BNP Paribas Asset Management has introduced a euro-denominated share class for its BNP Paribas Easy MSCI World ex Controversial Weapons UCITS ETF (EMWE), listed on the Xetra and Euronext Paris exchanges.
BNP Paribas offers a range of ex-controversial weapons ETFs, including those providing exposure to global, emerging markets, Japanese and eurozone equities.
The fund has been available in dollars on Euronext since July 2016 under the ticker code EWRD. The new listings come on the back off strong investor demand for BNP Paribas’ range of ex-controversial weapons ETFs, as evidenced by their impressive inflows so far this year.
The ETF tracks the MSCI World ex Controversial Weapons Index, which has the MSCI World Index as its parent index. The MSCI World Index captures large- and mid-cap representation from 23 developed market countries.
As its name suggests, the MSCI World ex Controversial Weapons Index excludes companies from the parent index that have involvement with the production of cluster bombs, landmines, chemical and biological weapons, and depleted uranium weapons. Constituent selection is based on data from MSCI ESG Research.
The exclusion of companies that make controversial weapons brings the number of constituents in the index down by five to 1,647. The largest companies to be left out of the MSCI ex Controversial Weapons Index are Boeing, Lockheed Martin and General Dynamics, which make up 0.29%, 0.20% and 0.14% of the MSCI World Index respectively.
By a considerable margin, the dominant country exposure in the ex-controversial weapons index is the USA, which makes up 58.8% of the weight. The next largest exposures are to Japan (8.8%), the UK (6.6%), France (4.0%) and Canada (3.6%).
The sector breakdown shows that financials is the largest sector exposure with an 18.0% weight, followed by information technology (16.5%), health care (12.5%), consumer discretionary (12.6%), industrials (10.8%) and consumer staples (9.4%).
The largest single constituent in the index is Apple with a full 2.3% of the portfolio weight, quite a feat for an index with 1,647 members. The index is dominated by the US tech giants, as the next largest companies are Alphabet (1.7%), Microsoft (1.5%), Facebook (1.1%) and Amazon (1.1%). The only company to make the top ten by weight not from the US is Nestle, which contributes 0.7% to the portfolio.
As you would expect, the performance of the index is very similar to its parent. Over the past five years, the MSCI World ex Controversial Weapons has returned 11.65% per year with an annualised volatility of 9.89%, compared to the 11.73% return and 9.89% volatility recorded by the MSCI World over the same period.
The ETF currently has $73 million in assets under management and has a total expense ratio of 0.25%.