Metzler Asset Management and Hanover Stock Exchange Team Up With Solactive to Issue New Metzler Global Ethical Values Mutual Fund Focusing on Institutional Investors in Germany and Austria
ESG stays in favor of institutional investors, and while aiming to achieve adequate returns, investors increasingly commit themselves to create a positive societal impact with their investments, too. Now, Metzler Asset Management GmbH, one of Germany’s asset managers with the longest time-honored traditions, in cooperation with Solactive, is launching the index-linked fund Metzler Global Ethical Values (ISIN: DE000A2QGBH0). The mutual fund with marketing authorization in Germany and Austria is managed close to the index and tracks the Global Ethical Values (GEVX) share index, which Metzler Asset Management designed and developed jointly with Börse Hannover (Hanover Stock Exchange) and Solactive. The fund will start trading timely after September 22nd on Hamburg Stock Exchange.
The Global Ethical Values Index (GEVX) represents companies that comply with ethical, ecological, social, and governance standards. Furthermore, the foundation of exclusion criteria is based on both ethical and sustainable ideals of the Catholic and Protestant church in Germany and the Catholic church of Austria. Furthermore, climate-based selection criteria exclude, for example, businesses active in fossil fuels and coal-based power generation. Currently, this selection results in an effective reduction of carbon emissions by 40% within GEVX, compared to the fund’s benchmark, the Solactive GBS Developed Markets Large & Mid Cap Index[1].
In addition to an exclusion-based approach, a combination of best-in-class and best-in-progress selection methods accounts for a holistic implementation of ESG criteria into the fund’s stock selection. While the best-in-class approach identifies companies with the highest ESG performance, the best-in-progress method incentivizes those companies that have made the most exceptional advancement in dealing with challenges in the social field or climate change in recent years. Moreover, the index holds a sophisticated weighting mechanism, which keeps its region and sector weights in line with its benchmark. This procedure provides investors with a high degree of diversification without sacrificing the exposure to companies complying with the high ESG standards.
Timo Pfeiffer, Chief Markets Officer at Solactive, comments: “ESG investing is at the heart of the financial markets, and standards often differ by region and different investor types. The new Global Ethical Values Index, which we created jointly with and for Metzler and Hanover Stock Exchange, here at hand focuses on German institutional investors, in particular churches and foundations, and their respective sustainability criteria. We are very pleased to be part of this project, which we are convinced will create a positive impact on society and the environment.”
[1] Measured by the ø GHG emissions caused per EUR 1 million in sales.