Franklin Templeton Launches New ESG-Tilted ETFs in Europe

Franklin Templeton has launched an S&P 500 ETF and an S&P World ETF with ESG tilts in Europe.

The Franklin S&P 500 Screened UCITS ETF (SP5S) and Franklin S&P World Screened UCITS ETF (SPWR) are listed on Deutsche Borse and will list on the London Stock Exchange (LSE) and Euronext Paris on April 17 and Borsa Italiana on April 24, with total expense ratios (TERs) of 0.09% and 0.14%, respectively.

Enhanced with ESG

SP5S tracks the S&P 500 Guarded index, which offers exposure to large- and mid-cap US equities with an “enhanced ESG profile.”

Meanwhile, SPWR tracks the S&P Guarded World index, capturing large- and mid-cap global equities with an identical ESG screen.

Both ETFs exclude companies involved in specific business activities, environmental, social and governance controversies or those that violate UN Global Compact principles and are classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).

Complement Core with ESG ETFs

Caroline Baron (pictured), head of ETF distribution, EMEA, at Franklin Templeton, said, “These ETFs would be suitable for investors looking to invest in core exposures that are article 8 compliant and those seeking a tight tracking versus the traditional benchmarks, such as S&P 500 and S&P World.

“These ETFs could be used with traditional core solutions to complement them for example.”

The launches come after the European Securities and Markets Authority (ESMA) updated its guidelines on ESG fund naming rules, with many issuers either stripping the moniker from existing ETFs or changing the methodology to comply with the updated guidelines. 

This article was originally published at etf.com sister publication ETF Stream.