Yuanta Securities Investment Trust Co. (Yuanta SITC) has launched Taiwan’s first ESG-focused ETF, which will be listed on the Taiwan Stock Exchange (TWSE).
The Yuanta FTSE4Good TIP Taiwan ESG ETF is benchmarked against the FTSE4Good TIP Taiwan ESG Index, which includes companies listed on the TWSE that meet globally recognized ESG inclusion standards used by the FTSE4Good Index Series.
Launched in 2018 in partnership with Taiwan Index Plus Corp, the index is the first domestic Taiwan benchmark developed using FTSE ESG Ratings and data model. The index captures 73 firms from the FTSE Taiwan Index.
In 2019, Taiwan Bureau of Labor Funds (BLF) also selected the index for a five-year passive mandate with an initial total size of US$1.4 billion, recognizing the growing demand from Taiwanese investors to incorporate sustainable investment into their portfolios.
The index is constructed using the FTSE4Good Emerging Index with selection criteria covering ESG Ratings as well as financial performance criteria. The ESG Ratings are comprised of an overall rating that breaks down into underlying ESG exposure measures and a performance score based on over 300 individual indicator assessments.
The index is designed for use in the creation of index tracking funds, derivatives and as performance benchmarks. The value of assets tracking ETFs benchmarked to FTSE Russell indexes globally increased by 9% in the first half of 2019 to US$705 billion.
“We are delighted that Yuanta SITC has selected the FTSE4Good TIP Taiwan ESG Index for its newly-listed exchange traded fund. Sustainability is an increasingly important component of investment decisions for domestic and international investors,” says Evan Ong, managing director ETP Relationships, Asia, FTSE Russell.
“According to the Global Sustainable Investment Alliance (GSIA), by the end of 2018, the global sustainable investment amounted to more than 50 trillion US dollars, within which the growth rate of E (Environment), S (Social), G (Governance) integration into investment portfolios is the fastest. Yuanta SITC hopes to provide a unique product, both to support and highlight the companies that meet the globally recognized ESG standards in the domestic market, and to provide investors with further options in sustainable investment,” says Julian Liu, Chairman, Yuanta SITC.