Asset manager VanEck is changing the strategy of its three multi-asset ETFs, shifting to indices with ESG metrics.
Assets worth €72.9 million will be impacted by the change. The change relates to the €21.6m AUM VanEck Multi Asset Conservative Allocation ETF, the €29.1 million VanEck Multi Asset Balanced Allocation ETF and the €22.2m VanEck Multi Asset Growth Allocation ETF.
The three ETFs invest with different weightings in equities, government and corporate bonds, and real estate stocks.
To facilitate a stronger focus on ESG, index administrator IHS Markit is to replace two of the four components of the underlying indices.
Two of the funds’ four shared indices are set to be changed. The Solactive Global Equity Index will be replaced by the Solactive Sustainable World Equity Index and the Markit iBoxx EUR Liquid Corporates Index will be replaced by the iBoxx SD-KPI EUR Liquid corporates index.
The change in index methodology results in a corresponding change in the Sustainable Finance Disclosure Regulation (SFDR) classification for the three ETFs. The funds are now classified under Article 8 of the SFDR as products that promote, among other things, environmental and social characteristics, provided that the companies in which they invest practice good corporate governance.
VanEck noted that further Article 8 funds are being planned.
“We expect demand for index funds that incorporate ESG criteria to increase significantly in the future, while demand for funds that do not incorporate ESG considerations will decrease,” said Martijn Rozemuller, CEO at VanEck Europe.
“We, therefore, want to present our customers with a well-designed range of ETFs with a sustainable focus,” he added.
VanEck has already integrated ESG criteria into ETFs that track indices from the multi-asset sector: For the €30.8 million VanEck iBoxx EUR Corporates UCITS ETF, the iBoxx SD-KPI EUR Liquid Corporates Index replaced the Markit iBoxx EUR Liquid Corporates Index in February 2022.
“We believe it is in the best interest of investors to incorporate ESG factors and screenings into the underlying index methodology of our multi-asset ETFs as well,” Rozemuller said.
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