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Today, South African investors will have an opportunity to get exposure to an Exchange Traded Fund (ETF) that invests in socially responsible large and mid-cap companies operating across 23 developed markets. This is after 1nvest, a specialist index fund manager, listed the 1nvest MSCI World Socially Responsible Investment Index Feeder ETF (ETFSRI) on the Johannesburg Stock Exchange (JSE). The ETF tracks the performance of the MSCI World SRI Select Reduced Fossil Fuels Index by investing in the iShares MSCI World SRI UCITS ETF.

 

The index represents companies that mitigate risks posed by climate change and exhibit high levels of Environment, Social, and Governance (ESG) performance. To qualify for inclusion in the index, companies are required to have an MSCI ESG rating of ‘A’ or above.

 

The ETFWLDSRI will trade under the share code ETFSRI and will be listed on the ETF sector of the JSE’s Main Board.

 

 

Valdene Reddy, Director of Capital Markets at the JSE, says the listing of the latest 1nvest ETF demonstrates the JSE’s commitment to remain a capital-raising platform of choice. As this segment grows, a listing on the JSE enables ETF issuers to attract investors that aim to diversify their portfolios, while fulfilling their ESG objectives.

 

“The weather conditions that are currently being experienced across the globe, is a reminder of the impact of serious environmental considerations. Globally, we are experiencing unusual weather conditions, including droughts and floods, at a rate that has never been seen before. ETFs like ETFSRI are important and essential as they are helping in the global commitments to manage climate change,” explains Reddy.

 

According to Reddy, investors are increasingly aware and deliberate about ESG impact and priority. It is in this spirit that the JSE remains committed to create an enabling environment that provides issuers and investors with a platform and relevant product to facilitate responsible investing. In June 2022, the bourse introduced its Sustainability and Climate Disclosure Guidance to promote transparency and good governance and guide listed companies on best practice in environmental, social and governance (ESG) disclosure. The guide aims to support businesses expand the quality and accessibility of information on sustainability-related risks and prospects that affect their organisations’ financial performance and impact on communities, the environment and the economy.

 

The listing of ETFSRI brings the number of ETF listings on the JSE to 91 with a total ETF market capitalisation of more than R114 billion.

 

“The 1nvest MSCI World Socially Responsible Investment Index Feeder ETF gives investors cost-effective and Rand-denominated access to a global index that takes a more meaningful screening and exclusion approach to evaluating stocks from an ESG and responsible investing perspective. Better yet, the underlying index has shown compelling long-term performance against the MSCI World Index,” concludes Ntombenhle Radebe, 1nvest Business Development Manager.

 

The ETF has an investment mandate that excludes companies in industries related to goods and services such as nuclear weapons, tobacco, civilian firearms, conventional weapons, alcohol, gambling, adult entertainment,   genetically modified organisms, thermal coal, and oil & gas.