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ESGIAU VanEck MSCI International Sustainable Equity ETF Please read important disclosure Close important disclosure false
  • ESGI
    VanEck MSCI International Sustainable Equity ETF

    ESGI
    VanEck MSCI International Sustainable Equity ETF

    • NAV
      $34.39

      as at 02-Oct-24
    • Total Net Assets
      $194.89M
    • Dividend Frequency
      1 each year
    • Management fee (p.a.)
      0.55%
    • Number of securities
      158
    • Inception Date
      06-Mar-18
    The NAV is generally calculated daily after all markets are closed for that day based on the closing price of the securities on the relevant foreign stock exchange. The NAV is then converted to AUD based on the relevant London WM Reuters 4pm exchange rate. This means, due to Australia’s time zone, that the NAV will generally not be updated until around 3pm next business day.
    ESGI_PROFILE_IMAGE-update

    Overview

    Fund Description

    Our international sustainable ETF, ESGI gives investors exposure to a diversified portfolio of sustainable international companies listed on exchanges in developed markets around the world (ex Australia). Our international sustainable ETF aims to provide investment returns, before fees and other costs, which track the performance of the Index.

    Key benefits

    International equity portfolio incorporating investor values and beliefs

    True-to-label International Sustainable equity ETF encompassing both values-based and environmental, social and governance (ESG) investing.

    A focus on ethical standards and low carbon impact

    Screening for fossil fuels, human rights controversies and socially responsible investments (SRI) combined with ESG leadership and low carbon impact.

    State-of-the-art ESG leadership approach

    Leveraging MSCI's leadership, resources and its ESG and carbon emission data metrics.

    Index key points

    Underlying Index

    MSCI World ex Australia ex Fossil Fuel Select SRI and Low Carbon Capped Index

    Summary of Index methodology

    The following steps summarise how MSCI Inc. (MSCI) constructs the Index:

    1. The eligible universe of securities is defined as the securities in the MSCI World ex Australia Index.
    2. Securities are screened for exclusion based on the following business activities as determined by MSCI:

    Business Involvement Screens

    All companies deriving 5% or more aggregate gross revenue from:

    Production

    • Companies that produce or publish motion pictures and videos containing sexually explicit material
    • Companies that produce sexually explicit video games with a rating of Nudity and Strong Sexual Content as provided by the U.S. Entertainment Software Rating Board.
    • Companies involved in the live adult entertainment industry including companies that own, operate or license commercial establishments.
    • Companies that own or operate websites with sexually explicit content intended for adult audiences,
    • Companies that produce sexually explicit programs made specifically for television targeting adult viewers, including pay-per-view.

    Distribution

    • Companies including cable or digital TV providers, involved in the distribution of adult entertainment products and services.
    • Companies are still considered distributors if they sell directly to final consumers

    Retail

    • Companies involved in the retail of adult entertainment products of adult entertainment products or services.

    All companies deriving 5% or more aggregate gross revenue from:


    Production

    • Companies that produce alcoholic products including brewers, distillers and vintners and companies that own or operate wine vineyards.

    Distribution

    • Companies involved in the wholesale distribution of alcohol products to retailers.

    Retail

    • Companies that generate revenue from sale of alcoholic products, excluding distribution. This includes supermarkets, liquor stores, bars and pubs and duty-free stores.

    Licensing

    • Companies that license a brand name to alcoholic products.

    Supply

    • Companies that produce and supply key raw materials and other products used specifically to produce alcoholic products.  

    All companies that:

    • Are involved in commercial animal husbandry for the purpose of food production. This means:
      • Companies with farms that focus exclusively on organics or that are free-range;
      • Companies such as supermarkets that have “private label” animal products, unless they are involved in the supply chain;
      • Companies that own milk or dairy processing facilities, unless they also own or operate the dairy farms where cows are raised and milked;
      • Companies that own or operate meat-processing facilities but do not raise or slaughter animals;
      • Companies involved in the raising, breeding, or processing of fish and other aquaculture products; and
      • Companies involved in the raising, breeding, or processing of animals exclusively for entertainment, leisure, labor, scientific, industrial and other similar purposes.
    • All companies that conduct animal testing for non-medical products.    

    All companies:

    • that create, fabricate, produce or manufacture firearms and small arms ammunitions for civilian markets. It does not include companies that cater to the military, government, and law enforcement markets; or
    • deriving 5% or more gross revenue from the distribution (wholesale or retail) of firearms or small arms ammunition intended for civilian use.    

