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VanEck Blog & Insights

VanEck Vectors MSCI International Sustainable Equity ETF ESGI

Fund description: ESGI invests in a diversified portfolio of sustainable international companies listed on exchanges in developed markets around the world (ex Australia) with the aim of providing investment returns, before fees and other costs, which track the performance of the index.

Index description:  MSCI World ex Australia ex Fossil Fuel Select SRI and Low Carbon Capped Index (Index) aims to represent the performance of a diversified portfolio of international companies that have high Environmental, Social and Governance (ESG) performance by: 

  1. Excluding companies that own any fossil fuel reserves or derive revenue from mining thermal coal or from oil and gas related activites; 
  2. Excluding companies whose business activities are not socially responsible investments (SRI); 
  3. Targeting ESG leaders in each sector; and 
  4. Excluding high carbon emitters.

 

Management style: Replication

 as at 20-Mar-19

  • Exchange

    ASX
  • ASX code

    ESGI
  • Bloomberg index code

    NA716517
  • Index provider

    MSCI Inc.
  • NAV1

    $21.33
  • Units outstanding1

    1,000,045
  • Net assets1

    $21.3M
  • Number of holdings1

    187
  • Inception date2

    06-Mar-18
  • ASX commencement

    08-Mar-18
1As of the close of the previous trading day.
2The date the ETF was seeded prior to quotation on ASX.

The NAV is generally calculated daily after all markets are closed for that day based on the closing price of the securities on the relevant foreign stock exchange. The NAV is then converted to AUD based on the relevant London WM Reuters 4pm exchange rate. This means, due to Australia's time zone, that the NAV will generally not be updated until around 3pm next business day.

as at 20-Mar-19

The Certification Symbol signifies that a product or service offers an investment style that takes into account environmental, social, governance or ethical considerations. The Symbol also signifies that VanEck Vectors MSCI International Sustainable Equity ETF (ESGI) adheres to the strict operational and disclosure practices required under the Responsible Investment Certification Program for the category of Product Provider. The Certification Symbol is a Registered Trade Mark of the Responsible Investment Association Australasia (RIAA). Detailed information about RIAA, the Symbol and ESGI's methodology, performance and stock holdings can be found at www.responsiblereturns.com.au, together with details about other responsible investment products certified by RIAA.

The Responsible Investment Certification Program does not constitute financial product advice. Neither the Certification Symbol nor RIAA recommends to any person that any financial product is a suitable investment or that returns are guaranteed. Appropriate professional advice should be sought prior to making an investment decision. RIAA does not hold an Australian Financial Services Licence.

Key points

Underlying Index
MSCI World ex Australia ex Fossil Fuel Select SRI and Low Carbon Capped Index

The Index comprises
The Index includes international listed securities that have high Environmental, Social and Governance (ESG) performance by applying the following negative and positive screens:

  • Excluding companies that own any fossil fuel reserves or derive revenue from mining thermal coal or from oil and gas related activites;
  • Exclusion of companies whose business activities are not socially responsible investments (SRI);
  • Inclusion of only the leading ESG performers in each secotor; and
  • Exclusion of high carbon emitters.

The Index aims to achieve diversification by capping the maximum weight assigned to each security, thereby avoiding concentration risk.

 

Summary of Index methodology

A four step process is followed to determine the Index from the eligible universe which is the securities in the MSCI World ex Australia Index (Parent Index).

  1. Fossil fuels exclusion
    All companies that own any fossil fuel reserves or derive revenue from mining thermal coal or from oil and gas related activities are excluded.

  2. Screening of SRI and ESG companies
    From the securities remaining after step 1, those whose businesses are involved in or exposed to the following activities are excluded:
    • Alcohol
    • Gambling
    • Tobacco
    • Military weapons
    • Civilian firearms
    • Nuclear power
    • Adult entertainment
    • Genetically modified organisms
    MSCI ESG Research data is then used to determine which of the remaining securities are to be included in the Reference Index representing 15% of the Free Float Market Capitalisation in each GICS® sector from step 1.

  3. Applying the carbon emitter screen
    The remaining companies from step 2 are then ranked by carbon emission intensity and the top 20% by number are excluded from the Index. The cumulative weight of securities excluded from any GICS sector is capped at 30% of the weight of the sectors from step 2. Securities are also excluded until the cumulative potential carbon emissions of the excluded companies reaches 50% of the sum of the potential carbon emissions of the constituents remaining from step 2.

  4. Component weighting and capping
    The remaining securities are then weighted by their Free Float Market Capitalisation subject to a 5% weighting cap.

 

Index provider
MSCI Inc. MSCI is not a related entity of VanEck Investments Limited.

ESGI is indexed to a MSCI index. ESGI is not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to ESGI or the MSCI Index. The PDS contains a more detailed description of the limited relationship MSCI has with VanEck and ESGI.

Index profile  

  • Bloomberg index ticker

    NA716517
  • Base date

    25-Nov-14
  • Rebalance frequency

    Quarterly

Top ten index constituents (%) as at 28-Feb-19

Total constituents: 187
Constituent name
TIcker
Weightings (%)
MICROSOFT CORP
MSFT US
5.24
SAP AG
SAP GR
2.70
ACCENTURE PLC-CL A
ACN US
2.65
ALLIANZ SE-REG
ALV GR
2.45
NVIDIA CORP
NVDA US
2.31
NOVO NORDISK A/S-B
NOVOB DC
2.30
GILEAD SCIENCES INC
GILD US
2.19
SIEMENS AG-REG
SIE GR
2.17
CATERPILLAR INC
CAT US
2.14
BANK OF NOVA SCOTIA
BNS CN
1.76
Top ten total (%) 25.91
These are not recommendations to buy or to sell any security. Securities and holdings may vary.

Index country weightings (%) as of 28-Feb-19

  • Country

    Weightings (%)
  • UNITED STATES

    30.5
  • GERMANY

    11.8
  • JAPAN

    11.4
  • FRANCE

    10.3
  • UNITED KINGDOM

    7.4
  • CANADA

    5.8
  • SWITZERLAND

    3.9
  • DENMARK

    3.4
  • SWEDEN

    3.1
  • NETHERLANDS

    3.1
  • HONG KONG

    2.1
  • SPAIN

    2.1
  • ITALY

    1.5
  • SINGAPORE

    1.0
  • BELGIUM

    0.8
  • NEW ZEALAND

    0.5
  • FINLAND

    0.4
  • LUXEMBOURG

    0.3
  • NORWAY

    0.3
  • ISRAEL

    0.2
  • PORTUGAL

    0.1
  • Total

    100.0

Index sector weightings (%) as at 28-Feb-19

  • Sector

    Weightings (%)
  • Financials

    22.6
  • Health Care

    17.0
  • Information Technology

    13.4
  • Industrials

    11.8
  • Consumer Discretionary

    11.7
  • Communication Services

    10.8
  • Consumer Staples

    7.5
  • Materials

    3.1
  • Real Estate

    1.6
  • Utilities

    0.5
  • Total

    100.0

Source: MSCI. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI's express written consent.