Alternative Investments/ESG: BlackRock Launches Four New Sector ESG ETFs

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Now investors in Europe can buy exposure to niche sectors with an ESG bias.

BlackRock listed the iShares MSCI World Materials Sector ESG UCITS ETF (WMTS), the iShares MSCI World Industrials Sector ESG UCITS ETF (WINS), the iShares World Energy Sector ESG UCITS ETF (WENE) and the iShares MSCI World Communication Services Sector ESG UCITS ETF (WCMS) on the Euronext Amsterdam on April 11. (ETF Stream)

With this launch Blackrock is addressing the increasing tendency of investors to opt for a sectoral tilt in their portfolios as well as their preference for the more sustainable companies in the sector.

Data shows that sector ETPs inflows were six times higher than a decade earlier, with $3.7bn being poured into sector ETFs in the year to date.

The new ETFs will track the relevant MSCI ESG Reduced Carbon Select 20/35 Capped sector index. They are labelled Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).

Each ETF has a TER of 0.25%.

BlackRock ESG Sector ETFs: Fundspeak

Omar Moufti, product strategist for thematic and sector ETFs at BlackRock, said: “Historically on average, the dispersion between the top and bottom sectors is about 30% so if you are able to capture these dynamics, there is a lot of alpha to be generated.”

“Investors have been looking to allocate to cyclical or value and if you have implemented ESG, you are typically underweight many of these smaller, more value-oriented sectors. Now investors can build that tactical asset allocation,” he added.

Related Story: iShares Launches ESG ETF For Low Volatility Large And Mid-cap Stocks

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