REG - HSBC ETFs PLC - Shareholder Notice
25/02/2025 09:15
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RNS Number : 2470Y HSBC ETFs PLC 25 February 2025
This notice contains important information about your investment in one or
more of the funds listed in Appendix 1 (the "Funds") of the Company.
Capitalised terms used in this notice and not defined shall having the meaning
given to those terms in the Prospectus.
25 February 2025
Dear shareholder,
As a shareholder in one or more of the Funds, we are writing to inform you of
some forthcoming changes impacting them.
What are the changes?
The changes we are making are explained in sections 1 - 4 below. In each
section we explain which Funds are affected by the changes. Some Funds may
be subject to more than one change.
1. Introduction of new fund naming guidelines
The European Securities and Markets Authority (ESMA) has issued new guidelines
that apply to funds whose names contain environmental-related terms (e.g. ESG)
or sustainability-related terms (e.g. Sustainable) (the "ESMA Guidelines").
The ESMA Guidelines are intended to enhance investor protection where funds
have names that suggest they meet certain sustainability standards. They will
apply to the Funds with effect from 21 May 2025.
The ESMA Guidelines require that for a fund to use an environmental-related
term in its name, the relevant fund must:
(i) invest at least 80% of its assets to meet the
environmental and social characteristics promoted by the fund; and
(ii) apply the exclusions set out in Article 12(1)(a) to
(g) of the Commission Delegated Regulation (EU) 2020/1818. These are the
minimum standards that apply to EU Paris-Aligned Benchmarks (the "PAB
Exclusions"). See Appendix 2 for more details on the PAB Exclusions.
Furthermore, for a fund to use a sustainability related term it must, in
addition to meeting the requirements at (i) and (ii) above, also:
(iii) commit to investing meaningfully (i.e it must invest
at least 50% of its assets) in sustainable investments referred to in Article
2(17) of the SFDR ("Sustainable Finance Disclosure Regulation").
The introduction of the ESMA Guidelines means that we are required to make
changes to the names of the Funds. The changes to be made will vary
depending on whether a Fund currently uses an environmental-related term (i.e.
ESG) or a sustainability-related term (i.e. sustainable).
Changes to Funds currently using 'ESG' in their name
The Funds listed in Table A below currently use the term 'ESG' in their
name. Since the ESMA Guidelines consider 'ESG' to be an
environmental-related term, the Funds will need to meet the requirements set
out at both (i) and (ii) above to continue using 'ESG' in their names. As
the objective of each of the Funds in Table A is to track an index which does
not incorporate PAB Exclusions, the Funds in Table A will be unable to comply
with the ESMA Guidelines. We will therefore be renaming the Funds, as set out
below, to replace 'ESG' with 'Screened'. 'Screened' has been selected as a
term in the New Fund Name to denote that the securities are subject to
specific ESG related and/or other screens including, but not limited to,
applying certain exclusionary criteria as defined in the index methodology.
Table A
Current Fund Name New Fund Name
HSBC MSCI EMERGING MARKETS ISLAMIC ESG UCITS ETF HSBC MSCI EMERGING MARKETS ISLAMIC SCREENED CAPPED UCITS ETF*
HSBC MSCI EMERGING MARKETS SMALL CAP ESG UCITS ETF HSBC MSCI EMERGING MARKETS SMALL CAP SCREENED UCITS ETF
HSBC MSCI EMERGING MARKETS VALUE ESG UCITS ETF HSBC MSCI EMERGING MARKETS VALUE SCREENED UCITS ETF
HSBC MSCI EUROPE ISLAMIC ESG UCITS ETF HSBC MSCI EUROPE ISLAMIC SCREENED UCITS ETF
HSBC MSCI JAPAN ISLAMIC ESG UCITS ETF HSBC MSCI JAPAN ISLAMIC SCREENED UCITS ETF
HSBC MSCI USA ISLAMIC ESG UCITS ETF HSBC MSCI USA ISLAMIC SCREENED UCITS ETF
HSBC MSCI WORLD ISLAMIC ESG UCITS ETF HSBC MSCI WORLD ISLAMIC SCREENED UCITS ETF
HSBC MSCI WORLD SMALL CAP ESG UCITS ETF HSBC MSCI WORLD SMALL CAP SCREENED UCITS ETF
HSBC MSCI WORLD VALUE ESG UCITS ETF HSBC MSCI WORLD VALUE SCREENED UCITS ETF
* The new fund name will also include the term 'Capped' in its name to align
with the investment objective of the Fund to replicate the performance of a
capped index. The intention to update the Fund name to reflect this was
notified to shareholders on 4 November 2024.
