State Street Global Advisors Announces the Launch of Two SPDR® MSCI Climate Paris Aligned ETFs

Published on: 22 April 2022
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UC Investments (University of California)1, a frontrunner in the field of climate change, makes seed investments in funds created specifically for investors who want to reduce their carbon footprint.

Two SPDR MSCI Climate Paris Aligned ETFs are now available from State Street Global Advisors, the asset management division of State Street Corporation (NYSE: STT), to assist investors in achieving their climate goals.

The SPDR® MSCI USA Climate Aligned ETF (NZUS) and SPDR® MSCI ACWI Climate Aligned ETF (NZAC)2 track the MSCI USA Climate Aligned and MSCI ACWI Climate Aligned Indexes, respectively, and are designed for the increasing number of investors interested in addressing climate change in their portfolios, both to mitigate climate risk and to invest in climate solutions.

The University of California, one of the largest academic universities in the world, has been at the forefront of researching climate change solutions and is on schedule to achieve carbon neutrality by 2025. The financial arm of the university, UC Investments, started selling off its fossil fuel assets in 20153, and as of now, its $168 billion portfolio4 is essentially fossil fuel free.

Ron O'Hanley, Chairman & Chief Executive Officer of State Street Corporation, stated that

"Climate change almost certainly will drive significant structural shifts in the global economy, poses new risks to and opportunities for long-term investments, and potentially creates risks to the financial system."

"Creating long-term value for investors is our main priority. We use the knowledge we acquire from collaborating with international institutional investors to inform our corporate ESG initiatives."

As previously stated, the SPDRMSCI ACWI Low Carbon Target ETF underwent a number of fund modifications (LOWC). The fund's name, ticker, and benchmark were all changed to SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC) and MSCI ACWI Climate Paris Aligned Index, respectively. Additionally, the fund had a 4:1 stock split, and its overall expense ratio was decreased from 20 to 12 basis points. 5 The Climate Paris Aligned ETFs provide investors with core equities exposures that could support the adoption of net-zero strategies6 and a comprehensive approach to combating climate change.

The funds follow the MSCI USA Climate Paris Aligned and MSCI ACWI Climate Paris Aligned Indexes, which are made to assist investors seeking to lessen their exposure to transition and physical climate risks as well as who wish to pursue opportunities arising from the transition to a lower-carbon economy while adhering to the Paris Agreement's requirements. Jagdeep Singh Bachher, the chief investment officer at the University of California, stated that

"our sustainability framework incorporates the fundamental values and concepts that influence our investment decisions."

As an early adopter of these new ETFs, we hope to pave the way for other investors who, like us, are convinced that clean energy will power the future of the planet and who want to invest in a decarbonized portfolio to enhance the risk and return characteristics of their holdings over longer time horizons. We are thrilled that these funds are being made available to a wide range of investors. The best risk-adjusted returns will come from investing in climate solutions rather than climate problems, in our opinion.

Source: State Street news

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