Franklin Templeton launches new MSCI World Catholic Principles ETF for European investors

Article 8 compliant ETF provides access to highly rated ESG companies with lower exposure to carbon emissions relative to the broader MSCI World Index and in alignment with Catholic principles

Franklin Templeton announces the launch of its new Franklin MSCI World Catholic Principles UCITS ETF. This Article 8 compliant offering brings the total number of Article 8³ compliant ETFs to 12 in the Franklin Templeton ETF range, which has over half of its funds classified as Article 8 or 9 compliant.

The investment objective of this new global equity index-tracking ETF is to provide exposure to large and mid-cap stocks of companies considered environmentally and socially responsible in developed market countries. The ETF tracks the performance of the MSCI World Select Catholic Principles ESG Universal and Low Carbon Index.

Focusing on companies with lower carbon exposure and higher Environmental, Social and Governance (ESG) ratings, index holdings must have a minimum of a ‘BB’ ESG Rating from MSCI ESG Ratings. The index excludes companies involved in controversial businesses, such as civilian firearms, nuclear weapons, and controversial and conventional weapons. Investment in businesses involved in gambling, tobacco, and thermal coal is significantly restricted and based on revenue generated from these activities. The index also has three additional exclusions, which consist of abortion and contraceptives, animal testing and stem cells research to align with Catholic values. This results in a current overall MSCI ESG Rating of AA, highlighting the strength of the ETF’s sustainability profile. Over 65% of stocks in the portfolio are currently achieving an MSCI ESG Rating of between A to AAA.

Caroline Baron, Head of ETF Distribution, EMEA, Franklin Templeton added: “Following the launch of the Franklin Catholic Principles Emerging Markets Sovereign Debt UCITS ETF two years ago and further to client interests, we are delighted to expand our offering of values-based products and introduce this new MSCI World Catholic Principles UCITS ETF to European investors. With this new fund we wanted to offer investors an ESG-focused global equity strategy within an ETF structure that incorporates specific Catholic values but also provides a core equity article 8 compliant solution.”

The Franklin MSCI World Catholic Principles UCITS ETF will list on the Deutsche Börse Xetra (XETRA) on 25 April, London Stock Exchange (LSE) on 26 April and Borsa Italiana on 9 May. The ETF is registered in Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Spain, Sweden and the United Kingdom.

Competitive fees

The ETF will provide European investors with cost-efficient, UCITS-compliant, developed market equity exposure aligned with Catholic principles and offers one of the lowest total expense ratios (TER) at 0.27% in Europe for its respective category.

Rafaelle Lennox, Head of UCITS ETF Product Strategy, Franklin Templeton added: “We are pleased to bring this tailor-made solution to investors. The MSCI World Select Catholic Principles ESG Universal and Low Carbon Index was created from a partnership between Franklin Templeton, MSCI and ethical advisor Nummus.Info to offer investors real customisation backed by the scale and resources of our firm. Investors can now participate in the performance of sustainable developed world equities that align with Catholic principles in one simple ETF.”

This ETF will be managed by Dina Ting, Head of Global Index Portfolio Management, and Lorenzo Crosato, ETF Portfolio Manager, Franklin Templeton, who have more than three decades of combined experience in the asset management industry and extensive track records in managing ETF strategies.

Franklin Templeton’s global ETF platform enables investors to pursue their desired outcomes through a range of active, factor-based and passive ETFs. Supported by the strength and resources of one of the world’s largest asset managers, the global ETF platform has over $26 billion in assets under management globally as of 31 March 2024.