HSBC Asset Management has unveiled its first fixed income ETFs with the launch of two environmental, social and governance (ESG) corporate bond ETFs, ETF Stream can reveal.
The HSBC Bloomberg EUR Corporate Sustainability Bond UCITS ETF (HEUC) and the HSBC Bloomberg USD Corporate Sustainability UCITS ETF (HUSC) are listed on the London Stock Exchange with a total expense ratio of 0.18%.
The ETFs track the Bloomberg Barclays MSCI Corporate SRI ESG-Weighted index which “seeks to provide consistent beta exposure to the high-quality and diversified corporate bond universe”.
The index has an additional carbon screen to all three of Bloomberg’s existing ESG index approaches which allow it to exclude companies involved in controversial industries and the worst carbon emissions offenders.
HEUC and HUSC also have a socially responsible investment filter, excluding controversial industries including tobacco, alcohol, thermal coal, nuclear energy and breaches of the United Nations Global Compact principles.
The index will rebalance every month while the screening methodology will adapt as issuer disclosure of data improves.
HSBC AM said the ETFs are the first two as part of a wider range with more expected to be listed across Europe in the coming weeks.
Olga de Tapia, global head of ETF sales at HSBC AM, said: “Our new fixed income ETF range takes a step beyond many existing sustainable fixed Income ETF products offering the investor a deeper shade of green in their investment portfolios.”
Erin Leonard, head of sustainability at HSBC AM, added: “Investors have a key part to play in the global transition to a net-zero economy by allocating capital away from firms with poor ESG practices and pressuring issuers to improve transparency.
“These fixed income ETFs are a complementary extension of our existing equity ESG ETF fund range and an important part of the sustainability solution set for our clients.”
Earlier this month HSBC AM expanded its climate ETF range with the launch of a Japanese equity strategy, the HSBC Japan Climate Paris Aligned UCITS ETF (HPJP).
The other three ETFs are: