OCBC Securities, Lion Global to list low carbon ETF on SGX in April

OCBC Securities and Lion Global Investors will list a new exchange-traded fund (ETF) on April 28 that focuses on Singapore companies with low carbon intensity.

The ETF, which will be listed on the Singapore Exchange (SGX), will track the iEdge-OCBC Singapore Low Carbon Select 50 Capped Index, OCBC said in a statement on Monday (Apr 11).

OCBC, together with bourse operator SGX, had launched the new index earlier in March, to track the top 50 Singapore companies by free-float market capitalisation with low carbon intensity.

The carbon intensity of each of the companies in the index are verified by Sustainalytics, an investment research firm specialising in environmental, social and governance (ESG) research, ratings and data, the bank said.

Wilson He, managing director of OCBC Securities, said: "Launching this product helps us take a concrete step in leading the way for corporations to walk the talk when it comes to sustainability."

He added that he is "confident that ESG investing has the potential to keep up with traditional funds", amid misconceptions that sustainability-linked investments result in poor returns.

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OCBC noted that the index - formed by excluding companies that have high carbon emissions or are heavily involved in the fossil fuels sector - has outperformed market benchmarks such as the Straits Times Index on the 3-year, 5-year and 10-year time horizons.

The low carbon ETF's initial offer period will begin on Apr 11 and end on Apr 22. When listed, the ETF will be available in both Singapore dollar and US dollar denominations.

Gerard Lee, Lion Global Investors' chief executive, also noted that the ETF offering will give investors convenience of access and low cost.

When launched, the ETF will allow investors to buy smaller lot sizes of 1 unit at a time, which can likely attract younger and newer investors who can start from as little as S$1 per unit, OCBC said.

The low carbon ETF is Lion Global's third ETF listed on the SGX in collaboration with OCBC Securities. The 2 companies had previously listed an ETF that tracks the Hang Seng Tech Index in Hong Kong in 2020, as well as another ETF focused on China in 2021.

READ MORE:

• SGX and OCBC launch low carbon index

• Lion Global, OCBC Securities to list China-focused ETF on SGX in August

• SGX RegCo launches sustainability courses; board directors are required to attend