BlackRock expands iShares fixed income ETF range
BlackRock has expanded its range of ETFs and index solutions with the launch of the iShares € Green Bond UCITS ETF (GRON) and the iShares Global Govt Bond Climate UCITS ETF (CGGD).
The iShares € Green Bond UCITS ETF is designed to provide investors with an additional building block as they look to align their portfolios with a net zero pathway. It tracks the Bloomberg Barclays MSCI Euro Green Bond SRI including Nuclear Power Index offering exposure to over 300EUR-denominated investment grade green bonds from 160 issuers across four sectors of the fixed income market. The primary purpose of a green bond is to raise capital and investment for projects with environmental benefits, such as renewable energy, green buildings, wastewater management, energy efficiency, and public transport.
The transparency afforded to green bond investors via impact reporting is a unique feature of the fund, and BlackRock will publish proprietary portfolio impact reports on the environmental benefit of the underlying holdings. The Fund further screens out securities involved in certain business activities such as controversial weapons and nuclear weapons as well as those associated with major ESG controversies.
The iShares Global Govt Bond Climate UCITS ETF offers investors cost effective exposure to government bonds whilst incorporating climate risk. The new Fund tracks the FTSE Advanced Climate Risk Adjusted World Government Bond Index and offers exposure to global government bonds, taking the FTSE World Government Bond Index (WGBI) as a starting point. The index adjusts country weights based on a forward-looking assessment of climate risk faced by sovereigns using three pillars; physical risk, transition risk and resiliency to climate change.
This new Fund complements the existing iShares € Govt Bond Climate UCITS ETF, the first European domiciled climate government bond UCITS ETF launched in October 2020, which includes countries within the European Monetary Union. These products provide clients with robust solutions to address climate risk within their government bond allocation and the flexibility to gain diversified exposure to investment grade Eurozone or global government bonds.
Today’s launches support BlackRock’s expectation that 70 per cent of its fund launches and repositionings in Europe will be Article 8 or 9 under the European Union’s Sustainable Finance Disclosure Regulation (SFDR). The iShares € Green Bond UCITS ETF is categorised as Article 9 and the iShares Global Govt Bond Climate UCITS ETF is categorised as Article 8.
Brett Olson, Head of Fixed Income iShares in EMEA for BlackRock says: “We are committed to helping investors build sustainable portfolios that align with their specific goals. The AUM of our iShares EMEA fixed income range has grown by around 29 per cent in the past year, as investors are increasingly using them as transparent, efficient building blocks to access the bond market sustainably.”