BOSTON--(BUSINESS WIRE)--State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT), today introduces two SPDR MSCI Climate Paris Aligned ETFs designed to help investors meet their climate objectives.
The funds, SPDR® MSCI USA Climate Paris Aligned ETF (NZUS) and SPDR® MSCI ACWI Climate Paris Aligned ETF (NZAC),2 track the MSCI USA Climate Paris Aligned and MSCI ACWI Climate Paris Aligned Indexes and are geared toward the growing number of investors interested in addressing climate change in their portfolios, both to mitigate climate risk and to invest in climate solutions.
As one of the largest research universities in the world, the University of California has been on the forefront of finding solutions to climate change and is on track to becoming carbon neutral by 2025. The university’s investment arm, UC Investments, began shedding its fossil fuel holdings in 20153 and now its $168 billion portfolio4 is virtually fossil free.
“Climate change almost certainly will drive significant structural shifts in the global economy, poses new risks to and opportunities for long-term investments, and potentially creates risks to the financial system” said Ron O’Hanley, Chairman & Chief Executive Officer of State Street Corporation. “Our primary focus is on long-term value creation for investors. We apply the insights we gain from working with global institutional investors to our own ESG priorities as a company.”
As previously announced, several fund changes were implemented to the SPDR MSCI ACWI Low Carbon Target ETF (LOWC). The fund’s name and ticker changed to the SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC) and its benchmark became the MSCI ACWI Climate Paris Aligned Index. The fund also underwent a 4:1 stock split and the total expense ratio has been reduced from 20 basis points to 12 basis points.5
The Climate Paris Aligned ETFs are core equity exposures that may help investors implement net-zero strategies6 and address climate change in a holistic manner. The funds track the MSCI USA Climate Paris Aligned and MSCI ACWI Climate Paris Aligned Indexes which are designed to support investors seeking to reduce their exposure to transition and physical climate risks and who wish to pursue opportunities arising from the transition to a lower-carbon economy while aligning with the Paris Agreement requirements.
“Our sustainability framework encompasses the foundational values and principles that guide our investment decisions,” said Jagdeep Singh Bachher, the University of California’s chief investment officer. “As an early stage investor in these new ETFs, we hope to open the door to others who, like us, believe that clean energy will fuel the world’s future and wish to invest in a decarbonized portfolio to improve the risk and return characteristics of their holdings over longer periods of time. We are excited that these funds are being brought to a broad investor base. We believe that investing in climate solutions, not climate problems, will provide superior risk-adjusted returns.”
“The introduction of NZUS and NZAC gives ESG investors more choices on their journey to net zero,” O’Hanley added.
Learn more here about Decarbonizing Portfolios with SPDR MSCI Climate Paris Aligned ETFs.
About SPDR Exchange Traded Funds
SPDR ETFs are a comprehensive family spanning an array of international and domestic asset classes. SPDR ETFs are sponsored by affiliates of State Street Global Advisors. The funds provide investors with the flexibility to select investments that are aligned to their investment strategy. For more information, visit www.ssga.com/etfs.
About State Street Global Advisors
For four decades, State Street Global Advisors has served the world’s governments, institutions and financial advisors. With a rigorous, risk-aware approach built on research, analysis and market-tested experience, we build from a breadth of index and active strategies to create cost-effective solutions. As stewards, we help portfolio companies see that what is fair for people and sustainable for the planet can deliver long-term performance. And, as pioneers in index, ETF, and ESG investing, we are always inventing new ways to invest. As a result, we have become the world’s fourth-largest asset manager* with US $4.02 trillion† under our care.
*Pensions & Investments Research Center, as of 12/31/20.
†This figure is presented as of March 31, 2022 and includes approximately $73.35 billion USD of assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated.
1 Source: University of California as of June 22, 2022: https://www.ucop.edu/investment-office/sustainable-investment/index.html.
2 Prior to 04/22/2022, the SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC) was known as the SPDR MSCI ACWI Low Carbon Target ETF (LOWC).
3 Big wins for UC sustainability in 2015 (January 20, 2016).
4 Source: UC Investments as of March 31, 2022.
5 As of April 22, 2022.
6 Net zero strategies are investment strategies that seek to align investments with a net-zero goal by a particular point in time (e.g., 2050). Net zero means that the total greenhouse gas (GHG) emissions being emitted should be lower than or equal to the total GHG emissions being removed or absorbed (ie, no positive emissions). On a net basis, no additional emissions should be released into the Earth’s atmosphere.
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Investments in mid-sized companies may involve greater risks than in those of larger, better known companies, but may be less volatile than investments in smaller companies.
Companies with large market capitalizations go in and out of favor based on market and economic conditions. Larger companies tend to be less volatile than companies with smaller market capitalizations. In exchange for this potentially lower risk, the value of the security may not rise as much as companies with smaller market capitalizations.
Net zero means that the total greenhouse gas (GHG) emissions being emitted should be lower than or equal to the total GHG emissions being removed or absorbed (ie, no positive emissions). On a net basis, no additional emissions should be released into the Earth’s atmosphere.
Net zero strategies are investment strategies that seek to align investments with a net-zero goal by a particular point in time (e.g., 2050).
A non-diversified fund that focuses on a relatively small number of issuers tend to be more volatile than diversified funds and the market as a whole.
Passively managed funds invest by sampling the index, holding a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. This may cause the fund to experience tracking errors relative to performance of the index.
A fund’s incorporation of ESG considerations in its investment process may cause it to make different investments than funds that do not incorporate such considerations in their strategy or investment processes. Under certain economic conditions, this could cause a fund’s investment performance to be worse than funds that do not incorporate such considerations. A fund’s incorporation of ESG considerations may affect its exposure to certain sectors and/or types of investments, and may adversely impact the fund’s performance depending on whether such sectors or investments are in or out of favor in the market.
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4499644.1.1.AM.RTL Exp. Date: 04/30/2023
