Investors have consented to BlackRock’s global consumer sector ETFs switching to ESG indices at the second time of asking,
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.
The move follows an extraordinary general meeting (EGM) on 16 November, where BlackRock saw a “successful outcome” to their proposal to change the methodology of the two ETFs.
It comes after the asset manager failed to get shareholder approval for the same motion at an EGM on 11 February 2022.
ETF Stream understood the result of the previous EGM to be “inconclusive” due to the required threshold of investors not being reached.
BlackRock said at the time it would “take action to understand the result”.
Following last week’s EGM result, the two ETFs will switch to tracking new indices and will be categorised Article 8 under the Sustainable Finance Disclosure Regulation (SFDR). Their total expense ratios (TERs) will remain unchanged.
WCSS will now track 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 indices 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 new benchmarks 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.
BlackRock said WCSS and WCDS will bear portfolio restructuring costs of 0.07% and 0.05%, respectively, in an announcement in October.
