Ubs Group Ag · SIX:UBSG
Ubs — UBS Asset Management — ESG Presentation (March 2023)
31 slides from Ubs's sustainability presentation, March 2023
Slide 1: MSCI Switzerland IMI Dividend ESG
For marketing purposes For qualified investors / professional clients MSCI Switzerland IMI Dividend ESG First ETF to enhance Swiss Dividend with ESG UBS Asset Management UBS Exchange Traded Funds March 2023
Slide 2: Table of contents
Table of contents Section 1 Introduction 2 Section 2 Index Methodology 5 Section 3 Index Results 7 Section 4 Fund characteristics 10 Section 5 Appendix 16 Section 6 Disclaimers 18
Slide 3: Introduction
Section 1 Introduction
Slide 4: Overarching ESG framework
Overarching ESG framework Sustainable Investing Environmental Social Governance Recognize companies that focus Recognize companies that support Recognize companies with strong on offering products or services development of human capital, corporate governance that contribute to environmentally imple
Slide 5: UBS ETFs Sustainable Offering
UBS ETFs Sustainable Offering 36bn USD AuM in sustainable ETFs 12 years Experience in sustainable ETFs Our sustainable value proposition: • Currency hedged share classes to major currencies • Physically-replicating ETFs • No securities lending • Stewardship: Proxy voting & engagement EMU Source: UBS
Slide 6: Index Methodology
Section 2 Index Methodology
Slide 7: MSCI Switzerland IMI High Dividend Yield ESG LCS methodology overview
MSCI Switzerland IMI High Dividend Yield ESG LCS* Methodology overview Switzerland High Dividend Values-based Climate-related Optimization Switzerland IMI IMI Index Screens exclusions exclusions Process HDY ESG LCS* Dividend Controversial Thermal Coal Security selection & Resulting portfolio
Slide 8: High dividend screens
High dividend screens Selecting persistent and high-quality dividends Sustainability screening: The dividend payout ratio may indicate whether future dividend payments might be in jeopardy. Exclude securities with: - Zero or negative payout ratios -> do not pay dividends or have negative earnings wh
Slide 9: Business activity exclusions
Business activity exclusions Exclusions summary Revenue Threshold Controversial weapons 0% Nuclear weapons 0% Conventional weapons 5% Civilian firearms 5% Tobacco 5% Thermal Coal 5% Fossil Fuel extraction 5% MSCI ESG Controversies Score Minimum 1 MSCI ESG Rating Minimum ‘B’ Source: UBS Asset Managem
Slide 10: Optimization process
Optimization process Optimization constraints relative to the parent index Gross Dividend Yield increase by at least 30% ESG score increase by at least 10% max. 20% one-way turnover If optimizer doesn’t find a feasible solution, then -Relax (increase) turnover constraint in step of 4% from 20% till
Slide 11: Index Results
Section 3 Index Results
Slide 12: Performance analysis
Performance analysis Performance vs. MSCI Switzerland IMI Index Long run performance comparison 170 160 150 140 130 120 110 100 90 80 Mär 18 Mär 19 Mär 20 Mär 21 Mär 22 Mär 23 MSCI Switzerland IMI MSCI Switzerland IMI High Dividend Yield ESG LCS MSCI Switzerland IMI MSCI Switzerland IMI HDY ESG LCS
Slide 13: Dividend yield
Dividend yield Dividend characteristics vs. MSCI Switzerland IMI Index MSCI CH IMI MSCI CH IMI Dividend ESG Dividend Yield 2.96 4.02 Price to Earnings ratio 18.88 15.86 Forward Price to Earnings ratio 16.21 14.02 Price to Book Value ratio 3.04 2.84 Source: UBS Asset Management, MSCI. Data as of 28 F
Slide 14: ESG metrics
ESG metrics ESG characteristics vs. MSCI Switzerland IMI Index MSCI CH IMI MSCI CH IMI Dividend ESG ESG score 7.8 8.6 Environmental Pillar Score 6.1 6.4 Social Pillar Score 5.1 5.9 Governance Pillar Score 6.4 6.9 Wtd. Avg Carbon Intensity (t CO2e/$M Sales) 119 86 Potential Carbon Emissions (t CO2e/$
Slide 15: Portfolio composition
Portfolio composition Sector breakdown vs. MSCI Switzerland IMI Index Sector breakdown 35% 30% 25% 20% 15% 10% 5% 0% MSCI CH IMI MSCI CH IMI HDY ESG LCS Source: UBS Asset Management, MSCI. Data as of 30 March 2023. 14
Slide 16: Index composition
Index composition Constituents per 30 March 2023 No. ISIN Local Currency Security Name Market cap Weight 1 CH0126881561 CHF SWISS RE 1’045’171.44 16.30% 2 CH0012005267 CHF NOVARTIS 952’225.76 14.85% 3 CH0038863350 CHF NESTLE 936’658.70 14.61% 4 CH0025238863 CHF KUEHNE & NAGEL INTL 620’302.20 9.68% 5
