Smart beta specialist Ossiam has launched an ETF designed to give investors exposure to eurozone bonds with a focus on carbon reduction.
The strategy aims to replicate the Intercontinental Exchange 3-5 Year Euro Government Carbon Reduction Index.
The Ossiam Euro Government Bonds 3-5Y Carbon Reduction Ucits ETF 1C (EUR), listed on the Xetra exchange in Germany, incorporates a “systematic reduction” of the portfolio’s carbon footprint by weighting dependent on individual countries’ respective carbon footprints.
To limit relative risks, the composition returns to the benchmark’s performance and risk/return profile when the spreads between Germany and other Eurozone countries diverge at an accelerating rate, according to the Natixis Investment Managers affiliate.
The strategy has an average fossil carbon emission target 30% lower than that of the investment universe.
According to Bruno Poulin, chief executive of Ossiam, the fund is “an additional component for investors who wish to manage their portfolio’s total carbon footprint”.
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