Natixis Investment Managers' subsidiary Ossiam has launched a smart-beta ETF using machine learning techniques with a ESG focus.
The Ossiam World ESG Machine Learning UCITS ETF aims at delivering the net total return of a selection of equities in developed markets globally through a machine learning algorithm selecting equities that meet ESG criteria.
This algorithm, ranking companies based on their ESG compliance and financial potential, will improve its company selection with the time as it learns from the data.
The ETF's ESG filter will start ruling out those companies that have been subject to disputes; are involved in controversial weapons business; have significant operations in the tobacco or coal industry; do not comply with the UN Global Compact principles; or are excluded from the Norges Bank Investment Management list.
The smart-beta strategy will be available on the Deutsche Börse Xetra exchange in US dollars and euros in January 2019, and is reported to be available soon on the Italian market too.
The fund has a total expense ratio of 0.65% and is domiciled in Ireland.
Antonio Celeste,head of ESG Business Development di Ossiam, said:"A clear trend has emerged of large equity investors putting ESG at the core of their allocation decisions.
"At the same time, progress in artificial intelligence, and the increased depth and quality of data, has enabled us to improve investment processes by incorporating the valuable information embedded in large amounts of ESG data."
Bruno Poulin (pictured), CEO of Ossiam, added: "It has always been Ossiam's mission to drive the investment industry forward. This strategy and ETF mark a key turning point in combining ESG principles with advanced investment techniques as we reach a tipping point for ESG, driven by policy makers, regulators and investors."