TD Launches New ETFs Offering Exposure to ESG Screened Corporate Bonds Indices
Investment management firm TD Asset Management (TDAM) announced today the launch of the TD Morningstar ESG Canada Corporate Bond Index ETF (TMCC), and TD Morningstar ESG U.S. Corporate Bond Index ETF (TMUC), offering access to investors to corporate bond benchmarks screened for ESG performance.
According to Priti Shokeen, Vice President & Director, ESG Research & Engagement at TDAM, the new ETFs are designed to maintain similar interest rate sensitivity, yield, sector weights, and credit quality as their non-ESG screened parent indexes, Morningstar Canada Corporate Bond Index, and Morningstar US Corporate Bond Index, respectively. As part of a diversified portfolio, they can also complement the TD Morningstar ESG Equity Index ETFs, introduced in December 2020.
“At TDAM, we are always looking for more ways to help investors align their investments with sustainable options Our new TD Morningstar ESG Canada Corporate Bond Index ETF (TMCC) and TD Morningstar ESG U.S. Corporate Bond Index ETF (TMUC) offer a convenient, low-cost way to gain exposure to fixed-income securities that are investment grade quality and also meetrigorous ESG criteria.”
For the new ETFs, TDAM stated that it will leverage the index construction capabilities and research of independent investment and index provider Morningstar, and ESG ratings and research provider Sustainalytics. The index methodology utilized in the new ETFs includes companies that have low ESG risk ratings and eliminates companies with product involvements in tobacco, small arms, and controversial weapons.
Katie Binns, Senior Product Manager, Fixed Income & Multi-Asset Indexes at Morningstar, Inc, said:
“We’re so excited to build on our ESG collaboration with TDAM, extending beyond ESG equity indexes to provide our ESG fixed income indexes as well. Sustainable investing is a rapidly growing part of investor portfolios and providing a consistent multi-asset lens to ESG risk considerations is increasingly important to clients. Working closely with our colleagues at Morningstar, Sustainalytics and TDAM, we believe we have designed unique indexes to meet the needs of ESG-oriented investors across asset classes.”