BlackRock has thrown down the gauntlet to its rivals in Australia with the launch of two ESG ETFs.
The iShares Core MSCI Australia ESG Leaders ETF (IESG) and the iShares Core MSCI World Ex Australia ESG Leaders ETF (IWLD) are listed on the ASX with a total expense ratio (TER) 0.09%, the cheapest ESG ETFs available in Australia.
IWLD is not a new ETF. It was previously named the iShares Core MSCI World All Cap ETF and tracked the MSCI World Investible Market index.
Following the rebrand, IWLD tracks the MSCI World ex Australia Custom ESG Leaders index which targets 50% of the companies from the MSCI World ex Australia that score best from an ESG perspective.
The ETF’s structure has also been changed so it now physically replicates the underlying securities whereas previously, it was built as a fund of funds that tracked other BlackRock ETFs domiciled in North America.
The index excludes companies involved in controversial industries such as tobacco, controversial weapons, fossil fuels and alcohol.
IESG tracks the MSCI Australia IMI Custom ESG Leaders index which offers exposure to 114 companies that have a higher ESG score relative to companies in the same sector.
Commenting on the launches, James Kingston, head of iShares Australasia at BlackRock, told ETF Stream: “We have worked closely with MSCI to offer broad-based diversified exposures which have higher ESG scores relative to the sector.
“The ETFs highlight BlackRock’s commitment to providing ESG to clients and are priced competitively both from an Australian and offshore perspective.”
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BetaShares currently offers exposure to the largest ESG ETFs in Australia through the $1.1bn BetaShares Global Sustainability Leaders ETF (ETHI) and the $786m BetaShares Australian Sustainability Leaders ETF (FAIR), however, they charge 0.59% and 0.49%, respectively.