BlackRock is set to change the names and underlying indices of its consumer staples and consumer discretionary sector ETFs to incorporate low carbon criteria.
Effective 1 December, the iShares MSCI World Consumer Staples Sector UCITS ETF (WCSS) and iShares MSCI World Consumer Discretionary Sector UCITS ETF (WCDS) will be renamed the iShares MSCI World Consumer Staples Sector ESG UCITS ETF and iShares MSCI World Consumer Discretionary Sector ESG UCITS ETF, respectively.
WCSS will start tracking the MSCI World Consumer Staples ESG Reduced Carbon Select 20 35 Capped index, which will see its constituent count fall from 116 to 105.
WCDS, meanwhile, will track the MSCI World Consumer Discretionary ESG Reduced Carbon Select 20 35 Capped index, with its constituent count falling from 163 to 157.
The low carbon sector benchmarks capture large and mid-cap stocks across three developed markets while providing a relative 20% uptick in ESG scoring and 30% reduced greenhouse gas exposure versus parent indices.
The indices also exclude companies involved in controversial weapons, nuclear weapons, civilian firearms, tobacco, thermal coal, oil sands, conventional weapons and companies that are classified as violating United Nations Global Compact principles.
The largest constituent in each benchmark is capped at 35%, with all other companies capped at 20%. These thresholds drop by 10% at each index rebalancing.
BlackRock said WCSS and WCDS will bear portfolio restructuring costs of 0.07% and 0.05%, respectively, but their fees will remain unchanged following the overhaul.
The ETFs will now be categorised as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).
This marks BlackRock’s latest reshuffle of its ETF range under the sustainable disclosure framework after it upgraded the iShares $ Development Bank Bonds UCITS ETF (DDBB) to Article 9 last month.
