Amundi : launches Global Corporate SRI 1-5Y Highest Rated ETF with initial investment from the Latin American Reserve Fund

Amundi ETF

Amundi launches Global Corporate SRI 1-5Y Highest Rated ETF with initial investment from the Latin American Reserve Fund

June 26, 2024by Amundi

Amundi, Europe's largest asset manager^[1] and the European ETF leader^[2], announces the launch of the AmundiGlobal Corporate SRI 1-5Y Highest Rated UCITS ETF. This ETF will launch with an initial investment from the Fondo Latinoamericano de Reservas (FLAR - the Latin American Reserve Fund^[3]).

The fund replicates the Bloomberg MSCI Global Corporate A+ ESG Sustainability SRI 1-5 Year Index. This ETF offers an exposure to the Global Corporate Developed Universe^[4] and, to be included, corporate credit issuers must be "highest rated"^[5] with a minimum credit rating of A- and an MSCI ESG Rating of BBB or higher. The methodology also applies other ESG-related exclusions^[6].

Amundi, backed by extensive expertise in partnering with public entities globally, codesigned the ETF in partnership with FLAR, with the aim of helping Central Banks achieve their responsible investment objectives. The fund addresses as such Central Banks' requirements for transparency, diversification, and performance, combined with low tracking error. Additionally, Investment Grade Corporate bonds have high eligibility particularly among institutional clients and should be well suited to the responsible investment approach.

Fidel Jaramillo, Secretary General at FLAR said: "Our commitment to sustainable investments is reflected in our continuous efforts to align with industry best practices and regional cooperation. By collaborating with our peers in the region and the industry, we are dedicated to driving forward responsible investment strategies that promote transparency, diversification, and performance. In this very valuable collaboration with Amundi, FLAR has taken the initiative to become the seed investor in this ESG-oriented ETF, addressing critical market gaps and championing responsible investing. By doing so, FLAR contributes to the creation of a public good for the central bank community".

Gaëtan Delculee, Global Head of Digital Distribution and ETF Sales at Amundi also commented: "Our collaboration with FLAR showcases our client-centric approach and ability to leverage our ETF expertise and leadership in responsible investing to accompany institutions in their ESG journey. We believe Central Banks have a key role in shaping sustainable frameworks and we are proud to partner with FLAR to develop an innovative ESG solution adapted to their needs".

Footnotes

1. ^{^}[1] By FitchRatings, September 2023
2. ^{^}[2] According to ETFGI data as of December 2023, Amundi ETF is the leading ETF issuer with headquarters in Europe on the European market
3. ^{^}[3] FLAR provides financial support to Latin American countries mostly through three main lines of credit: balance of payments support, liquidity, and contingency. FLAR may grant loans or other financial support to the central banks of its member countries to contribute to correct or prevent situations of structural imbalance of their balance of payments, or to solve temporary liquidity difficulties.
4. ^{^}[4] Developed Markets only (as per Bloomberg Country of Risk definition)
5. ^{^}[5] Rating agencies assign grades to a debtor based on its ability to repay its debts and the likelihood of default. Rating agencies assign credit risk using a letter system. Although the main agencies vary in their ratings, as a general rule, the best-rated credit is generally AAA and the worst-rated is CCC.
6. ^{^}[6] It applies ESG Business Involvement screens and ESG Controversies (Excludes any issuer with a "Red" MSCI ESG Controversies Score (equal to zero), which measures an issuer's involvement in major ESG controversies and how well they adhere to international norms and principles.)

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