BlackRock has revealed the launch of two sustainable equity exchange-traded funds (ETFs) to address increasing demand by investors for socially-responsible and long-term investments. These funds broaden BlackRock’s ESG and impact product offer that includes index funds, active funds and ETFs.
The two new funds track indices consisting of companies with MSCI environmental, social and governance (ESG) ratings level BB and above. This metric rates companies on 37 key ESG factors including carbon emissions and business ethics. The indices aim to minimise exposure to activities involving alcohol, tobacco, gambling, civilian firearms, military weapons, nuclear power, adult entertainment and genetically modified organisms (GMOs).
The iShares Sustainable MSCI Emerging Markets SRI UCITS ETF (SUSM) tracks the MSCI Emerging Markets SRI index, which includes large and mid-cap equities across 23 emerging market countries. The iShares Sustainable MSCI USA SRI UCITS ETF (SUAS) tracks the MSCI USA SRI Index, which includes large and mid-cap companies in the USA.
Both funds are physically-replicating, meaning they buy the securities of the index, and have a total expense ratio of 0.35% and 0.30% respectively.
Tom Fekete, Head of Product for iShares EMEA, commented: “The investment goal of many investors includes generating positive long-term and sustainable impact, and this approach is growing into a mainstream trend. These two funds seek to provide this growing group of investors with the tools to be nimble and cost-effective in their portfolio allocation across asset classes.”
This is an exciting area of innovation that we will continue to focus on over the next few years.
iShares, BlackRock’s ETF business, launched the iShares Euro Corporate Bond Sustainability Screened 0-3yr UCITS ETF (SUSE) earlier this year. BlackRock currently manages more than USD$200 billion of assets across ESG screened and impact funds globally. iShares is a global leader in sustainable ETF investing, and offers a range of developed and emerging equity, as well as corporate bond ETFs.
To learn more about how ETFs work, visit the education section of the iShares website or watch this 3-minute intro to ETFs: https://www.youtube.com/watch?v=etQ-iJ3pT00