Lonsec Recommends State Street Climate ESG International Equity Fund and SPDR E200
SYDNEY, 22 March 2021 State Street Global Advisors, the asset management arm of State Street Corporation (NYSE: STT), today announced that research house, Lonsec, has awarded two of State Street Global Advisors’ environmental, social and governance (ESG) funds with ‘Recommended’ ratings.
SPDR® S&P®/ ASX 200 ESG Fund (Ticker: E200):
SPDR’s ESG ETF -- E200 -- listed on the ASX on 5 August 2020, has received its first rating from Lonsec. It provides a similar risk and return profile to the S&P/ ASX 200 Index with enhanced ESG features. Its ESG characteristics are achieved through exclusionary screening and best-in-class rankings.1
Lonsec said State Street Global Advisors was a leading global manager in the global ETF market, with scale and resources to effectively manage and structure ETFs.
“This Australian equities fund invests in large capitalization stocks that have recognizable ESG characteristics, replicating the performance of a responsible investing aware index,” they said.
“The ETF’s Managed Expense Ratio (MER) is much lower compared to similar ESG ETFs on the ASX and the index’s underlying screening process is effective with clear criteria.”
E200 provides low-cost exposure to the S&P/ASX 200 Index, with a focus on companies with strong ESG characteristics, while also removing companies interacting with tobacco and controversial weapons, companies that generate 5% or more of their revenue from thermal coal and companies with low UN Global Compact (UNGC) scores. In addition, those with S&P DJI ESG Scores in the bottom 25% of companies within their industry groups are excluded.
State Street Climate ESG International Equity Fund:
The State Street Climate ESG International Equity Fund (the Fund) also received a ‘Recommended Index’ rating. Lonsec welcomed State Street Global Advisors’ mitigation and adaption approach to integrating climate objectives into portfolio construction while also leveraging a best-in-class ESG data platform.
“The Fund has been designed to align with global climate goals stipulated in the Paris Accord and the RCP 2.6 climate scenario developed by the Intergovernmental Panel on Climate Change,” they said.
“This has been done while seeking to provide investors with a broad-based global equity performance return profile and with an attractive MER.”
It has been designed to meet specific climate related objectives and ESG themes, while providing a broad-based exposure to global equity markets. It aims to achieve capital growth and income in line with the MSCI World ex-Australian Index while delivering on climate and ESG objectives. The Fund allocates higher weightings to companies with better overall ESG profiles determined by State Street Global Advisors’ ESG scoring system, R-Factor™.
State Street Global Advisors Head of Investments Australia Jonathan Shead said the funds had received significant interest from investors.
“We’ve leveraged our global insights and access to leading data providers to bring funds to Australian investors that may better align with their values, that help manage the financial risks of climate change and poor ESG practices, that are widely diversified and that are relatively low-cost,” he said.
“These funds provide access to equities with clearly labelled and defined ESG characteristics without a price premium.”
Following this review, State Street Global Advisors now has more than 12 ETFs and four managed funds with ‘Recommended’ or ‘Highly Recommended’ ratings from Lonsec.