Changes to Funds currently using 'Sustainable' in their name
The Funds listed in Table B below currently use the term 'Sustainable' in
their name. Since the ESMA Guidelines consider 'Sustainable' to be a
sustainability-related term, the Funds will need to meet the requirements set
out at (i), (ii) and (iii) above. As the objective of each of the Funds in
Table B is to track an index that does not incorporate PAB Exclusions, they
are unable to comply with (ii). Furthermore, these Funds do not, and are not
intending to, commit to invest meaningfully in sustainable investments so they
are also unable to meet the requirements set out in (iii) above. Therefore, to
comply with the ESMA Guidelines, we will be renaming these Funds as set out
below to replace 'Sustainable' with 'Screened'. Once again, 'Screened' has
been selected as a term in the New Fund Name to denote that the securities are
subject to specific ESG related and/or other screens including, but not
limited to, applying certain exclusionary criteria as defined in the index
methodology.
Table B
Current Fund Name New Fund Name
HSBC ASIA PACIFIC EX JAPAN SUSTAINABLE EQUITY UCITS ETF HSBC ASIA PACIFIC EX JAPAN SCREENED EQUITY UCITS ETF
HSBC DEVELOPED WORLD SUSTAINABLE EQUITY UCITS ETF HSBC DEVELOPED WORLD SCREENED EQUITY UCITS ETF
HSBC EMERGING MARKET SUSTAINABLE EQUITY UCITS ETF HSBC EMERGING MARKET SCREENED EQUITY UCITS ETF
HSBC EUROPE EX UK SUSTAINABLE EQUITY UCITS ETF HSBC EUROPE EX UK SCREENED EQUITY UCITS ETF
HSBC EUROPE SUSTAINABLE EQUITY UCITS ETF HSBC EUROPE SCREENED EQUITY UCITS ETF
HSBC JAPAN SUSTAINABLE EQUITY UCITS ETF HSBC JAPAN SCREENED EQUITY UCITS ETF
HSBC UK SUSTAINABLE EQUITY UCITS ETF HSBC UK SCREENED EQUITY UCITS ETF
HSBC USA SUSTAINABLE EQUITY UCITS ETF HSBC USA SCREENED EQUITY UCITS ETF
The Fund listed in Table C below also uses the term 'Sustainable' in its
name. However, while this Fund and its index meets the requirements set out
in (i) and (ii) above, the Fund does not, and is not intending to, commit to
invest meaningfully in sustainable investments and so it is unable to meet the
requirements set out in (iii) above. Therefore, to comply with the ESMA
Guidelines we will be renaming the Fund in Table C as set out below.
Table C
Current Fund Name New Fund Name
HSBC BLOOMBERG GLOBAL SUSTAINABLE AGGREGATE 1-3 YEAR BOND UCITS ETF HSBC BLOOMBERG GLOBAL ESG AGGREGATE 1-3 YEAR BOND UCITS ETF
2. Changes to Index Names
MSCI is the index provider in relation to the Funds referred to in Table D
below. Following consultation, MSCI has changed the name of the indices as
shown in the table. The Index name changes took effect on 3 February 2025.
Table D
Index Relevant Fund using Index (Current Fund Name)
Old Name New Name
MSCI EM (Emerging Market) Islamic ESG Universal Screened Select Capped Index MSCI EM (Emerging Market) Islamic Universal Screened Select Capped Index HSBC MSCI EMERGING MARKETS ISLAMIC ESG UCITS ETF
MSCI Europe Islamic ESG Universal Screened Select Index MSCI Europe Islamic Universal Screened Select Index HSBC MSCI EUROPE ISLAMIC ESG UCITS ETF
MSCI Japan Islamic ESG Universal Screened Select Index MSCI Japan Islamic Universal Screened Select Index HSBC MSCI JAPAN ISLAMIC ESG UCITS ETF
MSCI USA Islamic ESG Universal Screened Select Index MSCI USA Islamic Universal Screened Select Index HSBC MSCI USA ISLAMIC ESG UCITS ETF
MSCI World Islamic ESG Universal Screened Select Index MSCI World Islamic Universal Screened Select Index HSBC MSCI WORLD ISLAMIC ESG UCITS ETF
MSCI Emerging Markets Small Cap SRI ESG Universal Select Index MSCI Emerging Markets Small Cap Universal Screens Index HSBC MSCI EMERGING MARKETS SMALL CAP ESG UCITS ETF
MSCI Emerging Markets Value SRI ESG Target Select Index MSCI Emerging Markets Value Select Screens Advanced Index HSBC MSCI EMERGING MARKETS VALUE ESG UCITS ETF
MSCI World Value SRI ESG Target Select Index MSCI World Value Select Screens Advanced Index HSBC MSCI WORLD VALUE ESG UCITS ETF
MSCI World Small Cap SRI ESG Leaders Select Index MSCI World Small Cap Selection Screens Index HSBC MSCI WORLD SMALL CAP ESG UCITS ETF
3. Index methodology changes
Following the introduction of the ESMA Guidelines some index providers made
the decision to change their index methodologies to incorporate PAB Exclusions
meaning that their indices comply with the ESMA Guidelines. This has enabled
the Funds set out in Table E below to either retain or move to the new fund
names as detailed above.
