State Street Global Advisors expands ESG lineup with new fixed income SPDR ETF
State Street Global Advisors, the asset management business of State Street Corporation, has launched the SPDR Bloomberg SASB Corporate Bond ESG Select ETF (RBND).
The newest SPDR ETF was developed to meet the demand for core fixed income ESG aware exposure, providing access to US dollar-denominated Investment Grade corporate bonds.
One of the durable trends reshaping the investment management industry over the past decade has been that investors want more choice. However, when it comes to ESG investing, equity ETFs have dominated the market, while choices for ESG-minded fixed income investors have been limited.
“Investors’ increasing appetite for cost-effective ESG solutions is not exclusive to the equity allocations in their portfolios,” says Noel Archard, global head of SPDR product at State Street Global Advisors. “With the launch of RBND, SPDR’s first fixed income ESG ETF publicly offered in the US, investors will now be able to better align their core fixed income exposures with their investment goals.”
The SPDR Bloomberg SASB Corporate Bond ESG Select ETF seeks to track the Bloomberg SASB US Corporate ESG Ex-Controversies Select Index. The index was developed by Bloomberg in collaboration with the Sustainability Accounting Standards Board (SASB).
The index measures the performance of investment grade corporate bonds issued by companies that demonstrate certain environmental, social and governance characteristics, while also exhibiting risk and return characteristics that are comparable to those of the Bloomberg Barclays US Corporate Index.
The index methodology excludes issuers from the Bloomberg Barclays US Corporate Index that are involved in, and/or which derive significant revenue from, operations related to extreme event controversies, controversial weapons, UN global compact violations, civilian firearms, thermal coal extraction, and tobacco.
“Overcoming the challenges created by the lack of standardisation in ESG data requires access to quality data from multiple sources. RBND is designed to help investors cut through the noise and integrate material ESG factors at the core of their fixed income portfolios,” Archard says.