State Street Global Advisors Launches First Low Carbon ETF

SPDR MSCI ACWI Low Carbon Target ETF Aims to Offer Exposure to Stocks with Lower Carbon Emissions and Fossil Fuel Reserves

Thursday, December 11, 2014 8:30 am EST



Public Company Information:

"The MSCI ACWI Low Carbon Target Index combines MSCI’s quality index construction with our in-house environmental, social and governance (ESG) team’s unique data on carbon emissions and reserves."

BOSTON--(BUSINESS WIRE)--State Street Global Advisors (SSGA), the asset management arm of State Street Corporation (NYSE:STT), today announced the SPDR MSCI ACWI Low Carbon Target ETF (Symbol: LOWC) began trading on the NYSE Arca on November 26, 2014. Developed in conjunction with the United Nations Joint Staff Pension Fund (UNJSPF), LOWC is a new vehicle that seeks to provide access to the potentially long-term growth opportunities of companies that are carbon efficient while reducing exposure to assets vulnerable to the transition to a low carbon economy.

“In combining the advantages of low carbon investment exposure with the benefits of the ETF structure, LOWC offers a powerful value proposition for investors seeking to reduce their carbon risk exposure while maintaining the benefits of broad global diversification,” said Christopher McKnett, head of ESG Investments at State Street Global Advisors.

“The launch of LOWC is an exciting advance that improves access to the benefits of low carbon investing for all investors,” said James Ross, executive vice president and global head of SPDR Exchange Traded Funds. “We are proud to support the Secretary General and the United Nations Joint Staff Pension Fund in expanding the reach of low carbon initiatives.”

The SPDR MSCI ACWI Low Carbon Target ETF seeks to provide investment results that correspond generally to the total return performance of the MSCI ACWI Low Carbon Target Index, which is designed to address two dimensions of carbon exposure – carbon emissions and fossil fuel reserves expressed as potential emissions. The Index, which is a subset of the MSCI ACWI Index, overweights companies with low carbon emissions relative to sales and those with low fossil fuel reserves relative to market capitalization and seeks to achieve a target level of tracking relative to its parent index (the MSCI ACWI Index) while minimizing the carbon exposure. The SPDR MSCI ACWI Low Carbon Target ETF’s gross expense ratio is 0.30 percent1. SSgA has contractually agreed to waive its advisory fee and reimburse certain expenses until January 31, 2017, making the net expense ratio 0.20 percent2.

“We support the UNJSPF’s low carbon initiatives and are pleased that SSGA has selected the MSCI ACWI Low Carbon Target Index as a benchmark for their Low Carbon ETF,” said Remy Briand, Managing Director and Head of Equity Research at MSCI. “The MSCI ACWI Low Carbon Target Index combines MSCI’s quality index construction with our in-house environmental, social and governance (ESG) team’s unique data on carbon emissions and reserves.”

“At the UN Secretary-General’s Climate Summit on 23 September, world leaders in government, business, finance and civil society were called upon to initiate transformative action to reduce emissions and build resilience to the adverse impacts of climate change. The United Nations Joint Staff Pension Fund welcomes the creation of a new lower carbon index and related ETFs as a responsible approach to environmentally sustainable investing and a positive response to the Secretary-General’s call for action,” said Carol Boykin, CFA, Representative of the Secretary-General for the investment of the assets of the United Nations Joint Staff Pension Fund.

ESG investment strategies are one of the fastest growing segments of the asset management industry amid strong demand from institutional investors. According to a recent report from US SIF – the Forum for Sustainable and Responsible Investment, total US-domiciled assets under management in sustainable, responsible and impact investment strategies has grown 76 percent from $3.74 trillion in 2012 to $6.57 trillion at the start of 2014, with environmental factors incorporated in nearly $3 trillion of assets under management3.

About SPDR Exchange Traded Funds

SPDR ETFs are a comprehensive family spanning an array of international and domestic asset classes. SPDR ETFs are managed by SSgA Funds Management, Inc., a registered investment adviser and wholly owned subsidiary of State Street Bank and Trust Company. The funds provide investors with the flexibility to select investments that are precisely aligned to their investment strategy. Recognized as an industry pioneer, State Street created the first US listed ETF in 1993 (SPDR S&P 500® – Ticker SPY) and has remained on the forefront of responsible innovation, as evidenced by the introduction of many ground-breaking products, including first-to-market launches with gold, international real estate, international fixed income, and sector ETFs. For more information, visit

About State Street Global Advisors

State Street Global Advisors (SSgA) is a global leader in asset management. The firm is relied on by sophisticated investors worldwide for its disciplined investment process, powerful global investment platform and access to every major asset class, capitalization range and style. SSgA is the asset management business of State Street Corporation, one of the world’s leading providers of financial services to institutional investors.

1 The gross expense ratio is the fund’s total annual operating expenses ratio. It is gross of any fee waivers or expense reimbursements. It can be found in the fund’s most recent prospectus.

2 The Adviser has contractually agreed to waive its advisory fee and reimburse certain expenses, until January 31, 2017, so that the Net annual Fund operating expenses of the Fund will be limited to 0.20% of the Fund's average daily net assets before application of any fees and expenses not paid by the Adviser under the Investment Advisory Agreement. Such fees and expenses paid by the Adviser are limited to certain direct operating expenses of the Fund and, therefore, do not include the Fund's acquired fund fees and expenses, if any. The contractual fee waiver does not provide for the recoupment by the Adviser of any fees the Adviser previously waived. The Adviser may continue the waiver from year to year, but there is no guarantee that the Adviser will do so and after January 31, 2017, the waiver may be cancelled or modified at any time.

3 Source: US SIF Foundation Report on Sustainable, Responsible and Impact Investing Trends 2014

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