Ultra-Short Bond ESG ETFs to Cope With COVID19

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Stockholm (NordSIP) – BlackRock has launched a new suite of three ultra-short bond ESG ETFs in USD, GBP and EUR. The latest offering combines BlackRock’s recent commitment to ESG with the type of short term liquidity that is needed during a time of crisis, such as the COVID19 outbreak.

The iShares USD Ultrashort Bond ESG UCITS ETF (UEDD) tracks the Markit iBoxx ESG USD Liquid Investment Grade Ultrashort index and is listed on the Euronext Amsterdam. The iShares EUR Ultrashort Bond ESG UCITS ETF (EUED) is listed on Xetra and tracks the Markit iBoxx ESG EUR Liquid Investment grade Ultrashort index. The iShares GBP Ultrashort Bond ESG UCITS ETF (UESD) tracks the Markit iBoxx ESG GBP Liquid Investment Grade Ultrashort index and is listed on the London Stock Exchange. A total expense ratio (TER) of 0.09% applies to the three ETFs.

- Promotion -

The ETFs invest in ESG-screened, investment-grade corporate bonds. The ESG screening includes exclusions of specific sectors, such as controversial weapons, nuclear weapons, conventional weapons, civilian firearms, tobacco, adult entertainment, alcohol, gambling, nuclear power, genetically modified organisms, oil sands and thermal coal.

“Investors are turning to ETFs to access markets and make portfolio allocations quickly and cost-effectively amid market uncertainty, and the trend towards sustainability is weathering the turbulence,” said Brett Olson, Head of Fixed Income iShares EMEA at BlackRock.

Most recently, BlackRock was in the news for the launch of another three SRI, ESG and Infrastructure ETFs. At the time, Stephen Cohen, Head of iShares EMEA at BlackRock, commented that “ETFs are enabling investors to actively pursue sustainability objectives and take control of their investment outcomes. 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 Konstantin Kolosov from Pixabay

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The coronavirus epidemic has further accelerated the rise of ESG into the investment mainstream. As deficits skyrocket, bond investors have an opportunity to engage with governments on climate change, argues Thomas Dillon, Senior Macro ESG Analyst at Aviva Investors.

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