UBS ESG ETF hits £2 billion as sustainable investing surges globally

A socially responsible exchange-traded fund (ETF) managed by UBS has now reached £2 billion in assets under management. The fund focuses on companies that lead in environmental, social, and governance (ESG) practices, reflecting the growing importance of sustainability in global finance. The UBS MSCI ACWI Socially Responsible ETF tracks the MSCI ACWI SRI Low Carbon Select Index. This index includes mid- and large-cap firms from both developed and emerging markets, chosen through a 'best-in-class' method. At least 20% of the lowest-rated companies from the standard index are excluded, ensuring only top ESG performers remain.

No single company holds more than 5% of the index's weight. The fund directly invests in the index's stocks, using a physical replication strategy rather than synthetic methods. Over 90% of its assets are allocated to businesses actively promoting ecological or social initiatives. Investors can access the ETF in different share classes. The GBP-distributing version carries an annual fee of 0.33%, while the overall expense ratio for the fund is 0.28%. In recent performance, the currency-hedged USD tranche saw a 6.48% return over the past six months.

The ETF's strict ESG criteria and broad market exposure make it a notable option for sustainable investors. With £2 billion in assets, it continues to attract those prioritising ethical and responsible investment strategies. The fund's performance and fee structure provide clear metrics for potential investors.