Governance

iShares launches ESG-themed ETFs on the London Stock Exchange

BlackRock arm responds to investor demand

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Global asset manager BlackRock’s iShares exchange traded funds (ETFs) arm has launched two environmental, social and governance-themed equity funds on the London Stock Exchange.
It said the move, which features a global and a European fund, is in response to investors’ demand for funds which invest according to environmental, social and governance (ESG) criteria.
The Dublin-domiciled UCITS III-compliant ETFs are based on the Dow Jones Sustainability Indexes series which uses criteria from Swiss-based sustainability investing specialist Sustainable Asset Management (SAM).
“We have seen growing demand from clients for ways in which they can incorporate environmental, social and governance considerations into their investments,” said Axel Lomholt, head of iShares’ product development in Europe, the Middle East and Africa.
The global fund – the iShares Dow Jones Global Sustainability Screened (IGSC) – tracks the Dow Jones Sustainability World Index ex Alcohol,Tobacco, Gambling, Armaments & Firearms and Adult Entertainment. The European offering – the iShares Dow Jones Europe Sustainability Screened fund (IESE) – tracks its European equivalent.
iShares, which had total assets under management of $509bn as at March last year, said the ETFs are physically backed products and claims they are the first London-listed ETFs to offer regional access to the sustainable sector.
The global fund’s top 10 holdings are HSBC, Nestle, BHP Billiton, Toyota, Novartis, Total, Siemens, Roche Holding, Banco Santander and GlaxoSmithKline. The European fund’s top holdings are HSBC, Nestle, Novartis, Total, Siemens, Roche, Santander, Rio Tinto, BHP Billiton and BASF.
Michael Baldinger, chief executive of SAM said: “We believe these well engineered products will meet investor’s needs.” Separately, SAM launched its 116-page Sustainability Yearbook today.
United Nations Principles for Responsible Investment signatory BlackRock bought the iShares business when it acquired Barclays Global Investors in 2009.