Finland’s Varma hailed its biggest single investment yet in today’s announcement it has put €2.3bn into a climate-tilted exchange-traded fund (ETF) based on US stocks created to its own specifications by asset manager Invesco.
The Finnish mutual pension insurance company said the investment was also the largest ETF launch seen so far, with the new instrument – which follows the MSCI Global Climate 500 North America Selection index – having been listed on New York Stock Exchange yesterday.
Timo Sallinen, head of listed investments at the Helsinki-based occupational pension provider, said: “We wanted a cost-effective fund tailored to our climate goals and operating in the US market.”
The investment served the objectives of Varma’s investment strategy related to responsible investment and geographical diversification, he said.
“This is a liquid instrument and gives us flexibility when investing our assets totalling approximately €63bn,” he added.
Varma said the companies in the ETF had “a proven track record of reducing carbon dioxide emissions and environmental responsibility”.
According to index provider MSCI, the MSCI Global Climate 500 North America Selection Index picks constituents of the MSCI ACWI Select Climate 500 Index, which are also constituents of MSCI North America Index.
More than 95% of the constituents of the latter index are US stocks, while the remainder are Canadian.
Both Varma and its peer in the private-sector side of Finland’s earnings-related pension system, Ilmarinen, have worked in the last few years with a range of asset managers to create and launch sustainability-themed ETFs.
Last week, Varma invested in a tailored low-emission Japanese ETF managed by Nomura Asset Management.
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