AWDS – broad exposure to global equities, with a robust ESG strategy

Why ESG?

Investors are increasingly focused on ESG considerations, for both ethical and financial reasons.

ESG considerations are increasingly being integrated into equity portfolios, as investors seek to better manage long-term risks that are not always captured by traditional financial metrics. Factors such as exposure to the energy transition, labour practices, governance quality and supply chain resilience can materially affect company performance over time. Incorporating ESG signals into active fund management can move portfolios away from structurally weaker business models and towards companies that are better positioned to navigate change in a host of relevant areas.

For a global equity strategy like AWDS, ESG integration allows the portfolio to remain closely aligned with the MSCI World Index, while actively seeking incremental improvements in quality, resilience and long-term return potential through ESG-informed stock selection.

We think that investing in an ESG-badged fund should be more than about doing good – although it certainly can be about that – as the aim should be to enhance risk-adjusted returns by systematically favouring companies with stronger ESG profiles relative to peers.

AWDS launched in September 2024 as part of BNP Paribas Easy.

AWDS – an ESG-focused fund

AWDS is a relatively new fund, launched in September 2024. It forms part of the range of funds offered by BNP Paribas Easy, the dedicated ETF and index fund franchise of BNP Paribas Asset Management (see page 11 for information on the manager).

AWDS’s investment objective is to provide exposure to global developed market equities while taking into account ESG criteria.

The fund’s investment universe consists of the securities of the MSCI World (USD Net Total Return) Index, which tracks the performance of large- and mid-cap companies across developed markets. From this universe, the manager applies an active strategy with “a binding and significant ESG integration approach”, selecting securities that enhance AWDS’s ESG profile relative to the index. Specifically, the fund targets:

• a higher ESG score than the index after excluding at least 30% of securities based on ESG scores;
• a carbon footprint at least 50% lower than that of the index;
• a lower greenhouse gas (GHG) intensity than that of the index;
• a higher board gender diversity ratio than the index; and
• a minimum of 45% of the portfolio invested in sustainable investments, as defined under Article 2 (17) of the EU Sustainable Finance Disclosure Regulation (SFDR).

Initially, the investment universe is narrowed down by excluding companies that do not comply with the manager’s Responsible Business Conduct (RBC) policy. This includes screens such as the UN Global Compact principles and OECD Guidelines for Multinational Enterprises.

After these exclusions, the remaining investment universe is assessed against the three pillars of ESG:

• Environmental: energy efficiency, greenhouse gases emissions reduction, and treatment of waste;
• Social: respect of human rights and workers’ rights, and human resources practices such as health and safety and diversity; and
• Governance: board independence, executive remuneration, and protection of minority shareholders rights.

BNP Paribas’s proprietary scoring framework

BNP’s proprietary scoring framework plays a big part in AWDS’s process.

Part of the assessment of the securities within the investment universe relies on BNP’s proprietary scoring framework, which generates a company-level score based on material ESG issues relative to peers.

Companies are assessed through a four-step process:

• ESG metric selection and weighting, based on materiality of ESG issues to the business, measurability and insight, and data quality and availability;
• ESG assessment versus peers. Each company starts from a “neutral” score of 50 and is scored across each of the three ESG pillars. Companies score positively if they outperform the peer group average, and negatively if they underperform;
• Qualitative review, drawing on third-party data sources, in-depth internal research, and direct engagement with companies;

This leads to a final ESG score, ranging from zero to 99.

As a result of its robust approach to ESG analysis, AWDS’s portfolio weightings can differ materially from the index, and some constituents may be excluded altogether. However, the fund uses tracking-error and sector controls to limit performance divergence, meaning that returns are still likely to remain close to those of the MSCI World Index. Performance since launch supports this (see page 8).

If AWDS is able to consistently deliver on its objective, investors should be able to match, or potentially outperform the index, while benefitting from a stronger ESG profile than a comparable passive fund.

Structure

There are three versions of the fund available, each with its own ISIN, as outlined in Figure 1.

Figure 1: BNP PARIBAS EASY ESG ENHANCED WORLD UCITS ETF, available versions

The fund is available on multiple European exchanges – London (LN), Euronext Paris (FP), Switzerland (SE), Germany (GR/GY) and Italy (IM) – although not every currency version is available on each exchange. In some cases the listing is pending. Only accumulation units are available; there are no distribution units (see page 10).

Throughout this note we have used the ticker AWDS for consistency. Performance comparisons and benchmark tracking are thus always calculated using USD NAV, ensuring consistency with the fund’s global investment universe.

Liquidity & spreads

Figure 2: Average daily liquidity and bid-ask spread of share classes, 12 months to 3 March 2026

Trading is dominated by the euro line in France, with more volume than the other lines combined. Spreads vary quite widely across the exchanges, with the dollar line in London trading on a notably narrow spread.

