New Listing

BlackRock expands ESG ETF range with triple launch

Tom Eckett

a man wearing a suit

BlackRock has expanded its environmental, social and governance (ESG) ETF range with the launch of one equity, one fixed income and one thematic product.

The launches follow BlackRock’s commitment earlier this year to double its ESG ETF and index offering by the end of 2021.

The iShares MSCI EMU SRI UCITS ETF (SMUA) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.20%.

Tracking the MSCI EMU SRI Select Reduced Fossil Fuel index, SMUA offers investors exposure to stocks within the European Monetary Union with strong ESG scores.

The iShares $ Corp Bond ESG UCITS ETF (SUOU) tracks a basket of investment grade US dollar-denominated corporate bonds with high ESG ratings calculated by MSCI.

Tracking the Bloomberg Barclays MSCI US Corporate Sustainable SRI index with a TER of 0.15%, SUOU is the ESG version of the $6.8bn iShares $ Corp Bond UCITS ETF (LQDE).

Finally, the iShares Smart City Infrastructure UCITS ETF (CITY) is a thematic product that aims to capture the opportunities presented by the new generation of smart megacities offering sustainable ways of living, in the wake of the global migration from the countryside to cities.

With a TER of 0.40%, CITY tracks the STOXX Global Smart City Infrastructure index which has an ESG screen for certain sectors risks and controversies.

Stephen Cohen (pictured), head of iShares EMEA at BlackRock, commented: “Just as investors have embraced index investing for efficient, transparent and scalable market exposures in traditional portfolios, ETFs are enabling investors to actively pursue sustainability objectives and take control of their investment outcomes.

“Providing ESG equivalents to our flagship products while providing thematic products will further steepen the ETF adoption curve, as investors seek out the most efficient market exposure tools with which to navigate markets.”

Moody’s: ESG is next growth frontier for asset managers

Carolyn Weinberg, global head of iShares product at BlackRock, added: “The transparency of sustainable indexing methodologies empowers portfolio builders to articulate their ESG goals, as the demand for sustainable portfolios grows.

“Investors are taking different routes to embed ESG criteria within their portfolios using ETFs.”

The launches come after BlackRock’s chairman and CEO Larry Fink, in his annual letter to chief executives, pledged to put sustainability at the centre of the firm’s investment strategy earlier this year.

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