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 factors are now widely used in equity portfolios to help manage long-term risks that traditional financial measures may miss. Issues like the energy transition, labour practices, governance and supply chain strength can all impact company performance over time. By including ESG signals in active fund management, portfolios can shift away from weaker business models towards companies better equipped to handle change.

For global equity strategies like AWDS, ESG integration aims for higher quality, resilience and long-term returns through ESG-focused stock selection, while keeping the portfolio in line with the MSCI World Index.

We believe investing in an ESG-labelled fund is not just about doing good. The main goal is to improve risk-adjusted returns by consistently favouring companies with stronger ESG profiles compared to their peers.

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

AWDS – an ESG-focused fund

AWDS is a new fund launched in September 2024 and is part of BNP Paribas Easy, the ETF and index fund division of BNP Paribas Asset Management.

The fund aims to give investors access to global developed market shares while considering ESG factors. Its investment universe is the MSCI World (USD Net Total Return) Index, which covers large and mid-sized companies in developed markets. The manager uses an active strategy to select shares that improve AWDS’s ESG profile compared to the index.

AWDS aims for a higher ESG score by excluding at least 30% of securities based on ESG ratings. It also targets a carbon footprint at least 50% lower than the index, lower greenhouse gas intensity and better board gender diversity. At least 45% of the portfolio must be in sustainable investments, as defined by EU rules.

The investment universe is first narrowed by excluding companies that do not meet the manager’s Responsible Business Conduct policy, using criteria like the UN Global Compact principles and OECD Guidelines for Multinational Enterprises. The remaining companies are then assessed on the three ESG pillars: environmental factors such as energy efficiency, emissions reduction and waste management; social factors like human rights, workers’ rights, health and safety and diversity; and governance factors including board independence, executive pay, and protection of minority shareholders.

BNP Paribas’s proprietary scoring framework

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

BNP uses its own scoring system to assess companies against their peers on key ESG issues. This four-step process includes selecting and weighting ESG metrics based on what matters most to each business, how easy they are to measure and the quality of available data. Each company starts with a neutral score of 50 and is rated on the three ESG pillars, scoring higher or lower depending on how they perform against peers. A qualitative review is then carried out using third-party data, internal research, and direct engagement, resulting in a final ESG score from zero to 99.

This thorough ESG analysis means AWDS’s portfolio can differ significantly from the index, and some companies may be excluded. However, the fund uses controls to keep returns close to the MSCI World Index, as shown by its performance since launch. If AWDS continues to meet its objectives, investors can expect returns similar to or potentially better than the index, with a stronger ESG profile than a similar passive funds.

Structure

The fund is available in three versions, each with a different ISIN, as shown in Figure 1.

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

The fund is listed on several European exchanges, including London, Euronext Paris, Switzerland, Germany, and Italy, but not all currency versions are available everywhere and some listings are still pending. Only accumulation units are offered, with no distribution units (see page 10). For consistency, we use the ticker AWDS throughout this note, and all performance and benchmark comparisons use the USD NAV, matching 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 French euro line, which has higher volumes than all other lines combined. Spreads differ across exchanges, with the dollar line in London showing a particularly 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, showing how much its returns differed from the benchmark index, was 6.38%. This is high for an active ETF with a quantitative approach and holdings still similar to the index, rather than a more specialised thematic fund. This level of tracking error means AWDS could outperform or underperform the index by a potentially much wider margin than a passive ETF.

Fees

AWDS’s fees are highly competitive.

AWDS’s total expense ratio (TER) is 0.2%. This includes the management fee, custody, fund administration, audit, and regulatory costs, and is reflected daily in the fund’s NAV. It excludes transaction costs from trading securities and investor-level costs like bid-ask spreads or brokerage fees.

AWDS’s TER is competitive, especially for an actively managed fund. Passive global equity ETFs usually charge between 0.12% and 0.22%. Given AWDS’s higher tracking error compared to similar active ETFs, its TER stands out as particularly good value.

Top 10 holdings

Figure 3 shows that AWDS’s top 10 holdings are the same as the benchmark.

Figure 3: Top 10 holdings as at 31 March 2026

Asset allocation

AWDS’s geographic asset allocation is similar to the benchmark. It is therefore dominated by the United States, with the main difference being a lower allocation to the UK. Sector allocation also closely matches the benchmark, differing by only a very small margin (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

Figure 9 shows that AWDS has lagged behind the index since its launch in September 2024. Most of this underperformance happened from launch until April 2024 and again at the start of this year, as shown in Figure 8. However, AWDS performed much better from April 2024 to the end of 2025.

Notably, AWDS underperformed when global equities struggled at the start of 2025, especially during the market volatility caused by President Trump’s “Liberation Day” tariff announcements in April. As equities recovered and rallied, AWDS’s relative performance 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

AWDS has a limited track record due to its short history. Its six-month and one-year performance has lagged behind peers, which has affected its relative performance since launch.

Despite BNP’s smaller presence in European active ETFs (3.7% market share at the end of 2025 compared to JPMorgan’s 45%), AWDS has quickly become a significant player in global equities. This growth is likely helped by its low fees of 20 basis points, the lowest among its peers in Figure 10.

AWDS also has one of the highest tracking errors in the sector, meaning its returns can differ from the benchmark more, both positively and negatively. Only the First Trust fund has a higher one-year tracking error, but its size and results make it an outlier in the group.

No regular dividends – accumulating ETF

AWDS only offers accumulation share classes.

AWDS is an accumulating ETF, meaning any income from its holdings is reinvested into the fund instead of paid out to investors. This boosts the fund’s net asset value and supports long-term growth, but investors do not receive regular cash payments. For reference, the MSCI World Index has a yield of about 1.5%.

AWDS only offers accumulation share classes.

Management

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

BNP Paribas Asset Management, part of the BNP Paribas Group, was established in its current form in 2000 and now operates globally across Europe, the Americas and Asia. It manages about €500bn for institutional, intermediary and retail clients, offering both active and passive strategies across equities, fixed income and multi-asset solutions.

The firm uses central investment oversight with regional teams for portfolio management and research. Teams share research and risk insights across regions while keeping local expertise. Governance is integrated with BNP Paribas Group’s global risk, compliance and sustainability standards.

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