We will be updating the "Index Description" section of each relevant
Supplement to reflect these additional exclusions which have not resulted in
any material change to these Funds.
Table E
Current Fund Name New Fund Name Index Index Provider Effective Date
HSBC BLOOMBERG GLOBAL SUSTAINABLE AGGREGATE 1-3 YEAR BOND UCITS ETF HSBC BLOOMBERG GLOBAL ESG AGGREGATE 1-3 YEAR BOND UCITS ETF Bloomberg MSCI Global Aggregate 1-3 Year SRI Carbon ESG-Weighted Index Bloomberg LP [February 2025]
HSBC NASDAQ Global Climate Tech UCITS ETF No change NASDAQ CTA Global Climate Technology Index NASDAQ [December 2024]
4. SFDR pre-contractual disclosure annexes - minimum commitment changes
and other enhancements
We are also making changes to the minimum commitments set out in the SFDR
pre-contractual disclosure annexes (the "SFDR Annexes"). This will affect
the Funds listed in Table F and Table G below.
a) Investments that promote environmental and/or
social characteristics ("E/S Characteristics")
As Article 8 funds under SFDR, the Funds listed in Table F commit that a
minimum proportion of their net assets will promote E/S Characteristics. These
minimum commitments were based on estimates at the time of the Funds' approval
by the Central Bank of Ireland however, since these Fund were launched, the
actual level of investments promoting E/S Characteristics for these Funds has
been very close to the minimum commitments. We believe there should be an
appropriate space between the minimum commitment levels and the actual levels
to ensure that the minimum commitment levels can be maintained over time. For
the Funds listed Table F we are therefore, adjusting the minimum commitment to
E/S Characteristics as shown.
Table F
Fund Minimum E/S Characteristics in SFDR Annex
Current minimum Revised
minimum
HSBC FTSE EPRA NAREIT DEVELOPED CLIMATE PARIS ALIGNED UCITS ETF 98.27% 80%
HSBC MSCI Japan Islamic ESG UCITS ETF 100% 80%
HSBC NASDAQ Global Climate Tech UCITS ETF 99.7% 80%
b) Sustainable Investments of the Funds ("Sustainable
Investments")
Article 8 funds under SFDR often commit that a minimum proportion of
investments which promote E/S Characteristics will be in Sustainable
Investments, as defined in Article 2(17) of the SFDR.
The Fund listed in Table G below, currently commits to invest the minimum
proportion in Sustainable Investments as shown in the table. However, while
actual level of Sustainable Investments have been above the current minimum
since the Fund was launched, we believe it is prudent to revise the stated
minimum commitment as shown in Table G to ensure that the minimum commitment
level can be maintained.
Table G
Fund Minimum Sustainable Investments in SFDR Annex
Current Revised
minimum minimum
HSBC NASDAQ Global Climate Tech UCITS ETF 81.2% 50%
c) Other enhancements
We are updating the SFDR Annexes to make certain information clearer and more
transparent with the aim that investors will be better able to understand the
documents. As an example, we are clarifying for all the Funds that a minimum
proportion of 80% of their net assets will promote E/S Characteristics.
How do the changes impact the Sub-Funds?
The amendments do not impact the Funds' status as Article 8 funds under SFDR
and the Funds' investment strategies will be unchanged. Additionally, the
amendments will not affect the tracking error between the Funds' performance
and that of their indices.
Except for those Funds listed in Table E of section 3 above, the Index
methodology changes section, there has been no change to portfolio composition
or portfolio turnover as a result of these amendments.
What is the Effective Date of the changes?
Unless otherwise specified in this notice, the changes set out above will take
place on or around 30 April 2025 (the "Effective Date").
Will the names of other Company funds be changed to comply with the ESMA
Guidelines?
We currently have no plans to change the names of other Company funds to meet
the requirements of the ESMA guidelines.
Do I need to take any action?
You do not need to take any action, however, should you have any questions
relating to the content of this notice, you should contact your sales
representative, your professional adviser, your investment consultant, the
Administrator and/or legal adviser, as appropriate.
Additional information relating to the Funds is available by choosing your
local website at www.global.assetmanagement.hsbc.com or from the registered
office.
If you are in doubt as to the content of this notice you should take you
should seek advice from your stockbroker, bank manager, solicitor, accountant
or other independent financial adviser. If you have sold or transferred some,
or all, of your Shares in the Funds referred to above, please pass this
document at once to the purchaser or transferee or to the stockbroker, bank or
other agent through whom the sale or transfer was effected for transmission to
the purchaser or transferee as soon as possible. Where you have sold or
transferred some Shares but have a remaining shareholding you should continue
to read, and retain a copy of, this document as it is applicable to your
remaining Shares.
