BlackRock Launches New SRI, ESG and Infrastructure ETFs

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Stockholm(NordSIP) – In support of the commitment to sustainability expressed by BlackRock‘S CEO Larry Fink at the start of 2020, the asset manager has announced the launch of three new sustainable ETFs, focusing on social responsibility, ESG and infrastructure.

“The transparency of sustainable indexing methodologies empowers portfolio builders to articulate their ESG goals, as the demand for sustainable portfolios grows,” commented Carolyn Weinberg, Global Head of iShares Product at BlackRock. “Investors are taking different routes to embed ESG criteria within their portfolios using ETFs. As we extend our global range we are placing a strong emphasis on helping clients make deliberate investment choices to achieve their objectives.”

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The new social responsibility funds – the iShares MSCI EMU SRI UCITS ETF (SMUA) –  provides targeted exposure to companies registered in member states of the Eurozone with the highest ESG scores. It tracks the MSCI EMU SRI Select Reduced Fossil Fuel index and carries a total expense ratio (TER) of 0.20%. The fund is the ESG alternative to the iShares Core MSCI EMU UCITS ETF (CEU).

The new ESG ETF – the iShares $ Corp Bond ESG UCITS ETF (SUOU) – is an ESG alternative to the flagship iShares $ Corp Bond UCITS ETF (LQDE), which currently holds over US$6.8 billion in assets. The new ETF offers exposure to investment grade USD-denominated corporate bonds with high MSCI ESG ratings and tracks the Bloomberg Barclays MSCI US Corporate Sustainable SRI index and carries a TER of 0.15%.

Lastly, the infrastructure ETF – the iShares Smart City Infrastructure UCITS ETF (CITY) – is a thematic strategy. The fund aims to capitalise on the opportunities presented by the new generation of smart megacities offering sustainable ways of living, in the wake of the global migration from the countryside to cities. It tracks the STOXX Global Smart City Infrastructure index, which also incorporates ESG screening criteria for specific sectors, risks and controversies. The fund carries a TER of 0.40%.

“Just as investors have embraced index investing for efficient, transparent and scalable market exposures in traditional portfolios, ETFs are enabling investors to actively pursue sustainability objectives and take control of their investment outcomes,” Stephen Cohen, Head of iShares EMEA at BlackRock, says. “Providing ESG equivalents to our flagship products while providing innovative thematic products will further steepen the ETF adoption curve, as investors seek out the most efficient market exposure tools with which to navigate markets.”

Image by StockSnap from Pixabay

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In the current economic environment, even the strongest companies will face challenges from the impact of the COVID-19 pandemic. Perhaps now more than ever, understanding the factors that could have a material impact on a company’s sustainability will play a role in investment decision-making.

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