In Germany, Austria and Switzerland from 2014 to 2017, the total assets under management for Socially Responsible principles have increased threefold from €875bn to €2.7tn, according to UBS. “Responsible investments are no longer simply a trend”, says the bank in an announcement.
As demand continues to grow, UBS has issued a Socially Responsible ETF in addition to its already wide range of SRI products. The Sustainable Development UBS Bank Bonds UCITS ETF (MDBU) tracks the Solactive UBS Global Multilateral Development Bank Bond USD 25% Issuer Capped TR Index.
The index is comprised of bonds issued by banks with focus on projects which develop communities. Financing from the likes of the World Bank and the European bank are relied upon by developing countries for the growth of their economies. Additionally the finance is used for the protection for local environment which is a key driver for the demand of SRI and ESG screened ETFs.
All securities included in MDBU have been allocated a minimum rating of AA- S&P or Aa3 (Moody’s), have a minimum issue amount of $500m and have a maturity of at least 12 months. The ETF has an annual flat fee rate of 0.18 per cent.
Clemens Reuters, Global Head of ETF Investments, said: “These securities combine yields of 10-30 basis points above the US Treasury yield with the possibility to do some good, as the funds collected are used to finance loans at very low rates in developing countries, with a view to reducing poverty and supporting the creation of infrastructures and growth of local economies.”