The Lion-OCBC Securities Singapore Low Carbon ETF, with AUM of S$60m ($43m) at launch, listed today on the Singapore Exchange (SGX).
Tracking the iEdge-OCBC Singapore Low Carbon Select 50 Capped Index, the Lion-OCBC Securities Singapore Low Carbon ETF offers investors access to the top 50 globally-listed Singapore companies and trusts with a lower carbon intensity than their industry peers, according to a statement by SGX.
Historically, the index has achieved an average of 50% reduction in weighted average carbon intensity (WACI) compared with a standard cap-weighted index, according to the exchange. The WACI metric rewards carbon-efficient processes, irrespective of companies’ size and total emissions, and is a metric recommended by the Task Force on Climate-related Disclosures.
“Investors who are sustainability conscious are spoilt for choice given the surfeit of ESG funds available,” said Gerard Lee, chief executive officer of Lion Global Investors, which is owned by OCBC Group.
“However, a majority of them are actually looking to invest in low-carbon companies as they see reducing carbon footprint as one of the most tangible ways to contribute to the environment.”
SGX extends ETF choices
The total global AUM of sustainability-linked ETFs listed on SGX now amounts to S$700m.
Lion Global Investors (LGI) launched Singapore’s first S-Reit ETF, and together with OCBC Securities, its first China tech-focused ETF and now the first Singapore low carbon ETF.
“LGI and OCBC Securities have been key innovators in Singapore’s ETF market,” said Michael Syn, head of equities of SGX Group.
During the past three years, the combined AUM of ETFs listed on SGX has grown by 170%, crossing S$13 billion as at end of March 2022. The number of retail ETF investors has also increased by over 150% during the same period, according to SGX.
About 40% of listed companies and over 80% of listed bonds on SGX originate outside of Singapore.