New Listing

BlackRock launches S&P 500 equal weight and ESG ETFs

Unveiled on 4 August

Jamie Gordon

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BlackRock has expanded its ETF range with the launch of two S&P 500 ETFs taking equal weight and ESG exposures.

The iShares S&P 500 ESG UCITS ETF (ESPX) has listed on Euronext Amsterdam and Deutsche Boerse with a total expense ratio (TER) of 0.07%, equivalent to the vanilla iShares Core S&P 500 UCITS ETF (CSPX).

The iShares S&P 500 Equal Weight UCITS ETF (EWSP) has listed on the London Stock Exchange and Euronext Amsterdam with a TER of 0.20%. 

BlackRock also launched the currency hedged iShares S&P 500 Equal Weight UCITS ETF GBP Hedged (ISPE) with a fee of 0.22%.

ESPX joins eight strategies from other providers in tracking the S&P 500 ESG index, which currently overweights the information technology sector by 3.3% versus its parent benchmark. 

Interestingly, the ESG benchmark awards a modest 0.2% extra allocation to the energy sector versus the vanilla S&P 500.

The S&P 500 ESG index also made headlines in May for ejecting Tesla based on the company’s lack of explicit low carbon strategy, codes of business conduct and controversies surrounding alleged discrimination and loss of life linked to its autopilot vehicles.

EWSP becomes the sixth strategy tracking the S&P 500 Equal Weight index which overweights cyclical sectors.

The benchmark underweights information technology by 12.1% and offers an extra 6.7% to industrials, 2.6% to financials while real estate and utilities both see their weights roughly double.

S&P 500 equal weight ETFs have come into fashion since the COVID-19 economic recovery started in late 2020. The Xtrackers S&P 500 Equal Weight UCITS ETF (XDEW) more than doubled in size in the three months to the end of January 2021. 

The Invesco S&P 500 Equal Weight UCITS ETF (SPED) subsequently launched last April and the Amundi S&P 500 Equal Weight ESG Leaders UCITS ETF (WELE) debuted last month.

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