The sustainable fund is classified as Article 8 under the EU Sustainable Finance Disclosure Regulation and marks the fourth Paris Aligned Climate ETF in the company’s range, alongside its China, Europe and US funds.
The ETF will track the MSCI Emerging Markets Climate Paris Aligned index, an EU climate benchmark index, and will be comprised of large- and mid-cap stocks across 24 emerging markets transitioning to a low-carbon economy.
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The fund has been designed to support investors looking to reduce exposure to physical climate risk while seeking opportunities within the decarbonisation space.
It will be listed on the Deutsche Borse Xetra on 10 March, and on the Borsa Italiana and London Stock Exchange on 14 March, making it available to European and UK investors alike.
The fund will also be registered in Austria, Denmark, Finland, Greece, Germany, Ireland, Spain and Sweden.
Caroline Baron, head of ETF distribution, EMEA at Franklin Templeton, said the newly launched ETF will “help investors across Europe transition their assets in line with the Paris Accord”, at a “competitive fee” with a total expense ratio of 0.18%.
“With global temperatures on the rise and massive investment needed to reduce carbon emissions amid today’s rising energy needs, emerging markets play an important role in achieving net zero. We believe this new ETF can be a core sustainable investment solution for those looking to tap into this exciting growth story,” she added.
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The fund will be managed by Dina Ting, head of global index portfolio management, and Lorenzo Crostato, ETF portfolio manager.
Ting said significant investment in infrastructure, energy and technology will be required to meet the EU Action Plan’s three main objectives – namely, driving capital flows towards sustainable investment, mainstreaming sustainability into risk management and fostering transparency and long-termism.
She added: “An estimated €180bn of additional investment will be needed each year to achieve 1.5°C scenario. Our Article 8 ETF enables European investors to take part in this significant opportunity and further deepens Franklin Templeton’s wide range of sustainable products.”
