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BlackRock launches three ultra-short bond ESG ETFs

George Geddes

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BlackRock has launched three ultra-short bond ETFs with an environmental, social and governance (ESG) tilt, denominated in USD, GBP and EUR.

The launch includes:

  • iShares USD Ultrashort ESG Bond UCITS ETF (UEDD)

  • iShares GBP Ultrashort ESG Bond UCITS ETF (UESD)

  • iShares EUR Ultrashort ESG Bond UCITS ETF (EUED)

UEDD is listed on the Euronext Amsterdam, UESD is listed on the London Stock Exchange and EUED is listed on Xetra.

All three ETFs have a total expense ratio (TER) of 0.09%.

The three ETFs track the performance of the iBoxx MSCI ESG Liquid Investment Grade Ultrashort index but in their respective currencies. It is comprised of ESG-screened, investment grade corporate bonds.

To be included in the funds, bonds must come from an issuer with an MSCI ESG rating of BBB or above.

This excludes any issuer that is explicitly involved in controversial weapons, tobacco, alcohol, gambling, genetically modified organisms, oil sands and thermal coal.

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Brett Olson (pictured), head of fixed income iShares EMEA at BlackRock, said in a statement: “Investors are turning to ETFs to access markets and make portfolio allocations quickly and cost-effectively amid market uncertainty, and the trend towards sustainability is weathering the turbulence."

BlackRock also expanded its ESG offering at the beginning of March with the launch of an equity, a fixed income and a thematic product. According to the firm, the global sustainable ETF industry had attracted $14.3bn in assets year-to-date, as at 13 March.

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

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