To deliver on their commitment to expanding their sustainable product offerings, on Wednesday, iShares launched the iShares ESG Advanced Investment Grade Corporate Bond ETF (ELQD) and, on November 4, 2021, launched the iShares ESG MSCI USA Min Vol Factor ETF (ESMV). ESMV and ELQD are sustainable versions of two of the firm’s flagship equity factor and fixed income funds.1
Sustainable Investing in Flagship Strategies
“We are proud to further expand our line-up today with ESG factor and fixed income funds. These funds further enable our clients to build strong portfolios customized to their sustainable goals and navigate the transition to a low carbon economy,” said Carolyn Weinberg, global head of product of the iShares and Index Investment business at BlackRock. “We believe sustainable characteristics are consequential to risk and return. Our sustainable ETF platform aims to democratize sustainable investing and provide choice to our clients in their pursuit to invest with a focus on companies who score well in environmental, social, and governance assessments. iShares globally has grown our ETF and index fund product suite from 35 in 2018 to 175 today.”
Building on BlackRock’s heritage as an industry leader of both factor and sustainable investing, ESMV offers a sustainable version of the industry’s largest minimum-volatility ETF, the iShares MSCI USA Min Vol Factor ETF (USMV ).2 ESMV provides exposure to stocks with potentially less risk and more favorable environmental, social, and governance characteristics.
Sustainable investing requires a nuanced approach in fixed income due to a wide spectrum of debt instruments and maturities. ELQD builds on BlackRock’s goal of innovating in the fixed income market by providing investors with investment-grade corporate bond exposure with climate-based screens and other ESG considerations. By forming part of iShares’ existing ESG Advanced suite, the fund offers exposure to issuers with average or above-average ESG ratings relative to their sector peers while employing 14 different index screens designed to remove exposure to business activities such as fossil fuels, civilian firearms, and gambling.3
|Fund Name||Ticker||Index||Expense Ratio|
|iShares ESG MSCI USA Min Vol Factor ETF||ESMV||MSCI USA Minimum Volatility Extended ESG Reduced Carbon Target Index||0.18%|
|iShares ESG Advanced Investment Grade Corporate Bond ETF||iBoxx MSCI ESG Advanced USD Liquid Investment Grade Index||0.18%|
Expanding Leadership Across ESG, Factors and Fixed Income
The launch of these two funds further expands iShares’ factor and fixed income suites to include sustainable versions of flagship products. These launches bring the total number of iShares sustainable ETFs available to investors globally to over 150, representing $149.1 billion in assets under management (AUM).4 iShares sustainable ETFs saw a record $47 billion of net inflows in 2020, and AUM have grown over 80% since the end of 2020, reflecting the growing prevalence of ESG risks and investor appetite for a reallocation of capital toward sustainable solutions.5
This year marks the tenth anniversary of BlackRock’s flagship iShares MSCI USA Min Vol Factor ETF (USMV ), and the firm continues to evolve to meet market conditions and serve as a leading provider of choice for investors around the globe. iShares is committed to transforming sustainable investing by providing investors with sustainable alternatives to help build better risk-adjusted, long-term portfolios. The increasing number of sustainable ETFs, including climate-oriented ETFs, will offer new and convenient ways for all investors to access innovative strategies at a key moment in the transition to a low-carbon economy.
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1 ESMV is a sustainable version of the iShares MSCI USA Min Vol Factor ETF (USMV). ESMV seeks to track the MSCI USA Minimum Volatility Extended ESG Reduced Carbon Target Index and USMV seeks to track the MSCI USA Minimum Volatility (USD) Index. Both indexes share the same parent index, the MSCI USA Index. ESMV’s and USMV’s indexes are similar with the exceptions of the ESG, carbon exposure, and business involvement considerations included in ESMV’s index. ELQD, which seeks to track the iBoxx MSCI ESG Advanced USD Liquid Investment Grade Index, is a sustainable version of the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD). LQD seeks to track the Markit iBoxx USD Liquid Investment Grade Index, which is the parent index of ELQD’s index.
2 BlackRock, as of 11/4/2021. Based on USMV’s AUM of $29.3B.
3 Screens are based on revenue or percentage of revenue thresholds for certain categories (e.g. $500 million or 50%) and categorical exclusions for others (e.g. nuclear weapons).
4 BlackRock, as of 11/5/2021
5 BlackRock with data from Markit and Bloomberg, as of 11/5/2021.