UBS ETF S&P 500 ESG (Hedged to GBP) A dis
| Issuer: UBS |
| Asset Class: Equity |
| TER: 13bps |
| Trading Currency: GBX |
| Pays Income: False |
| Listing Date: 12 Apr 2019 |
| Ticker: 5ESG |
| ISIN: IE00BHXMHR72 |
This investment product offers exposure to the large-cap US equity market, represented by the well-known S&P 500, but with an important environmental, social, and governance (ESG) overlay. It is designed for investors who want to align their portfolios with sustainability principles without diverging significantly from the performance profile of the broader US market. The strategy begins with the parent S&P 500 index and applies a rigorous screening process. This process excludes companies involved in controversial activities such as tobacco, controversial weapons, and thermal coal, as well as those that do not comply with the principles of the UN Global Compact.
After the initial exclusions, the remaining companies are evaluated based on their S&P Dow Jones Indices ESG Score. This score assesses a company's performance across various sustainability metrics. The methodology then targets the selection of companies that represent the top 75% of the market capitalization within each industry group, based on their ESG scores. This approach ensures that the resulting portfolio maintains a sector composition similar to the S&P 500, while significantly improving its overall sustainability profile. The fund uses a physical replication strategy, meaning it holds the underlying stocks directly.
This fund provides a core portfolio holding for investors seeking responsible investment opportunities within the world's largest equity market. By integrating ESG criteria, it aims to mitigate risks associated with poor corporate governance, environmental neglect, and social controversies, which could potentially enhance long-term, risk-adjusted returns. The currency-hedged share class further provides a layer of protection against fluctuations between the US dollar and the pound sterling, making it a suitable choice for investors whose home currency is the pound and who wish to reduce foreign exchange volatility in their US equity allocation.
