UBS (Lux) Funds Solutions revealed a series of changes to its ETF sub-funds to ensure its nomenclature aligns with the ESMA guidelines for the application of ESG-related terminology. The rebranding will be effective from May 12, 2025, and is intended to streamline fund names, refresh sustainability indicators, and standardize share class naming procedures. The action reflects UBS's focus on offering investors easy-to-use, sustainable investment solutions that address changing regulatory requirements.

Among the changes, some sub-fund names will be simplified. The "Lux) Funds Solutions" naming convention will be dropped in some cases, and the word "Core" will be added to some fund names to highlight dominant market exposures. For instance, the UBS (Lux) Funds Solutions - MSCI World UCITS ETF will now be called UBS MSCI World UCITS ETF. Though the names are changed, the underlying objectives, policies, and indices of the sub-funds themselves will not be impacted.

Other changes are to names featuring ESG screening. A nice example is UBS (Lux) Funds Solutions - J.P. Morgan USD EM IG ESG Diversified Bond UCITS ETF, which becomes UBS J.P. Morgan USD EM IG Screened Diversified Bond UCITS ETF. The new names are intended to more accurately portray the investment methodology of the pertinent funds, at least with regards to their respective ESG screening procedures.

As far as the levels of sustainability are concerned, UBS is set to boost the minimum percentage of sustainable investments to 40% across a number of sub-funds, including those with "Sustainable" or "ESG" in their titles. The move comes in response to the increasing investor call for funds with an emphasis on responsible investment approaches. A good example of an impacted fund is UBS (Lux) Fund Solutions - Bloomberg MSCI US Liquid Corporates Sustainable UCITS ETF.

Standardization will also apply to share class naming. Indicators like "A" will be dropped, reducing labels once employed to indicate availability to all investors on the secondary market. Classes with protection from currency exposure will also now bear an "h" indicator, and currency brackets will be removed for simplicity and consistency.

All these modifications will be incorporated within the revised prospectus and supporting documentation, which are available at UBS Asset Management's office in Luxembourg or on the firm's website.

Refashioning and revamping reflect a deliberate attempt on the part of UBS to direct its ETF portfolios toward future regulation needs and changing investor needs in the area of sustainable finance. By streamlining fund names, boosting sustainability-related objectives, and rejuvenating investment disclosure, UBS wants to enhance its ESG-thematic funds to be less complex, more consistent, and more investor-friendly.

Source and Credits:
Source: Investing.com | Credits: KnowESG