BNP Paribas Asset Management (‘BNPP AM’) announces today the launch of the first two funds in its new suite of innovative fixed income exchange-traded funds (‘ETFs’). BNP Paribas Easy Sustainable EUR Corporate Bond and BNP Paribas Easy Sustainable EUR Government Bond are sub-funds of the BNP Paribas Easy Luxembourg SICAV and began trading on 20 February on Borsa Italiana and Deutsche Börse Xetra.
A solid bespoke sustainability approach, accessible through ETFs
BNPP AM’s ESG active fixed income ETF range applies an index-like approach combined with its proprietary approach to sustainability. Investors will benefit from BNPP AM’s proprietary ESG methodology, exclusion policies and active engagement.By integrating its own solid sustainable approach while aiming to replicate the performance of the benchmark, BNPP AM will offer the flexibility to adapt to future regulatory changes.
Marie-Sophie Pastant, Head of Index & ETF Strategies - Portfolio Management at BNPP AM comments:
"This new range combines our bespoke sustainable methodology with our indexing expertise. It will enable us to react promptly to any controversies without needing to wait for the next index rebalancing, and to respond rapidly to the changing environment. This will allow us to comply more easily with the different sustainability label criteria."
Starting with two new fixed income funds
BNP Paribas Easy Sustainable EUR Corporate Bond is an Article 9 fund according to SFDR regulation, with a 100% sustainable investment universe. The Benchmark Index is Bloomberg Euro Aggregate Corporate, an investment grade bond index with an average duration of 4.4 years[1].
BNP Paribas Easy Sustainable EUR Government Bondis an Article 8 fund according to SFDR regulation, with a targeted Sustainable Investment of at least 30%. The Benchmark Index is J.P. Morgan EMU Investment Grade Index, an investment grade bond index with an average duration of 7.1 years[2].
The universe of the sub-fund’s portfolio consists of the components of the Benchmark Index. Following the application of BNPP AM ESG integration approach, their weightings may deviate from those of the Benchmark Index and the sub-fund may not invest in some Benchmark Index components. The sub-fund aims to reach a comparable performance vs the Benchmark.
Both funds will benefit from a better alignment with MiFID 2 preferences, enhanced ESG reporting and an independent sustainability approach.
Providing clients with choice and flexibility
Lorraine Sereyjol-Garros, Global Head of Development for ETFs & Index Funds at BNPP AM comments:
"Fixed income will be a big focus for investors looking to navigate a challenging market environment in 2024. For those rethinking fixed income in their portfolios, active ESG fixed income management through an ETF structure provides investors with diversification, sound sustainable credentials and an affordable, convenient approach to portfolio construction.”
BNPP AM manages ETF and index fund assets totalling EUR 48.5 billion, including thematic and sustainable products.[3] BNPP AM’s range of fixed income index funds includes 14 ETFs[4] covering sovereign bonds, investment grade and high yield corporate credit, and green, social and sustainability-linked bonds. 90% of BNPP AM’s ETF range is classified as SFDR Article 8 or 9 (100% of fixed income ETFs) and more than 70% of the range has a European sustainability label (either ISR[5], TSI[6], FNG[7] or the Austrian Eco-Label[8]).
Key fund characteristics (as at 20 February 2024)
Fund name BNP Paribas Easy Sustainable EUR Corporate Bond
ISIN codes EUR Capitalisation: LU2697596745; EUR Distribution: LU2697596828
Bloomberg code EUR Capitalisation: BJLN GY, SEUCB IM; EUR Distribution: BJLP GY
Benchmark index Bloomberg Euro Aggregate Corporate Index
Bloomberg code LECPTREU
Investment type Physical
Fund currency EUR
NAV frequency Daily
Rebalancing Monthly, with daily monitoring
SRI(a) 2
Entry/Exit fee(b) 0%
OCR(c) 25 bps
Tracking error <0.5% (in accordance with the prospectus) / 0.11% (ex ante)
SFDR category(d) 9
AMF category(e) 1
Listing Deutsche Börse Xetra, Borsa Italiana
Fund name BNP Paribas Easy Sustainable EUR Government Bond
ISIN codes EUR Capitalisation: LU2697597552; EUR Distribution: LU2697597719
Bloomberg code EUR Capitalisation: BJLM GY, SEUGB IM; EUR Distribution: BJLQ GY
Benchmark index J.P. Morgan EMU investment Grade Index
Bloomberg code JPEIEMUI
Replication Physical
Fund currency EUR
NAV frequency Daily
Rebalancing Monthly, with daily monitoring
SRI(a) 3
Entry/Exit fee(b) 0%
OCR(c) 18 bps
Tracking error <0.25% (in accordance with the prospectus) / 0.06% (ex ante)
SFDR category(d) 8
AMF category(e) 1
Listing Deutsche Börse Xetra, Borsa Italiana
(a) Summary Risk Indicator, determined on a scale of 1 (lowest) to 7 (highest), the higher the risk the longer the investment horizon. It is calculated on a periodic basis and may therefore change over time. Regular consultation of the Fund's KIID/DICI is recommended.
(b) Entry/exit fee maximum 3% on the primary market only.
(c) Ongoing Charge Ratio (on an annual basis).
(d) Sustainable Finance Disclosure Regulation 2019/2088 of the European Parliament and of the Council of 27 November 2019 on information to be provided on sustainable development in the financial services sector. Article 8 - product promoting environmental or social characteristics.
(e) AMF (Autorité des marchés financiers) Doctrine Category 1 – approach based on significant commitment to management.
Footnotes
- ^[1] Source: Bloomberg, as at 31/1/23
- ^[2] Source: Bloomberg, as at 31/1/23
- ^[3] Source: BNPP AM, as at 31/01/24
- ^[4] Source: BNPP AM, as at 31/01/24
- ^[5] The Label ISR was created by the French Ministry of the Economy & Finance in 2016. It identifies funds with measurable and concrete results that implement a proven socially responsible investment methodology. See https://www.lelabelisr.fr/ for more information.
- ^[6] Towards Sustainability Initiative. The Belgian Towards Sustainability Label offers investor the assurance that all labelled products come with a minimal level of sustainability, as measured by the Towards Sustainability Quality Standard. See https://towardssustainability.be/ for more information.
- ^[7] The FNG Label was introduced in 2015 and is the quality standard for sustainable investment funds in German-speaking countries. See https://fng-siegel.org/ for more information.
- ^[8] The Austrian Eco-label (Österreichisches Umweltzeichen) for Sustainable Investment Funds is awarded by the Austrian Federal Ministry for the Environment to investment products that comply with specific Eco-label guidelines. See https://www.umweltzeichen.at/en/products/sustainable-finance for more information.
