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Lyxor’s Singapore-listed China ETF switches to MSCI ESG benchmark

By Hui Ching-hoo   
October 18, 2021

France’s Lyxor Asset Management has changed the underlying benchmark of its 15-year-old Singapore-listed China-focused exchange-traded fund to an environmental, social and governance benchmark compiled by MSCI Inc to cater to rising investor demand for sustainable investing.

The Lyxor China Enterprise (HSCEI) UCITS ETF was previously benchmarked against the Hang Seng China Enterprise Net Total Return Index provided by Hong Kong’s Hang Seng Indexes Company.

The new benchmark is the MSCI China Select ESG Rating Trend Leaders Net Total Return Index, and the fund has been renamed Lyxor MSCI China ESG Leaders Extra (DR) UCITS ETF, the asset manager says in a statement on October 14.

According to Lyxor, it is the first ESG ETF based on the MSCI index listed on the Singapore Exchange. Listed in 2006, the ETF had US$324 million of assets under management as of October 7.

“The index switch meets the ever increasing interest coming from Asian investors in ESG exposures on the China equity market,” Lyxor Asia Pacific ETF Head Christopher Friese says in the statement. “We’re committed to provide Asian investors with ESG investment solutions listed locally.”

Lyxor says the MSCI benchmark targets coverage of 50% of the underlying MSCI China Index, which tracks 740 mid- and large-cap Chinese companies listed locally and overseas.

The company also says that with the shift to the new index, the ETF qualifies as an excluded investment product (EIP) in Singapore, making it more accessible to retail investors. EIPs are funds that invest only in simple products that have a less complex structure.

Paris-based Lyxor had 191.6 billion euros ($222.23 billion) of assets as of August 2021.