BlackRock iShares says its new ESG emerging market bond fund has come about due to the improvements in the quality of data regarding environmental, social and governance issues (ESG) issues.
The iShares JP Morgan ESG $ EM Bond UCITS ETF (EMES) will track the JP Morgan ESG EMBI Global Diversified Index, one of the JESG EMD suite of indices launched by JP Morgan in collaboration with BlackRock in April 2018.
It has a total expense ratio of 0.45%. The fund has been seeded with cash from Netherlands-based insurance company ASR.
Benoit Sorel, head of iShares EMEA product, said that country-level regulation, greater awareness, better data and an evolving demographic of the investor base were all contributory factors behind the further integration of ESG insights into traditional investment approaches.
"The improvement in the quality and coverage of ESG data in emerging markets has enabled investors to identify companies with better ESG performance," he added. "With this fund, we are providing investors the ability to integrate sustainability considerations in emerging market bond portfolios."
The index applies an ESG scoring and screening methodology to tilt toward green bond issues or issuers ranked higher on ESG criteria, and to underweight or remove issuers that rank lower.
BlackRock's iShares' global sustainable ETF range already includes 27 iShares funds. The company said it also complements a suite of four actively-managed ESG emerging market debt funds that were launched in August.
