Equal Weight ETF gains SFDR Article 8 status; joining 70% of HANetf UCITS ETFs classified as Article 8 or 9

  • In April the HANS-GINS Tech Megatrend Equal Weight UCITS ETF (ITEK) achieved Article 8 status
  • SFDR provides a framework to classify ESG risks and the social and environmental impact of investment funds
  • The HANetf platform now has 15 UCITS ETFs which are classified as Article 8 and two as Article 9 under SFDR representing approximately 70% of the product range
  • HANetf is committed to offering investors the opportunity to offset the carbon emissions of their investments through schemes such as HANzero™

May 2022 London UK

Last month our HANS-GINS Tech Megatrend Equal Weight UCITS ETF (ITEK) achieved Article 8 SFDR status owing to its objective to have a positive impact on the environment and society.[1] ITEK seeks to provide exposure to the disruptive technology companies in “Industry 4.0” that are changing the world through global megatrends. [2]

ITEK Subthemes

  • Blockchain
  • Robotics and Automation
  • Genomics
  • Cybersecurity
  • Future Cars
  • Digital Entertainment
  • Cloud Computing
  • Social Media

ITEK also applies an equal weight methodology weighing each of its subthemes equally to ensure that it captures growth wherever it occurs. [3] It also means mega-cap FAANG tech stocks do not dominate the portfolio.

It has been just over one year since Europe’s Sustainable Finance Disclosure Regulation (SFDR) was introduced. [4] Since 10th March 2021 funds available to investors in the EU have been classified as Article 6 8 or 9 based on their sustainability objectives.

Regular UCITS funds are given an Article 6 rating while Article 8 is for so-called “light green” funds that exhibit sustainable characteristics. [5] The top rating Article 9 is for funds that look to actively reduce carbon emissions. [6]

ITEK’s recent Article 8 status means that the HANetf platform now has 15 UCITS ETFs that are classified as Article 8 and two classified as Article 9 under Sustainable Finance Disclosure Regulation (SFDR). [7] This represents around 70% of HANetf UCITS funds by number of products. [8] This compares to 28% across the EU fund industry according to Morningstar. [9]

In addition to this both iClima Global Decarbonisation Enablers UCITS ETF (CLMA) and iClima Smart Energy UCITS ETF (DGEN) are Article 9. [10] Companies in the CLMA portfolio are those that directly enable CO2 avoidance. Meanwhile DGEN provides exposure to companies that enable the development of distributed energy generation.

HANetf’s SFDR Article 9 ETFs:

HANetf’s Article 8 funds have several approaches to sustainability. This includes best in class screening exclusions/negative screening and the promotion of sustainable investment characteristics. Our Article 8 ETFs have a range of strategies including ESG-rated gold miners ESG screened e-commerce/technology actively managed global equity and renewable/clean energy among others.

HANetf’s SFDR Article 8 ETFs:

HAN-GINS Cloud Technology Equal Weight UCITS ETF (SKYY)[13]

HAN-GINS Indxx Healthcare Megatrend Equal Weight UCITS ETF (WELL)[14]

Saturna Al-Kawthar Global Focused Equity UCITS ETF (AMAL)[15]

Digital Infrastructure and Connectivity UCITS ETF (DIGI)[16]

Global Online Retail UCITS ETF (IBUY)[17]

Solar Energy UCITS ETF (TANN)[18]

Fischer Sports Betting & iGaming UCITS ETF (BETS)[19]

AuAg ESG Gold Mining UCITS ETF (ESGO)[20]

Cleaner Living ESG-S UCITS ETF (DTOX)[21]

HANetf S&P Global Clean Energy Select HANzero™ UCITS ETF (ZERO)[22]

Saturna Sustainable ESG Equity HANzero™ UCITS ETF (SESG)[23]

Purpose Enterprise Software ESG-S UCITS ETF (SOFT)[24]

FMQQ Next Frontier Internet & Ecommerce ESG-S UCITS ETF (FMQQ)[25]

HAN-GINS Tech Megatrend Equal Weight UCITS ETF (ITEK)[26]

Electric Vehicle Charging Infrastructure UCITS ETF (ELEC)[27]

Beyond this HANetf seeks to neutralise carbon emissions through its HANzero™ scheme. HANzero™ in partnership with South Pole gives European investors the opportunity to neutralise the carbon emissions of their investments.[28] For funds using HANzero™ a portion of the total expense ratio (TER) is used to directly neutralise the carbon emissions of the portfolio through projects such as the Topaiyo Forest Conservation in Papua New Guinea and the Musi River Hydro Plant in Sumatra Indonesia. [29]

This began with HANetf S&P Global Clean Energy Select HANzero™ UCITS ETF (ZERO) which was Europe’s first carbon offset exchange traded fund. [30] In addition to this investors can also access Saturna Sustainable ESG Equity HANzero™ UCITS ETF (SESG) an actively managed ETF that provides access to long-term capital growth through companies with robust ESG policies. [31]

HANzero™ ETFs

HANetf S&P Global Clean Energy Select HANzero™ UCITS ETF (ZERO)

SaturnaSustainable ESG Equity HANzero™ UCITS ETF (SESG)

Manooj Mistry HANetf’s Chief Operating Officer had this to say: “HANetf are big believers in providing ESG solutions to investors. The world is waking up to the dangers posed by climate change as well as social and governance issues and investors are verymuch part of that. We are pleased to have such a high number of funds that are classified as Article 8 or 9 under SFDR and we will continue to work with our fund partners where appropriate to maintain and improve the ESG credentials of our ETFs.

“However as a pioneering ETF issuer we are also doing much more to boost the green credentials of funds whether it is through HANzero™ or creating funds with new and innovative approaches to green investing. Investors can also invest in SparkChange Physical Carbon EUA ETC (CO2) the first European ETC to prevent emissions by withholding carbon allowances (EUAs) from polluters or in The Royal Mint Physical Gold ETC (RMAU) which is partially backed by recycled gold bars that are 100% in compliance with the LBMA’s 2019 Responsible Sourcing guidelines.” [32]

As a white label platform HANetf does not have a “one size fits all” approach. Instead HANetf has worked with each of its partners to review the sustainability features of each product on a case-by-case basis. Therefore HANetf has some products that will have a sustainable objective and others that do not. This reflects the diversity of partners we work with and the diversity of the product range we offer.