As part of its consideration to environmental, social and governance (ESG) considerations, BlackRock subsidiary iShares has listed three ESG exchange traded funds (ETFs).
It comes 18 months after BlackRock chief executive, Larry Fink, pledged to ditch coal and offer sustainable versions of their flagship model portfolios and iShares funds.
The three funds were the first equity ESG funds released by iShares in Australia:
- iShares Core MSCI Australia ESG Leaders;
- iShares Core MSCI World Ex Australia ESG Leaders; and
- iShares Core MSCI World ex Australia ESG Leaders (AUD Hedged).
The iShares Core MSCI Australia ESG Leaders ETF sought to provide investors with targeted exposures to companies with improved sustainability credentials relative to their sector peers in the Australian market.
The iShares Core MSCI World Ex Australia ESG Leaders fund was previously labelled as the iShares Core MSCI World All Cap and had been updated to reflect ESG considerations.
The ESG enhancements made to the iShares Core MSCI World ex Australia ESG Leaders ETF funds aimed to provide investors with broadly diversified international equity exposure as well as improved sustainability credentials relative to their peers.
The changes to structure of those two funds also sought to minimise tracking error and both funds maintained their ‘Recommended’ ratings from Zenith Investment Partners.
The management fees for the Australia ESG Leaders and World Ex Australia ESG Leaders funds would be 9bps, while the hedged version of the World Ex Australia ESG Leaders fund would have a 12bps fee.
James Kingston, head of iShares Australasia, said ESG had become a critical consideration for its clients in constructing portfolios, including incorporating their sustainability goals as well as improving overall portfolio resilience.
“ETFs have a pivotal role to play in being the foundational building blocks for investors to integrate sustainability into their portfolios in a cost-effective manner,” Kingston said.
“Our local iShares ESG ETF suite aims to assist more Australian investors in fulfilling both their financial and sustainability-related investment goals and is part of BlackRock’s broader commitment to make sustainability our standard of investing.”