    All companies deriving:  

    • 5% or more gross revenue from the production of conventional weapons; or
    • 15% or more aggregate gross revenue from weapons systems, components, and support systems and services. This means:
      • Companies that provide weapons support and services, including research, development, testing and evaluation; analysis and planning; equipment maintenance, repair, and overhaul; systems support; weapons training and simulation systems and services;
      • Companies that produce critical components for conventional weapons systems;
      • Companies that produce conventional weapon systems intended for military markets;
      • Companies that produce nuclear warheads, missiles, and delivery platforms capable of deploying nuclear weapons;
      • Companies that provide support services for nuclear weapons;
      • Companies that produce essential intended or dual-use components for nuclear weapons and nuclear weapon delivery systems;
      • Companies that produce biological or chemical weapons systems; and
      • Companies that produce critical components for biological and chemical weapons systems;  

    All companies with an involvement in the production of cluster bombs, landmines, depleted uranium weapons, chemical and biological weapons, blinding lasers, non-detectable fragments and incendiary weapons.

    • Cluster Bombs
      • cluster bombs and munitions, or the essential components of these products.
    • Landmines
      • anti‐personnel landmines, anti‐vehicle landmines, or the essential components of these products.
    • Depleted Uranium Weapons
      • depleted uranium weapons and armor.
    • Chemical and Biological Weapons
      • chemical and biological weapons, or the essential components of these products.
    • Blinding Laser Weapons
      • weapons utilising laser technology to cause permanent blindness.
    • Non-Detectable Fragments
      • weapons that use non-detectable fragments to inflict injury.
    • Incendiary Weapons (White Phosphorus)
      • weapons using white phosphorus.
    For more details, refer to the methodology of the MSCI Global Ex-Controversial Weapons Indexes available in the documents section below.  

    All companies with an industry tie to fossil fuels (thermal coal, oil and gas). MSCI refers to this as an "any tie" screen and is defined as companies deriving revenue (either reported or estimated) from the following activities:

    • owning fossil fuel reserves; or
    • direct thermal coal mining activities:
      • mining of thermal coal; and
      • selling to third parties; or
      • contract mining services
    • generating power from fossil fuels; or
    • oil and gas activities, being distribution/retail, equipment and services, extraction and production, petrochemicals, pipelines and transportation and refining but excluding biofuel production and sales and trading activities.

    Companies with evidence of owning metallurgical coal are not in the scope of the above screens.

    A company may have exposure to fossil fuels through its direct or indirect equity investment in other companies owning fossil fuel reserves. If a company is a holding company with indirect holdings in fossil fuels related entities, the screen is activated if these holdings either constitutes 10% or more of the holding company’s portfolio of assets, or the holding company owns 20% or more of the identified fossil fuels related entities.

    For further details, please refer to the MSCI Fossil Fuels and Power Generation Metrics Methodology (p. 15-16/26) and Climate Change Metrics Methodology page 92/113 which are found in the Documents section below.

    MSCI Fossil Fuels and Power Generation Metrics Methodology.  

    All companies deriving 5% or more aggregate gross revenue from:

    Operations
    Companies that own or operate gambling facilities such as casinos, racetracks, bingo parlors or other betting establishments.

    Support

    • Companies that provide key products or services fundamental to gambling operations.
    • Companies that provide products or services solely support end users, rather than company gambling operations are excluded from this screen.

    Licensing

    • Companies that license their brand name to gambling products.
    All companies deriving 5% or more gross revenue from activities like genetically modifying plants, such as seeds and crops, and other organisms intended for agricultural use or human consumption.       
    All companies with an involvement in nuclear power as defined under MSCI’s “Nuclear Power – Any Tie” screen in the MSCI ESG Business Involvement Screening Research Methodology available in the documents section below.     

    All companies that:

    • manufacture nuclear warheads and/or whole nuclear missiles; or
    • manufacture components that were developed or are significantly modified for exclusive use in nuclear weapons (warheads and missiles); or
    • manufacture or assemble delivery platforms that were developed or significantly modified for the exclusive delivery of nuclear weapons; or
    • provide auxiliary services related to nuclear weapons; or
    • manufacture components that were not developed or not significantly modified for exclusive use in nuclear weapons (warheads and missiles) but can be used in nuclear weapons; or
    • manufacture or assemble delivery platforms that were not developed or not significantly modified for the exclusive delivery of nuclear weapons but have the capability to deliver nuclear weapons; or
    • manufacture components for nuclear-exclusive delivery platforms.    

    All companies deriving 5% or more aggregate gross revenue from:

    Production

    • Companies that produce tobacco products; or
    • Companies that sell private-label tobacco products manufactured by a third party; or
    • Companies that applied for or hold license to manufacture tobacco products, including e-cigarettes, but have not yet started production are excluded from this screen.

