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ESG Investing is the consideration of environmental, social and governance factors alongside financial factors in the investment decision–making process. See our independently curated list of ETFs to play this theme here.
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The Xtrackers Bloomberg Barclays US Investment Grade Corporate ESG ETF (ESCR) tracks an index of investment-grade debt, but screens the securities based on environmental, social and governance factors, an investing style known by the acronym ESG. ESCR screens issuers based on controversies, or involvement in adult entertainment, tobacco, nuclear power, alcohol, gambling, conventional and controversial weapons, civilian firearms and nuclear weapons. Once those securities are screened out, ESCR readjusts its portfolio to match the sector, maturity and credit weighting of its benchmark. ESCR is priced competitively for the category, though it’s more expensive than the rival iShares ESG USD Corporate Bond ETF (SUSC).
Issuers have rolled out dozens of ESG-style funds in recent years to appeal to younger investors who are concerned about the social impact of their investments. ESG (the strategy, not the ticker) is different from traditional socially-responsible investing, which typically tried to exclude bad actors and industries. Many advisers worried that this came at the expense of diversification and returns. Today’s strategies aim to be more inclusive. Instead of ignoring large swathes of the market, the goal is maintain market-like diversification with a tilt toward the best corporate citizens. It’s worth nothing that there are plenty of skeptics when it comes to ESG investing, and critics say ESG whitewashes a portfolio rather than driving companies to truly change their behavior. Investors who prefer plain-vanilla investment-grade corporate debt ETFs can take a look at the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD).
Note: This fund changed its name, objective and ticker in May 2020. It used to be the Xtrackers Investment Grade Bond - Interest Rate Hedged ETF (IGIH).
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Realtime Rating
The adjacent table gives investors an individual Realtime Rating for ESCR on several different metrics, including liquidity, expenses, performance, volatility, dividend, concentration of holdings in addition to an overall rating. The "A+ Metric Rated ETF" field, available to ETFdb Pro members, shows the ETF in the Corporate Bonds with the highest Metric Realtime Rating for each individual field. To view all of this data, sign up for a free 14-day trial for ETFdb Pro. To view information on how the ETFdb Realtime Ratings work, click here.
Copyright MSCI ESG Research LLC [2018]. All Rights Reserved. MSCI ESG Research LLC’s (“MSCI ESG”) Fund Metrics products (the “Information”) provide environmental, social and governance data with respect to underlying securities within more than 23,000 multi-asset class Mutual Funds and ETFs globally. MSCI ESG is a Registered Investment Adviser under the Investment Advisers Act of 1940. MSCI ESG materials have not been submitted, to nor received approval from, the US SEC or any other regulatory body. None of the information constitutes an offer to buy or sell, or a promotion or recommendation of, any security, financial instrument or product or trading strategy, nor should it be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. None of the Information can be used to determine which securities to buy or sell or when to buy or sell them. The Information is provided “as is” and the user of the Information assumes the entire risk of any use it may make or permit to be made of the Information. All Information is provided solely for your internal use, and may not be reproduced or redisseminated in any form without express prior written permission from MSCI. Neither MSCI ESG nor any of its affiliates or any third party involved in or related to creating any Information makes any express or implied warranties, representations or guarantees, and in no event will MSCI ESG or any such affiliate or third party have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) relating to any Information. More information on MSCI ESG Fund Metrics, provided by MSCI ESG Research LLC, can be found at https://www.msci.com/esg-fund-metrics.
Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use, please see disclaimer.
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