Liquid Alternatives: BlackRock Floats ESG Linked Ultra Short ETFs

March 25, 2020 | Liquid Alternatives, News

The global sustainable ETF industry has attracted $14.3 billion year-to-date.

Investors remain undeterred by the market turmoil and sustainability remains an investing priority. Accordingly, BlackRock has launched three ESG-screened, ultra short term ETFs in Europe. The ETFs are denominated in US dollars, euros, or pound sterling depending on the underlying investment-grade corporate bonds. (ETF STRATEGY)

The three new BlackRock ETFs

These are as follows:

Name of BlackRock ETF Currency Seed Capital Index Expense Ratio
iShares USD Ultrashort Bond ESG UCITS ETF (AEX: UEDD) USD $10M Markit iBoxx ESG USD Liquid Investment Grade Ultrashort Index. 0.09%
iShares EUR Ultrashort Bond ESG UCITS ETF (GER: EUED) EUR €25M Markit iBoxx ESG EUR Liquid Investment grade Ultrashort Index. 0.09%
iShares GBP Ultrashort Bond ESG UCITS ETF (LON: UESD) GBP £25M Markit iBoxx ESG GBP Liquid Investment Grade Ultrashort Index. 0.09%

The new BlackRock ETFs will distribute income semi-annually.

Brett Olson, Head of Fixed income iShares EMEA at BlackRock, commented, “Investors are turning to iShares ETFs to access markets and make portfolio allocations quickly and cost-effectively amid market uncertainty, and the trend towards sustainability is weathering the turbulence. The global sustainable ETF industry has attracted $14.3 billion since the start of the year, and we remain committed to providing investors with the choice of investment tools to build resilient portfolios and meet sustainability goals.”

BlackRock has committed to double its ESG ETF and index offering by the end of 2021.

How it works

The bonds universe comprises investment-grade corporate bonds issued by industrial, utility, and financial companies.

The new BlackRock funds use data from MSCI ESG Research to exclude companies that are involved in weapons, firearms, tobacco, adult entertainment, alcohol, gambling, nuclear power, genetically modified organisms, and fossil fuel, as well as firms that are violators of the UN Global Compact or are embroiled in severe ESG controversies.

The remaining population of issuers is graded concerning ESG risk on a seven-point scale.

Related Story:     Liquid Alternatives: Lyxor Launches High Yield Bond ETFs With ESG Exposure

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