Stockholm (NordSIP) – BlackRock announced the launch of three new equity ETFs combining low volatility with ESG criteria. The ESG ETFs offer sustainable alternatives to standard iShares minimum volatility ETFs and track global, European and US equity indices from MSCI – the MSCI World, MSCI Europe and MSCI USA, respectively.
The iShares Edge MSCI World Minimum Volatility ESG UCITS ETF (MVEW NA; MVEW GY) tracks the MSCI World Minimum Volatility ESG Reduced Carbon Target Index. The iShares Edge MSCI Europe Minimum Volatility ESG UCITS ETF (MVEE GY) tracks the MSCI Europe Minimum Volatility ESG Reduced Carbon Target Index. The iShares Edge MSCI USA Minimum Volatility ESG UCITS ETF (MVEA NA; MVEA GY) tracks the MSCI USA Minimum Volatility ESG Reduced Carbon Target Index. The ESG funds have expense ratios of 0.3%, 0.25% and 0.2%, respectively. All three ETFs are listed on Xetra in euros.
“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,” Stephen Cohen, head of iShares EMEA at BlackRock, said.
Based on the underlying MSCI indices, the ETFs exclude companies experiencing controversies or those involved in weapons, tobacco, thermal coal, and oil sands. The remaining companies are then scored on their ability to manage ESG risks relative to the rest of their industry. An optimisation process reweights the stocks to minimise volatility, constrained to achieving a 30% reduction in carbon intensity and a 20% improvement in overall ESG profile relative vis-à-vis the benchmark. To reduce concentration risk, the methodology also constrains company, sector and country weight differences relative to the underlying indices.
