Three Launches: New iShares Sustainable Core ETFs, new portfolio
analytics, transparent ESG data
BlackRock projects global ESG ETF assets will rise to $400 Billion
by 2028
NEW YORK--(BUSINESS WIRE)--
iShares, a pioneer in simplifying investment portfolios for investors,
introduces the iShares Sustainable Core – a line-up of sustainable ETFs
that bundle the ability to focus on purpose and performance – for the
core of investor portfolios.
To simplify sustainable investment’s, BlackRock (NYSE:BLK) also unveiled
transparent ESG data disclosures, new ESG portfolio analytic tools, and
increased accessibility with ESG focused model portfolios.
Demand for sustainable investing is expected to grow dramatically into
the next decade as investors embrace the opportunity to align their
investments with their values and long-term financial objectives. For
many the question now about sustainable ETFs is ‘why not.’
Mark Wiedman, Senior Managing Director, Global Head of iShares and
Index Investments:
“The iShares Core Series gave rise to a new generation of simple, low
cost and efficient investment portfolios. The iShares Sustainable Core
adds purpose to the mix, and is intended to help investors to match
their values to their investments without giving up performance.”
Wiedman said he “expects investors to adopt the iShares
Sustainable Core with the same enthusiasm as the iShares Core Series.”
The iShares Sustainable Core
The iShares Sustainable Core range of ESG ETFs is designed to offer low
cost building blocks for investors to build broad, diversified
sustainable portfolios. It includes a new ESG bond fund as well as six
existing ESG ETF funds offering broad US and international equity and
bond exposures.
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Fund Name
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Ticker
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Expense Ratio
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iShares ESG U.S. Aggregate Bond ETF
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EAGG
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10 bps1
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iShares ESG 1-5 Year USD Corporate Bond ETF
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SUSB
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12 bps
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iShares ESG USD Corporate Bond ETF
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SUSC
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18 bps
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iShares ESG MSCI USA ETF
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ESGU
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15 bps
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iShares ESG MSCI USA Small-Cap ETF
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|
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ESML
|
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17 bps
|
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iShares ESG MSCI EAFE ETF
|
|
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ESGD
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20 bps
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iShares ESG MSCI EM ETF
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ESGE
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25 bps
|
|
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The indexes that the funds seek to track are designed to increase
exposure to securities with positive ESG characteristics while
exhibiting risk and return characteristics similar to those of the
relevant market segment. The indexes exclude securities of producers and
retailers of tobacco, companies involved with controversial weapons,
producers and retailers of civilian firearms, as well as companies
involved in very severe business controversies, in each as determined by
the index provider.2
In the United States, this core suite of sustainable ETFs is part of a
larger platform of iShares ESG ETFs which include a low carbon ETF
(CRBN), the first sustainable impact ETF (SDG), the first ESG ETF (SUSA)
and an ETF that seeks to track the longest running ESG index (DSI).
A new range of Sustainable Core ESG ETFs is also now available in Europe.
New ESG portfolio analysis tools, ESG models, transparent data
improve the ESG investment experience
-
iShares’ website (ishares.com)
now shows ESG and Carbon intensity metrics alongside existing
portfolio characteristics on all ESG ETFs. By early next year these
metrics are expected to be available on all iShares ETFs. ESG metrics
will include the MSCI ESG Quality Score, the MSCI ESG percentage of
coverage, the MSCI Lipper Peer Group percentile ranking, and MSCI
Weighted Average Carbon Intensity. Expanded ESG metrics are expected
to be available by the end of 2019 for all ETFs. The site will also
include iShares Sustainable ETF impact reports so investors can access
more transparent data and understand the tangible outcomes from their
decision to invest sustainably. All of this is part of a firm-wide
initiative to expand access to ESG data and sustainability-related
insights for clients and across our investment processes globally.
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BlackRock is launching a new ESG Portfolio Analyzer for financial
advisors and institutional clients seeking to build sustainable
investment models. The tool helps investors better understand ESG
risks and opportunities. It analyzes ESG scores and tangible metrics
on carbon intensity, as well as the percentage of revenue associated
with sustainable impact solutions. The Analyzer utilizes MSCI’s
underlying ESG Fund Metrics.
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iShares ESG ETFs are now in model portfolios offered by more than 30
broker dealers, RIAs, robo advisors and global asset managers.
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BlackRock Model Portfolios, built with iShares sustainable ETFs, are
available to over 35,000 financial advisors that leverage BlackRock’s
Advisor Center application.
Brian Deese, Head of Sustainable Investing at BlackRock:
“A growing body of research underscores that strong ESG performers are
more resilient and investing in them allows investors to align their
values and beliefs, without sacrificing return. Indeed, with increased
transparency on the sustainability profile of their investment profiles,
we can help investors better understand potential ESG-related risks and
opportunities associated with their investments.”
Tipping point moment for sustainable investing
BlackRock believes that ESG ETFs assets under management will rise in
the next decade driven by increased interest from U.S. wealth investors
as well as continued strong demand from institutions. According to
BlackRock projections, ESG ETF fund assets are expected to grow from $25
billion today to more than $400 billion by 2028. The rapid growth in ESG
ETFs could increase the ETF share of total ESG ETF and mutual fund
assets from 3% today to 21% by 2028.
“Sustainable investing is becoming mainstream investing,” says Deese.
