Varma establishes ETF investing in US

Written by Adam Cadle

10/12/2019

Finnish pensions insurer, Varma, has established an ETF that invests in the US and takes sustainability criteria broadly into account.

The ETF was created jointly with the asset management company Legal & General Investment Management (LGIM) and the index investment company Foxberry.

Varma has invested €500m in the ETF, which will be listed on the London Stock Exchange on 10 December.

“Sustainability is integrated into Varma’s investment operations, and we also want to actively develop sustainable investment options. As the responsible investment sector grows, the development of index funds with an increasingly responsible tilt is key, and they are precisely where change is needed,” says Timo Sallinen, SVP, Investments.

Varma’s USA ETF allocates to US equities and takes sustainability criteria broadly into account. Companies that are selected as investees are assessed based on how well they take environmental, social and governance issues into account in their operations.

Tobacco companies, industries that manufacture controversial weapons and companies whose operations are based to a large extent on the use of coal and which have the highest emissions and significant fossil fuel reserves are excluded from the index.

The index also does not include companies that have breached international agreements and standards, concerning for instance respect for human rights and the use of child labour.

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