This notice has not been reviewed by the Central Bank of Ireland (the "Central
Bank") and it is possible that changes thereto may be necessary to meet the
Central Bank's requirements. The board of directors of the Company (the
"Directors") accepts responsibility for the information contained in this
notice. To the best of the knowledge and belief of the Directors (who have
taken all reasonable care to ensure that such is the case) the information
contained in this notice is in accordance with the facts and does not omit
anything likely to affect the import of such information.
Yours sincerely,
Director
For and on behalf of
HSBC ETFs plc
Appendix 1
Current Fund Name ISINs
HSBC ASIA PACIFIC EX JAPAN SUSTAINABLE EQUITY UCITS ETF IE00BKY58G26, IE000P1WR081,
HSBC BLOOMBERG GLOBAL SUSTAINABLE AGGREGATE 1-3 YEAR BOND UCITS ETF IE000XGNMWE1, IE0008ANIRC7, IE000VPN5RQ7
HSBC DEVELOPED WORLD SUSTAINABLE EQUITY UCITS ETF IE00BKY59K37, IE000ZGT8JM8, IE000QWXU0Z6,
HSBC EMERGING MARKET SUSTAINABLE EQUITY UCITS ETF IE00BKY59G90, IE000XYBMEH0
HSBC EUROPE EX UK SUSTAINABLE EQUITY UCITS ETF IE00BKY58625
HSBC EUROPE SUSTAINABLE EQUITY UCITS ETF IE00BKY55W78, IE000WARATZ3
HSBC FTSE EPRA NAREIT DEVELOPED CLIMATE PARIS ALIGNED UCITS ETF IE00096S6AV7, IE000SPKU8M9
HSBC JAPAN SUSTAINABLE EQUITY UCITS ETF IE00BKY55S33, IE000J3F4J90
HSBC MSCI EMERGING MARKETS ISLAMIC ESG UCITS ETF IE0009BC6K22
HSBC MSCI EMERGING MARKETS SMALL CAP ESG UCITS ETF IE000W080FK3
HSBC MSCI EMERGING MARKETS VALUE ESG UCITS ETF IE000NVVIF88
HSBC MSCI EUROPE ISLAMIC ESG UCITS ETF IE000AGFZM58
HSBC MSCI JAPAN ISLAMIC ESG UCITS ETF IE0001XCFC82
HSBC MSCI USA ISLAMIC ESG UCITS ETF IE000I5NV504
HSBC MSCI WORLD ISLAMIC ESG UCITS ETF IE000X9FTI22
HSBC MSCI WORLD SMALL CAP ESG UCITS ETF IE000C692SN6, IE0004UKWWB3
HSBC MSCI WORLD VALUE ESG UCITS ETF IE000LYBU7X5, IE000MKMOZU3
HSBC NASDAQ Global Climate Tech UCITS ETF IE000XC6EVL9
HSBC UK SUSTAINABLE EQUITY UCITS ETF IE00BKY53D40, IE00046S3PW1
HSBC USA SUSTAINABLE EQUITY UCITS ETF IE00BKY40J65, IE000YFGN231
Appendix 2
PAB Exclusions
Paris-aligned Benchmarks ("PABs") are a type of investment benchmark designed
by the European Union to align investment portfolios with the objectives of
the Paris Agreement on climate change. This global agreement aims to limit
global warming to well below 2 degrees Celsius above pre-industrial levels and
to pursue efforts to limit the temperature increase to 1.5 degrees Celsius.
Article 12(1)(a) to (g) of the Commission Delegated Regulation require PABs to
apply the exclusions listed below.
Excluded Activity Details
Controversial weapons (a) Will not invest in issuers involved in any activities related to controversial
weapons, namely anti-personnel mines, cluster munitions, chemical weapons and
biological weapons.
Tobacco (b) Will not invest in issuers involved in the cultivation and production of
tobacco.
UNGC and OECD (c) Will not invest in issuers in violation of the United Nations Global Compact
(UNGC) principles or the Organisation for Economic Cooperation and Development
(OECD) Guidelines for Multinational Enterprises.
Hard coal and lignite (d) Will not invest in issuers that derive 1% or more of revenue from exploration,
mining, extraction, distribution or refining of hard coal and lignite.
Oil fuels (e) Will not invest in issuers that derive 10% or more of their revenues from the
exploration, extraction, distribution or refining of oil fuels.
Gaseous fuels (f) Will not invest in issuers that derive 50% or more of their revenues from the
exploration, extraction, manufacturing or distribution of gaseous fuels.
Electricity generation (g) Will not invest in issuers that derive 50% or more of their revenues from
electricity generation with a GHG intensity of more than 100 g CO2 e/kWh.
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