    Distribution

    • Companies involved in the wholesale of tobacco products to retailers and other distributors. Tobacco products include nicotine-containing products, including traditional and alternative tobacco smoking products.

    Retail

    • Companies that sell tobacco products to consumers. Tobacco products include nicotine-containing products, including traditional and alternative tobacco smoking products.

    Licensing

    • Companies that license brand names to tobacco products. Tobacco products include nicotine-containing products, including traditional and alternative tobacco smoking products.

    Supply

    • Companies that produce and supply essential products for the production of tobacco products. tobacco products include nicotine-containing products, including traditional and alternative tobacco smoking products.
    All companies classified within the “Soft Drinks” sub-industry as per the Global Industry Classification Standard (GICS®) (the global industry classification standard jointly developed by MSCI Inc. and S&P Global).       
    All companies with a “Opportunities in Nutrition and Health score” greater than 2 (i.e. 3rd and 4th quartile). Companies that are classified within the “Household & Personal products” Industry group are exempted from exclusion due to this screening.       

    The effectiveness of an exclusionary screen is limited by the accuracy, completeness and accessibility of information and disclosure the relevant entity makes available or is willing to make available. There may be instances where the above screens may not exclude a company if data about the company is incomplete, inaccurate or unavailable.

    You may have differing views, opinions and understanding of the meaning of the terminology used in this section and PDS, to VanEck or MSCI or their third party providers (including ESG research providers), and therefore your expectations of permitted investments may be different to the actual investments of the Fund.

    Lending/financing activities are not considered to be an industry tie by MSCI as part the index methodology.  

    The remaining securities are then weighted by their Free Float Market Capitalisation subject to a 5% weighting cap.
    1. MSCI ESG Research data is then used to determine which of the remaining securities are to be included in the Reference Index representing 15% of the Free Float Market Capitalisation in each GICS® sector from step 1. Only companies with ESG rating ‘A’, ‘AA’ and ‘AAA’ are included (based on MSCI’s scale from ‘AAA’ to ‘CCC’). Companies are required to have maintained the rating for 6 quarterly rebalances before becoming eligible for inclusion.
    2. Only companies with ESG controversy scores of 4 or above are eligible for inclusion (based on MSCI’s scale of 0 to 10). Companies are required to have maintained the score for 4 quarterly rebalances before becoming eligible for inclusion.
    3. Only companies with human controversy scores of 5 or above are eligible for inclusion (based on MSCI’s scale of 0 to 10). Companies are required to have maintained the score for 4 quarterly rebalances before becoming eligible for inclusion.
    4. Applying the carbon emitter screen
      The remaining companies from step 2 are then ranked by carbon emission intensity and the top 25% by number are excluded from the Index. The cumulative weight of securities excluded from any GICS sector is capped at 30% of the weight of the sectors from step 2. Securities are also excluded until the cumulative potential carbon emissions of the excluded companies reaches 50% of the sum of the potential carbon emissions of the constituents remaining from step 2.
    5. Component weighting and capping
      The remaining securities are then weighted by their Free Float Market Capitalisation subject to a 5% weighting cap.

    Index provider

    MSCI Inc. MSCI is not a related entity of VanEck Investments Limited.

    ESGI is indexed to a MSCI index. ESGI is not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to ESGI or the MSCI Index. The PDS contains a more detailed description of the limited relationship MSCI has with VanEck and ESGI.

    For full details of the methodology, click here.

    An investment in our international sustainable ETF carries risks associated with: ASX trading time differences, financial markets generally, individual company management, industry sectors, foreign currency, country or sector concentration, political, regulatory and tax risks, fund operations and tracking an index. See the VanEck MSCI International Sustainable Equity ETF PDS and TMD for more details.

    There is no universal ESG criteria nor definition to assess companies, ETFs or other funds and currently, Australia does not have an ESG or sustainability-related investment taxonomy. This means the approach used to determine ESG ratings varies significantly across research bodies, index companies and investment managers, ranging from superficial applications of ESG metrics to more comprehensive approaches. There is the risk that an investor’s views and opinions on sustainability or ESG might differ to that of the index methodology which the Fund aims to track or that of VanEck. It is important that an investor considers the PDS, target market determination and supporting disclosures to determine of the Fund aligns with their values and is right for them.  

    Performance

    Holdings & allocations

    Dividends

    Election of Dividend Reinvestment Plan (DRP)

    You can elect DRP by logging into Link’s Investor Centre (https://investorcentre.linkmarketservices.com.au/Login). Once you are logged in, please proceed to the “Payments and Tax” tab and select “Reinvestment Update”.

    Documents & insights

    ESGIAU /blog/sustainability/