Slide 17: Fund characteristics
Section 4 Fund characteristics
Slide 18: ETF Details
ETF Details ETF Name UBS ETF (CH) - MSCI Switzerland IMI Dividend ESG ETF Share class (CHF) A-Dis ISIN CH1244681594 ETF Bloomberg Ticker CHDIV SW TER 0.20% Index MSCI Switzerland IMI High Dividend Yield ESG Low Carbon Select Net Total Return CHF Index Index Bloomberg Ticker NF752585 Index Currency C
Slide 19: ESG Characteristics and Investment Strategy (1/2)
ESG Characteristics and Investment Strategy (1/2) SFDR Article 8 classification The products described herein align to Article 8 of Regulation (EU) 2019/2088. The following characteristics are promoted by the financial product: 1) tracks/tracking of a benchmark with a sustainability profile (ESG Sco
Slide 20: ESG Characteristics and Investment Strategy (2/2)
ESG Characteristics and Investment Strategy (2/2) UBS ETF tracks the MSCI Switzerland IMI HDY ESG Low Carbon Select Index Index The MSCI Switzerland IMI High Dividend Yield ESG Low Carbon Select Index (herein, ‘the Index’) is designed to represent the Description performance of a strategy that seeks
Slide 21: ETF Opportunities and risks
ETF Opportunities and risks Opportunities Risks The investment objective is to replicate the price and return This UBS Exchange Traded Fund invests in equities and may therefore be performance of the sub-fund’s index net of fees. subject to high fluctuations in value. The fund generally invest
Slide 22: Appendix
Section 5 Appendix
Slide 23: Risk & Return metrics
Risk & Return metrics Return p.a. Volatility p.a. Downside Vol p.a. MSCI MSCI MSCI MSCI MSCI MSCI Switzerland IMI Diff vs Switzerland IMI Diff vs Switzerland IMI Diff vs Switzerland Switzerland Switzerland High Dividend parent High Dividend parent High Dividend parent IMI IMI IMI Yield ESG LCS Yield
Slide 24: Risk & Return metrics
Risk & Return metrics Tracking (Assume Rf=0) Risk/Return metrics (Rf=0) Correlation Tracking error Information Ratio Sharpe Ratio Sortino Ratio MSCI Switzerland MSCI Switzerland Sharpe Ratio MSCI Switzerland MSCI Sortino Ratio MSCI IMI High Dividend IMI High Dividend MSCI IMI High Dividend Switzerla
Slide 25: Business Exclusion Criteria (1/2)
Business Exclusion Criteria (1/2) Values-Based Exclusions • Controversial weapons: All companies with any tie to controversial weapons (cluster munitions, landmines, depleted uranium weapons, biological/chemical weapons, blinding lasers, non-detectable fragments and incendiary weapons), as defined b
Slide 26: Business Exclusion Criteria (2/2)
Business Exclusion Criteria (2/2) Climate-related Exclusions Fossil Fuel Extraction: • All companies deriving more than 5% revenue (either reported or estimated) from the mining of thermal coal (including lignite, bituminous, anthracite and steam coal) and its sale to external parties. It excludes r
Slide 27: Contact information
Contact information Raimund Müller, CIIA Giovanna Cilia Emily Massmann Cédric Jeanbourquin Head ETF & Index Fund Sales ETF & Index Fund Sales ETF & Index Fund Sales ETF & Index Fund Sales Switzerland & Liechtenstein Switzerland & Liechtenstein Switzerland & Liechtenstein Switzerland & Liechtenstein
Slide 28: Disclaimers
Section 6 Disclaimers
Slide 29: Risk information
Risk information UBS ETFs investing in equities UBS ETFs investing in Fixed Income UBS Exchange Traded Funds invest in equities and may therefore be subject to high fluctuations in This UBS Exchange Traded Fund invests in government bonds of a single country and may therefore value. For this reason,
Slide 30: Disclaimer
Disclaimer For marketing and information purposes by UBS. For qualified investors only. UBS funds under Swiss law. Arrangements for marketing fund units mentioned in this document may be terminated at the initiative of the management company of the fund(s). The product described herein aligns to Art
Slide 31: Disclaimer
Disclaimer This document is for Professional Clients only. It is not to be distributed to or relied upon by Retail Clients under any circumstances. The document has not been prepared in line with the FCA requirements designed to promote the independence of investment research and is not subject to a