“We do not view sustainable investing as an exercise in trading return
for social outcomes. By identifying scalable, sustainable investment
solutions, we can seek improved financial outcomes for our clients and
accelerate the adoption of sustainable business practices around the
world.”
A firm wide commitment
BlackRock has long believed that sustainability-related issues – from
board composition to human capital management to climate change – have
real long-term financial impacts, with increasing relevance in the
investment process.
Beyond iShares funds, BlackRock currently manages a broad suite of
dedicated sustainable investment solutions, ranging from broad ESG
strategies to thematic and impact strategies that allow clients to align
their capital with the low-carbon transition and the UN Sustainable
Development Goals. BlackRock also manages one of the largest renewable
power funds globally. With deep expertise in alpha-seeking and index
strategies, across public equity and debt, private renewable power,
commodities and real asset strategies, BlackRock continues to build
scalable products and customized solutions across asset classes.
About BlackRock
BlackRock helps investors build better financial futures. As a fiduciary
to our clients, we provide the investment and technology solutions they
need when planning for their most important goals. As of September 30,
2018, the firm managed approximately $6.44 trillion in assets on behalf
of investors worldwide. For additional information on BlackRock, please
visit www.blackrock.com.
About iShares
iShares unlocks opportunity across markets to meet the evolving needs of
investors. With more than twenty years of experience, a global line-up
of 800+ exchange traded funds (ETFs) and $1.8 trillion in assets under
management as of September 30, 2018. iShares continues to drive progress
for the financial industry. iShares funds are powered by the expert
portfolio and risk management of BlackRock, trusted to manage more money
than any other investment firm.3
1Net expense ratio shown for EAGG reflects contractual fee
waiver in place until 6/30/24. Gross expense ratio is 11 bps
2Revenue
thresholds apply to certain sector screens.
3Based on
$6.44 trillion in AUM as of 9/30/18.
Carefully consider the iShares Funds’ investment objectives, risk
factors, and charges and expenses before investing. This and other
information can be found in the Funds’ prospectuses and, if available,
summary prospectuses, which may be obtained by calling 1-800-iShares
(1-800-474-2737) or by visiting www.iShares.com.
Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
This material represents an assessment of the market environment at a
specific time; is subject to change; and is not intended to be a
forecast of future events or a guarantee of future results. This
information should not be relied upon by the reader as research or
investment advice regarding the funds or any issuer or security in
particular.
Funds that concentrate investments in specific industries, sectors,
markets or asset classes may underperform or be more volatile than other
industries, sectors, markets or asset classes and than the general
securities market. Small-capitalization companies may be less stable and
more susceptible to adverse developments, and their securities may be
more volatile and less liquid than larger capitalization companies.
A fund's environmental, social and governance (“ESG”) investment
strategy limits the types and number of investment opportunities
available to the fund and, as a result, the fund may underperform other
funds that do not have an ESG focus. A fund's ESG investment strategy
may result in the fund investing in securities or industry sectors that
underperform the market as a whole or underperform other funds screened
for ESG standards.
The iShares MSCI ACWI Low Carbon Target ETF may not reflect a lower
carbon exposure as there is no guarantee that the underlying index will
achieve its intended results or accurately assess an issuer's actual and
potential carbon emissions.
International investing involves risks, including risks related to
foreign currency, limited liquidity, less government regulation and the
possibility of substantial volatility due to adverse political, economic
or other developments. These risks often are heightened for investments
in emerging/developing markets and in concentrations of single countries.
Fixed income risks include interest-rate and credit risk. Typically,
when interest rates rise, there is a corresponding decline in bond
values. Credit risk refers to the possibility that the bond issuer will
not be able to make principal and interest payments.
Buying and selling shares of ETFs will result in brokerage commissions.
Diversification and asset allocation may not protect against market risk
or loss of principal.
The BlackRock Model Portfolios are not personalized investment advice or
an investment recommendation from BlackRock, and are intended for use
only by a third party financial advisor, with other information, as a
resource to help build a portfolio or as an input in the development of
investment advice for its own clients. Such financial advisors are
responsible for making their own independent judgment as to how to use
the BlackRock Model Portfolios. BlackRock does not have investment
discretion over or place trade orders for any portfolios or accounts
derived from the BlackRock Model Portfolios. Performance of any account
or portfolio derived from the BlackRock Model Portfolios may vary
materially from the performance of the BlackRock Model Portfolios. There
is no guarantee that any investment strategy will be successful or
achieve any particular level of results. The BlackRock Model Portfolios
are not funds or investments.
The iShares Funds that are registered with the US Securities and
Exchange Commission under the Investment Company Act of 1940 are
distributed in the US by BlackRock Investments, LLC (together with its
affiliates, “BlackRock”). This material does not constitute an offer or
solicitation to sell or a solicitation of an offer to buy any shares of
any Fund (nor shall any such shares be offered or sold to any person) in
any jurisdiction in which an offer, solicitation, purchase or sale would
be unlawful under the securities law of that jurisdiction. The iShares
Funds are not sponsored, endorsed, issued, sold or promoted by MSCI
Inc., nor does this company make any representation regarding the
advisability of investing in the Funds. BlackRock is not affiliated with
MSCI Inc.
©2018 BlackRock. All rights reserved. iSHARES and BLACKROCK
are registered trademarks of BlackRock. All other marks are the property
of their respective owners.
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BlackRock
Ed Sweeney, 646-231-0268
Ed.Sweeney@BlackRock.com
Source: BlackRock