BlackRock targets ESG with EM debt funds launch

Eugenia Jiménez
BlackRock targets ESG with EM debt funds launch

BlackRock has launched a range of four open-ended emerging market debt funds focusing on ESG.

The range of funds, created in partnership with JP Morgan, are actively managed against the JESG EMD indices, an ESG specialist benchmark launched by JP Morgan in collaboration with BlackRock last April.

The four Ucits funds are the BGF ESG Emerging Markets Bond, Emerging Markets Local Currency Bond, Emerging Markets Corporate Bond and Emerging Markets Blended Bond funds.

The range of funds will invest in debt issued by governments, public local authorities or corporates in emerging markets.

The indices will screet out sectors including thermal coal, tobacco, weapons and any violator of the United Nations Global Compact principles.

Giulia Pellegrini, head of EMD sustainable investing at BlackRock, said: “The gap between leaders and laggards in ESG issues is large in the EM field, and solid data in this area can provide forward-looking information that portrays the underlying deterioration of an issuer’s creditworthiness, sometimes well before standard macro credit metrics.”

Sergio Trigo Paz, head of emerging market debt at BlackRock, said: “There is a real opportunity to seek out enhanced returns using insightful ESG analysis, big data and text mining, as well as boots-on-the-ground engagement with issuers.”