In another step towards fulfilling its sustainability commitments made in January, BlackRock announced that it is launching a new suite of iShares ESG ETFs, adding more depth to the company’s sustainability-themed portfolio of products.
The suites launched today include iShares ESG Aware Asset Allocation ETFs, a range of ESG asset allocation ETFs providing investors with exposure to investments with favorable ESG characteristics, and; iShares ESG Advanced MSCI ETFs, a set of ETFs targeting companies with high ESG scores, while screening extensively for company involvement in a controversial activities.
In a groundbreaking Annual letter to CEOs in January, BlackRock CEO Larry Fink established the firm’s renewed commitment to sustainable investing, writing, “our investment conviction is that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors, and with the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward.” The firm committed to a broad range of actions including significantly increasing the range of sustainable investment products offered to investors, exiting investments in its active portfolios with high sustainability-related risks, and calling on CEOs to take action on addressing ESG risks. The new ETFs launched today are part of this effort.
Commenting on the introduction of the new products, Carolyn Weinberg, BlackRock Managing Director and Global Head of Product, ETF and Index Investments, said:
“The significant acceleration of sustainable index investing has been driven by four forces: an acceptance that sustainable characteristics are consequential to returns, better data is leading to better indexes, sustainable ETFs are generally low cost, and an expanding universe of fund options are enabling investors to construct sustainable portfolios with ESG goals alongside traditional risk and reward objectives. Our new funds launching today give investors new opportunities to efficiently access ESG investing. Our iShares ESG Aware Asset Allocation ETFs are designed to simplify the ESG investment process with single-ticker solutions.”
The iShares ESG Aware Asset Allocation ETFs launches with a set of four ETFs to match various risk profiles for investors including Conservative, Moderate, Growth and Aggressive Allocation products. Each of the products tracks the investment results of an index composed of a portfolio of underlying equity and fixed income funds with positive ESG characteristics, with a fixed allocation strategy corresponding to its risk profile. Intended to provide low-cost building blocks to provide investors with exposure to companies with favorable ESG characteristics, the four new ETFs have an expense ratio of 0.18%.
Introducing the new iShares ESG Aware Asset Allocation ETFs, Weinberg added:
“Our iShares ESG Aware Asset Allocation ETFs are designed with a spectrum of sustainable investors in mind, allowing each individual more flexibility and options to choose solutions that are appropriate for their risk tolerance and goals.”
The iShares ESG Advanced MSCI ETFs introduced today are intended to provide investors with exposure with high ESG scores, while screening extensively for controversial activities, such as fossil fuels, palm oil, for-profit prisons, and controversial weapons. This group of products includes two equity ETFs, launching this week, offering exposure to the U.S. and developed markets, a US bond market ETF launching next week, and an emerging markets equity ETF expected to list in September.
Diana Tidd, Head of Index at MSCI, commented:
“MSCI has been a leader in sustainable indexes for 30 years and, over that time, we have witnessed increasing demand from investors to incorporate ESG considerations into their investment decision making process. Using transparent, informative ESG research and analysis, our wide range of indexes aim to help institutional investors seeking to achieve their sustainable investing goals.”