Tracking error

AWDS’s tracking error stands out as high amongst similar active ETFs.

AWDS’s one-year tracking error to 31 March 2026 was 6.38%, measured as the standard deviation of the difference between AWDS’s returns and those of the benchmark index. This sits at the upper end of expectations for an active ETF that follows a broadly quantitative approach and a holdings profile still similar to the index (see page 7) rather than a more narrowly focused thematic fund that we tend to see at the smaller end of the market. It gives the potential for strong outperformance (and of course the opposite) over time, with a much greater degree of divergence than a passive ETF.

Fees

AWDS’s fees are highly competitive.

AWDS’s total expense ratio (TER) is 0.2%. This covers the management fee, custody and fund administration costs and audit and regulatory compliance expenses. The fee accrues daily and is reflected in the fund’s NAV. It does not include transaction costs from buying and selling underlying securities, nor investor-level costs such as bid-ask spreads or brokerage fees.

Considering the active management element, AWDS’s TER compares very favourably with passive global equity ETFs, which typically charge between 0.12% and 0.22%. This seems particularly competitive given AWDS’s relatively high tracking error, compared to other similar active ETFs.

Top 10 holdings

As shown in Figure 3, the top 10 holdings of AWDS match the benchmark.

Figure 3: Top 10 holdings as at 31 March 2026

Asset allocation

AWDS’s geographic asset allocation matches the benchmark relatively closely. Therefore, it is dominated by the United States, with the most notable difference being the underweight to the UK. The sector allocation matches the benchmark to within one decimal place (see Figure 7).

Figure 4: AWDS geographic allocation as at 31 March 2026

Figure 5: AWDS geographic allocation relative to MSCI World (%)

Figure 6: AWDS sector allocation as at 31 March 2026

Figure 7: AWDS sector allocation relative to MSCI World (%)

Performance

As is illustrated in Figure 9, AWDS has underperformed the index since its launch in September 2024. As shown in Figure 8, this is primarily due to a period of underperformance from launch until the end of April 2024, and then since the start of this year. As is also illustrated in Figure 8, AWDS’s performance between April 2024 and the end of 2025 is markedly better.

It is particularly interesting to note that when global equities were struggling at the beginning of 2025, AWDS underperformed – particularly in the period of turbulence caused by President Trump’s “Liberation Day” tariff announcements in April. As equities subsequently recovered and then rallied, so the relative performance of AWDS improved.

Figure 8: AWDS’s NAV total return relative to MSCI World index, rebased to 100, from inception to 24 April 2026

Figure 9: Cumulative total return performance over periods ending 31 March 2026

Peer group

Figure 10: Total return NAV performance, AUM, fees & tracking error for selection of large-cap global equity active ETFs, ending 31 March 2026

Given its relatively short life, AWDS has a limited performance history to analyse. Due to its struggles in this calendar year, its six-month and one-year numbers are behind the peer group. This has weighed on its relative performance versus peers since launch.

AWDS has grown rapidly into a significant player within the active ETF global equities space, despite BNP being a relatively small player within European active ETFs (with an overall share of the market of 3.7% at the end of 2025 versus 45% for the leader JPMorgan). This growth is likely driven in part by the fund’s highly competitive fees, which, at 20 bps, are the lowest of its peers in Figure 10.

AWDS has one of the highest tracking errors in the sector, indicating greater potential for returns to deviate from the benchmark, both positively and negatively, over time. Only the First Trust fund has a higher one-year tracking error, but its size and performance make it something of an outlier within the peer group.

No regular dividends – accumulating ETF

AWDS only offers accumulation share classes.

AWDS is an accumulating ETF, with any income generated by the underlying holdings reinvested into the fund rather than being distributed to investors. This reinvestment is reflected in the fund’s net asset value and supports long-term capital growth, but investors do not receive regular cash distributions.

For comparison purposes only, the yield of the benchmark MSCI World Index is approximately 1.5%.

Management

AWDS’s named manager is Alban Ribault, a portfolio manager within BNP Paribas Asset Management’s ETF & Index team. He joined the firm in 2007, and, from 2015 to 2021, was a market risk analyst focused on equities and corporate fixed income.

AWDS is managed by BNP Paribas Asset Management, part of the BNP Paribas Group. Established in its modern form in 2000, the firm has grown into a global investment manager with a presence across Europe, the Americas and Asia. It manages approximately €500bn in assets on behalf of institutional investors, intermediaries and retail clients, across both active and passive strategies. Its investment teams operate across major asset classes, including equities, fixed income and multi-asset solutions.

The organisation combines centralised investment oversight with regional portfolio management and research. Teams collaborate across geographies, sharing research and risk insights while maintaining local market expertise. Governance sits within the wider BNP Paribas group structure, with asset management operating under the group’s global risk, compliance and sustainability frameworks.

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