New Listing

BlackRock launches global real estate ESG ETF

The ETF tilts towards environmentally friendly real estate

Theo Andrew

ESG green finance building

BlackRock has launched a global real estate ETF with an environmental tilt, ETF Stream can reveal.

The BlackRock Global Real Estate Environment Tilt UCITS ETF (GRET) is listed on Euronext Amsterdam with a total expense ratio (TER) of 0.18%.

The ETF tracks the FTSE EPRA Nareit Developed Green Low Carbon Target Select UCITS capped index which uses ESG screening and tilting methodology.

Companies involved in oil sands, thermal coal, controversial weapons, military contracting, tobacco and small arms will be excluded.

The index will also tilt toward constituents to achieve an improvement in the allocation of green certification and a reduction in energy usage and carbon energy.

BlackRock said the ETF will have an environmental indicator “at least 20%” better than its investment universe, based on its tilt towards green certification.

The ETF is labelled Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).

It added the ETF could be used as a natural inflation hedge as rents and values tend to increase with prices.

The index currently tracks 343 stocks, holds a dividend yield of 3.8% and a price-to-earnings ratio of 17x.

There are 11 other ETFs tracking the sector, and GRET is the cheapest offering global exposure.

The largest ETF in the space is the $748m Xtrackers FTSE EPRA/NAREIT Developed Europe Real Estate UCITS ETF (XDER).

Last month, BlackRock unveiled a five-strong climate transition ETF range.

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