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Bertrand Alfandari : « We have broadened our range mainly by adding equity and bond ETFs with an ESG approach »

BNP Paribas Asset Management and Bertrand Alfandari, Head of ETF [1] Business Development want to continue to be one of the leading ESG ETF providers in Europe and believe that it is important to support its client expectations in this field, both in the equity and bond markets...

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Next-Finance : What has been the evolution of ETF assets in Europe since the beginning of 2019?

As a reminder, in Europe, at the end of October 2019, there were 1 800 ETF for an outstanding amount of EUR 809 billion compared with an outstanding amount of EUR 5 200 billion for 7 000 ETF around the world. So far this year, the European market has grown by 25% [2]. Growth is accelerating compared to the average over the last 10 years (18% per year) [3]. This dynamic is reflected in net inflows: in the first 10 months of 2019, these amounted to EUR 73 billion (vs. EUR 41 billion at the same time last year) [4].

Which asset classes (bonds, commodities) were the most dynamic?

At the end of October 2019, net inflows had been mainly focused on bond products: they accounted for nearly two-thirds of capital flows, particularly in corporate bond index ETFs. Even if these products represent the majority of outstanding amounts invested in ETFs, there was less enthusiasm among investors for equity ETFs over the first three quarters of this year.

And for BNP Paribas Easy?

Our outstanding ETF assets amounted to EUR 10.9 billion [5] at the end of October 2019, with net inflows of EUR 177 million [6] since the beginning of the year. The largest contributors were SRI or ESG index ETFs [7] [8], investing in either equity or bond markets. Our outstanding ESG ETF assets now amount to EUR 4.1 billion [9], representing nearly 40% of our assets under management. This makes us one of the leaders in the European ESG ETF market. This year, it is our low-carbon tracker that has met with the greatest success in our range. Launched in October 2008, it replicates the Low Carbon 100 Europe® NR Equity index. It allows investors to invest in a basket of securities considered to be the most virtuous in their sector in terms of greenhouse gas emissions.

For which themes have you recently expanded your offering?

Throughout the year, we have broadened our range mainly by adding equity and bond ETFs with an ESG approach. We launched three SRI bond ETFs on corporate debt in euro (BNP Paribas Easy Euro Corporate Bond SRI Fossil Free UCITS ETF, with three different maturities). On equity, we listed the first ETF on the circular economy (BNP Paribas Easy UCPI Circular Economy Leaders UCITS ETF) as well as the first green ETF on listed real estate (BNP Paribas Easy FTSE EPRA/NAREIT Developed Europe ex UK Green UCITS ETF). This ETF allows investors to be exposed to an index composed of listed property companies in developed countries in Europe (excluding the UK) whose portfolio weightings (tilt) take into account environmental criteria (energy consumption and obtaining environmental certification).

What has guided your choices? What are your targets in terms of flows for each of these themes?

We want to continue to be one of the leading ESG ETF providers in Europe and believe that it is important to support our client expectations in this field, both in the equity and bond markets. In parallel with the development of our ESG index offering, three of our ETFs were the first to obtain the SRI label from the French State last June. Others will follow in coming months. With regard to our inflow targets, we want to continue to grow our assets, particularly in ESG and smart beta in Europe.

What are your plans for the next few months?

As mentioned, we want to broaden our ESG offering: especially the bond compartment currently looks rather limited in Europe. In addition, we intend to continue to develop our educational tools, especially for private investors. In this respect, I would like to point out that, for the second consecutive year, we received the ETF educational prize from Boursorama at the Investor Awards last November.

RF , December 2019

Article also available in : English EN | français FR

P.S.

BNP Paribas Easy is a Luxembourg-registered SICAV compliant with Directive 2009/65 / EC. Investments in the funds are subject to market fluctuations and the risks inherent in investing in securities. The value of investments and the income they generate may rise as well as fall, and investors may not fully recover their investments. The funds described present a risk of capital loss. For a definition and a fuller description of the risks, please refer to the prospectus and KIID of the fund available on www.easy.bnpparibas.fr. Past performance is not indicative of future performance.

Footnotes

[1] ETF: exchange-traded fund

[2] Source: ETFGI as at 31 October 2019

[3] Source: ETFGI as at 31 October 2019

[4] Source: ETFGI as at 31 October 2019

[5] Source: BNPP AM as at 31 October 2019

[6] Source: BNPP AM as at 31 October 2019

[7] SRI: social and responsible investing

[8] ESG: environmental, social and governance

[9] Source: BNPP AM as at 31 October 2019

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