UBS Global Asset Management has expanded its range of exchange-traded funds (ETFs) listed on the London Stock Exchange (LSE) with the introduction of three new funds.

Clemens Reuter, Head of UBS ETFs.

The additional funds reflect UBS’s commitment to the London market and come just three months after the Switzerland-headquartered firm made its ETF debut on the exchange with the launch of over 60 funds across equity, fixed income and alternatives.

The three new funds are:

UBS-ETF MSCI World Socially Responsible
UBS-ETF MSCI North America Socially Responsible
UBS-ETF MSCI Brazil

The UBS-ETF MSCI World Socially Responsible and UBS-ETF MSCI North America Socially Responsible are based on ‘socially responsible’ indices from MSCI and offer investors the opportunity to invest in sustainably managed and ethically responsible companies, both globally and regionally.

The funds’ underlying indices, which are part of the MSCI Global Socially Responsible index suite, have been designed to target companies with high Environmental, Social and Governance (ESG) ratings. Companies that are inconsistent with specific values-based criteria are excluded; this means that companies operating in controversial industries, such as tobacco and nuclear, are barred.

The two ETFs are the first in Europe to be based on these indices and broaden UBS’s ethical offering, which already includes the UBS-ETF MCSI Europe & Middle East Socially Responsible and UBS-ETF MSCI Pacific Socially Responsible.

Clemens Reuter, Head of UBS ETFs, said: “The Socially Responsible ETFs enable investors to integrate their values and principles into their core portfolios. The modular product range covers the world’s major equity regions and is designed to be flexible and easy to implement. Socially Responsible ETFs may be suitable for investors who wish to invest in a broadly diversified portfolio of sustainably managed companies which has a passive management style and aims to achieve returns similar to those of an index.”

On the LSE, the UBS-ETF MSCI World Socially Responsible will likely compete against the iShares Dow Jones Global Sustainability Screened ETF (IGSG), while the UBS-ETF MSCI North America Socially Responsible could come up against the DB X-trackers S&P US Carbon Efficient ETF (XGRC). US-based and institutional investors might also consider a number of NYSE-listed ‘ethical’ funds, such as the Pax MSCI North America ESG Index ETF (NASI) and iShares MSCI KLD 400 Social Index ETF (DSI).

The third new fund, the UBS-ETF MSCI Brazil, enables investors to participate in the equity performance of Brazil, one of the fastest growing BRIC countries, by tracking the MSCI Brazil index. The MSCI Brazil provides exposure to 78 leading large and medium-sized companies representing around 84% of the entire free-float market capitalisation of the Brazilian equity market. The fund will compete alongside the HSBC MSCI Brazil ETF (HBRL) – until now the cheapest London-listed Brazil ETF – as well as other MSCI Brazil-based ETFs from Credit Suisse, iShares and Source.

Reuter said: “With the UBS-ETF MSCI Brazil, interested investors can profit from the growth in Brazil. The ETF provides a diversified investment solution that easily and flexibly covers the leading companies of Brazil.”

Each of the new ETFs is denominated in US dollars and comes with two share classes: the “A” share class is geared toward private clients, while the “I” share class addresses the needs of institutional investors and high net worth individuals. Trading of the A share classes will be in GBp (British pence), while the I share classes will trade in USD.