BlackRock, which manages more than $180bn of assets across environmental, social and governance (ESG) integrated and impact funds globally, is expanding its European sustainable exchange traded fund (ETF) range with the launch of a fund offering exposure to Japanese companies with the highest ESG ratings.
The companies included in the iShares MSCI Japan SRI Ucits ETF (SUJP) have the strongest ESG credentials as determined by index provider, MSCI. Companies are evaluated based on the most pertinent ESG themes specific to their sub-industry, and rated between AAA (highest) and CCC (lowest). Securities are only included in the index if they achieve a grading of A or above.
The fund explicitly excludes companies involved in alcohol, tobacco, gambling, civilian firearms, military weapons, nuclear power, adult entertainment and genetically modified organisms.
The fund is physically-replicating, meaning it buys the underlying securities of the index. It has a total expense ratio of 0.30%.
Tom Fekete, global head of iShares Product at BlackRock, said: “We’re having many more conversations with investors looking for ways to embed a sustainable approach to investment into their portfolios. Whether the investor is a pension fund, insurance company, asset manager or wealth manager, we have built a set of ETFs that provide a values-based, cost efficient way to access different asset classes.
“This fund launch is particularly timely given that investor sentiment towards Japan is strengthening. The combination of Bank of Japan’s commitment to their easing programme, positive corporate earnings helped by the weaker yen, and asset flows turning more positive is triggering some investors to build Japanese exposure into their portfolios.”
Christine Chardonnens, executive director, MSCI Index Products, said: “The MSCI SRI (Socially responsible investing) Indices aim to support investor ESG integration objectives, whether that’s using ESG data to enhance their investment decisions or to align their portfolios with their values. We are pleased that Blackrock has once again selected MSCI to round out their SRI ETF suite.”