BlackRock has launched its eleventh ESG ETF in Europe, the iShares MSCI World SRI UCITS ETF (SUSW), designed to deliver exposure to global stock markets with a focus on companies with the strongest Environmental, Social and Governance (ESG) ratings.
MSCI ESG ratings assess how companies are exposed to and manage idiosyncratic risks such as strikes, factory shutdowns, lawsuits, as well as broader industry issues that can create both significant risks and opportunities such as regulation and weather patterns.
The MSCI World SRI Select index, which the fund tracks, also excludes companies involved in severe controversies or in military weapons, civilian firearms, tobacco, alcohol, nuclear power, gambling, adult entertainment and genetically modified organisms.
Manuela Sperandeo, Head of Specialist Sales, iShares EMEA, says: “We consistently hear from our clients that they are looking more closely at improving the ESG and carbon profile of their investments, which they acknowledge helps manage risk in their portfolios.
“This ETF is the latest addition to a range that allows investors to express their active investment decisions on a broad range of markets and geographies, quickly and cost-effectively. Importantly, the SRI index tracked by this ETF has also outperformed its parent index since inception with comparable volatility, which means investors would have not forfeited returns.”
“We are excited that the MSCI World SRI Index will be used for the new iShares ETF. MSCI is a leader in ESG indexes, and the MSCI World SRI index is backed by high quality MSCI ESG Ratings and data,” says Deborah Yang, Managing Director and Head of MSCI Index in EMEA. “Over recent years we have seen a substantial increase in demand from investors to incorporate values and ESG principles into their investment processes, and we currently have more than USD62 billion (as of June 2017) globally in assets benchmarked to MSCI ESG indexes.”
BlackRock manages USD4.7bn of ESG ETF strategies globally, and iShares offers the largest range of sustainable ETFs, both in terms of assets and number of products, in EMEA. The iShares MSCI World SRI UCITS ETF has a total expense ratio of 0.30 per cent.