Friday Funds: BlackRock launches sovereign bond fund assessing climate risk

The latest developments in ESG-related funds

BlackRock has launched the first ever sovereign bond ETF with climate considerations embedded. The investment giant has based the new fund, which started trading on Xetra – Deutsche Börse’s ETF venue – this week, on FTSE Russell’s Advanced Climate EGBI benchmark. The benchmark focuses on Eurozone government bonds, but applies additional scores for physical and transition risks and resiliency, tilting the constituents according to their exposure to climate. 

Bank J. Safra Sarasin has launched the JSS Responsible Equity-India fund, advised by AA-rated portfolio manager Ajay Tyagi from India-based UTI Mutual Fund. The new vehicle will take a bottom-up approach to stock picking and integrate responsible investment practices, “resulting in a high conviction portfolio”, according to a statement. 

Invesco Canada has launched an ETF tracking the S&P/TSX Composite ESG Index. The index uses S&P DJI data to select the best ESG performers from the benchmark index, offering “Canadian investors access to notable Canadian companies that have a thoughtful ESG tilt”, Invesco said in a statement. The ETF will have a management fee of 15 basis points. 

McDermott Will & Emery has advised UNICEF and the Education Outcome Fund on setting up education programmes in Africa and the Middle East. The legal firm’s Impact Finance Group advised the pair on setting up a joint structure.

WHEB Asset Management will launch a post-Brexit UCITS fund, domiciled in Ireland. The London-based sustainability specialist hopes the new vehicle will enable European clients to continue to access its strategy after the UK departs the EU. The WHEB Asset Management Funds ICAV is structured as an Irish Collective Asset-management Vehicle and will have a sub-fund called the WHEB Sustainable Impact Fund, expected to launch in coming months. It will mirror its existing impact investment fund. The asset manager has appointed FundRock Management to act as the new fund’s management company. 

Canada Life says “the heightened awareness and interest in sustainable investing” has prompted it to add “some of the leading funds offering various ESG, impact and ethical approaches” to its existing Retirement Account drawdown platform, giving its clients and financial advisors’ more options. The move is part of a wider expansion of the platform, which will see 430 funds from major asset managers and investment specialists added, bringing the number of funds available to more than 1,500. Fund managers include Columbia Threadneedle, M&G, LGIM and Seneca.

Aberdeen Standard Capital has launched a model portfolio service (MPS) with a focus on sustainability and ESG. The portfolios, constructed predominantly from Aberdeen Standard Investments funds, will be managed by Darren Ripton, Jason Day and Eric Louw.  

State Street Global Advisors has launched three Climate Equity Funds designed to help investors reduce climate risk in their portfolios and target Paris-aligned reductions in carbon production by reallocating capital towards companies with good climate strategies. The three funds cover US, European and Global universes, and will exclude companies with norms-based violations or serious controversies. Remaining stocks will then be assessed on carbon intensity, embedded fossil fuel reserves emissions, percentage of fossil revenue, percentage of green revenue and adaptation score on climate change preparedness.

HSBC Global Asset Management has expanded its sustainability equity ETF range with a UK edition. The UCITS fund will track the FTSE UK ESG Low-carbon Select Index. The launch brings HSBC’s sustainable equity ETFs to seven.