BlackRock has launched three ETFs that combine environmental, social and governance (ESG) strategies with a minimum volatility factor tilt.
The iShares EDGE MSCI Europe Minimum Volatility ESG UCITS ETF (MVEE) is listed on Xetra and the iShares EDGE MSCI World Minimum Volatility ESG UCITS ETF (MVEW) and the iShares EDGE MSCI USA Minimum Volatility ESG UCITS ETF (MVEA) are listed on Xetra and Euronext Amsterdam.
MVEE offers exposure to the European market and is an ESG alternative to the iShares EDGE MSCI Europe Minimum Volatility UCITS ETF (MVEU), carrying a total expense ratio (TER) of 0.25%.
MVEW offers exposure to the global market and is an ESG alternative to the iShares EDGE MSCI World Minimum Volatility UCITS ETF (MVOL), carrying a TER of 0.3%.
MVEA offers exposure to the US market and is an ESG alternative to the iShares Edge S&P 500 Minimum Volatility UCITS ETF (SPMV), carrying a TER of 0.2%.
The combination of a sustainable strategy with a minimum volatility factor is a result of high demand for sustainable investing amid investors seeking to limit downside exposure in volatile times such as what we are currently seeing as a result of the coronavirus outbreak.
Inflows into global sustainable ETFs totalled $14.8bn in Q1 this year, three times the figure seen in Q1 2019.
BlackRock forecasts assets invested in sustainable index funds and ETFs to grow from $200bn to $1.2trn over the next decade.
The firm argues the drivers for this growth will include the recognition that sustainability influences risk and returns, better data leads to better indices, access to ESG at a fraction of the cost and sustainable choices for every portfolio.
Stephen Cohen (pictured), head of iShares EMEA at BlackRock, said: “As investors take stock of their tactical and strategic positioning, ETFs are playing a central role in portfolios that are increasingly tilted towards ESG criteria."
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