BNP Paribas AM launches new sustainable fixed income ETFs

BNP Paribas Asset Management announces a new expansion of its fixed-income ETF offering with the launch of two new Article 8 funds under the Sustainable Finance Disclosure Regulation (SFDR): BNP Paribas Easy € Corp Bond SRI Fossil Free Ultrashort Duration UCITS ETF and BNP Paribas Easy USD Corp Bond SRI Fossil Free UCITS ETF. Both are sub-funds of BNP Paribas Easy, a SICAV domiciled in Luxembourg, and are listed on Euronext Paris, Borsa Italiana, and Deutsche Börse Xetra since October 3.

BNP Paribas Asset Management's range of indexed fixed-income funds includes 12 ETFs investing in sovereign debt, investment-grade and high-yield corporate credit, and green, social, and sustainable bonds.

BNP Paribas Easy € Corp Bond SRI Fossil Free Ultrashort Duration UCITS ETF is an ultra-short-duration ESG strategy designed to expand our successful range of fixed-income ETFs, currently managing total assets of 10 billion euros. The ETF tracks the performance of the Bloomberg MSCI Euro Corporate Ultrashort Fixed and Floating Rate SRI Index, an investment-grade fixed-income index composed of approximately 400 securities with an average duration of 0.7 years. The index is constructed based on MSCI's sustainability criteria, which include value-based exclusions related to fossil fuels or controversial sectors, exclusions for ESG controversies that have received a "red flag," and potential exclusion of issuers with lower ESG ratings.

In addition to this new ultra-short-duration ETF, BNP Paribas Asset Management offers a wide range of short-term investment solutions, managing over 105 billion euros in money market funds and short-duration fixed-income products. All of its fund ranges incorporate sustainability criteria.

The addition of a USD-denominated corporate debt ESG strategy marks a significant step in the expansion of BNP Paribas Asset Management's fixed-income ETF range. The BNP Paribas Easy USD Corp Bond SRI Fossil Free UCITS ETF is designed to replicate the performance of the Bloomberg MSCI US Corporate SRI Sustainable ex Fossil Fuel Bond Index, an investment-grade debt index composed of approximately 3,400 securities with an average duration of 6.8 years. The index is constructed based on MSCI's sustainability criteria, which include value-based exclusions related to fossil fuels or controversial sectors and exclusions for ESG controversies that have received a "red flag." A minimum BBB ESG rating is required for issuer inclusion.

"Interest in fixed-income ETFs has continued to rise in 2023, following strong growth last year, when AUM increased by almost a third. We launched our first fixed-income ETF in 2019 and have been expanding our offering since then, in our efforts to meet the growing demand from clients for systematic exposure to fixed income with an ESG focus. These two new funds, with no exposure to fossil fuels, offer investors two additional asset allocation components that aim to achieve a reduced tracking error level compared to non-sustainability-linked benchmark indices."

Sol Hurtado de Mendoza, CEO of BNP Paribas Asset Management for Spain and Portugal.