus; the index is specifically constructed to be compatible with a 1.5°C global warming scenario. This involves selecting and weighting constituents to achieve a significant reduction in carbon intensity and to align with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The result is a portfolio tilted towards companies that are better prepared for the transition to a low-carbon economy.

This product is particularly suitable for investors seeking a core US equity allocation with a tangible positive impact, especially concerning climate change. It allows for participation in the potential long-term growth of the American economy through companies that are leaders in corporate responsibility and sustainability. By integrating these non-financial factors, the strategy aims to identify resilient businesses that may be better positioned to manage risks and capitalize on opportunities in an evolving global landscape. The semi-annual distribution of dividends also makes it an attractive option for those looking for a potential income stream from their sustainable investments.