UBS MSCI EUROPE SRI ETF EUR ACC
| Issuer: UBS |
| Asset Class: Equity |
| TER: 18bps |
| Trading Currency: GBX |
| Pays Income: False |
| Listing Date: 22 Jul 2024 |
| Ticker: MESR |
| ISIN: LU2206597804 |
This investment vehicle offers exposure to the European equity market with a specific focus on socially responsible investing (SRI) principles. It is designed for those who wish to align their portfolios with strong Environmental, Social, and Governance (ESG) values. The fund physically replicates an index that screens for companies demonstrating high ESG performance relative to their sector peers. This methodology involves the exclusion of businesses with significant involvement in controversial activities, such as civilian firearms, tobacco, thermal coal, and controversial weapons. By doing so, it provides a means to invest in a portfolio of European companies that are leaders in sustainability practices.
The underlying portfolio is well-diversified, comprising large and mid-capitalization stocks from approximately 15 developed countries across Europe. This broad exposure helps to mitigate concentration risk associated with individual companies or specific nations. The index it tracks employs a 'best-in-class' approach, selecting the top 25% of companies in each GICS sector based on their ESG ratings. This strategy ensures that the investment is not just avoiding negative actors but is actively selecting for ESG leaders, making it a suitable core holding for conscientious investors seeking long-term growth from the European market.
As an accumulating share class, any dividends or income generated from the underlying stocks are automatically reinvested back into the fund rather than being paid out to investors. This process facilitates the power of compounding over time, as the reinvested capital can generate its own returns. This structure is particularly beneficial for long-term investors aiming for capital appreciation, as it simplifies the investment process and can offer tax advantages in certain jurisdictions by deferring income-related taxes.
