BlackRock has launched its eleventh ESG ETF into the European marketplace.
The iShares MSCI World SRI UCITS ETF, as it is called, aims to deliver exposure to global stock markets with a focus on companies with the strongest environmental, social and governance (ESG) ratings, the company said in a statement announcing the launch.
The new product will use MSCI ESG ratings to assess how companies are exposed to and manage “idiosyncratic risks” such as strikes, factory shutdowns, lawsuits, as well as broader industry issues that can create both significant risks and opportunities such as regulation and weather patterns.
The fund tracks the MSCI World SRI Select index, which excludes companies involved in severe controversies or in military weapons, civilian firearms, tobacco, alcohol, nuclear power, gambling, adult entertainment and genetically modified organisms.
The iShares MSCI World SRI UCITS ETF has a total expense ratio of 0.30%.
ESG and carbon profile
Manuela Sperandeo, head of specialist sales, iShares EMEA, said that the fund had been launched in response to clients who were “looking more closely at improving the ESG and carbon profile of their investments”, which he noted is seen as a means of helping to manage portfolios risk.
“This ETF is the latest addition to a range that allows investors to express their active investment decisions on a broad range of markets and geographies, quickly and cost-effectively,” he said.
“Importantly, the SRI index tracked by this ETF has also outperformed its parent index since inception with comparable volatility, which means investors would have not forfeited returns.”
Deborah Yang, managing director and head of MSCI Index in EMEA said that over recent years they have seen a “substantial increase” in demand from investors to incorporate values and ESG principles into their investment processes. There is more than US$62bn (as of June 2017) invested globally in assets benchmarked to MSCI ESG indexes.
BlackRock manages US$4.7bn of ESG ETF strategies on behalf of our clients globally, and iShares offers what it believes is the largest range of sustainable ETFs, both in terms of assets and number of products, in EMEA.