UBS Asset Management has launched the “UBS (Lux) Fund Solutions – Global Green Bond ESG 1 – 10 UCITS ETF” – an ETF that invests in bonds in the “Bloomberg MSCI Global Green Bond 1 – 10 Year Sustainability Select Index”.

These bonds are in up to 30 currencies, and have a remaining tenor of between one and ten years.

The bonds in the index (and so in the ETF) must meet the International Capital Markets Association (ICMA)’s Green Bond Principles. This requires, among other things, that the bonds’ use of proceeds are for alternative energy, pollution reduction, green buildings or other permitted green uses.

Bonds in the ETF are weighted by their market value in the index, but with a cap of 3% for any one bond issuer.

The ETF is listed on the SIX Swiss Exchange, Borsa Italiana and the Deutsche Borse Xetra.

This ETF, and others of its kind, add to Green Bond demand – and should be considered by issuers and investors when setting their capital markets strategy.