BlackRock Launches Four New ESG-Focused Sector ETFs in Europe

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by KnowESG,

BlackRock, Inc.

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With the addition of four new socially responsible global sector ETFs in Europe, BlackRock has expanded its portfolio of socially responsible global sector ETFs.

The new ETFs target companies from the materials, communication services, industrials, and energy sectors while combining numerous environmental, social, and governance (ESG) criteria. They are listed in US dollars on Euronext Amsterdam and the SIX Swiss Exchange.

They are the iShares MSCI World Materials Sector ESG UCITS ETF (WMTS), iShares MSCI World Communication Services Sector ESG UCITS ETF (WCMS), iShares MSCI World Industrials Sector ESG UCITS ETF (WINS), and iShares MSCI World Energy Sector ESG UCITS ETF (WENE).

The funds are linked to MSCI's 'ESG Reduced Carbon Select' sector-specific indices derived from the parent MSCI World Index, which is a benchmark for big and mid-cap corporations in 23 developed markets. According to the Global Industry Classification Standard, stocks are initially classified into distinct sectors (GICS).

Violators of the UN Global Compact principles, including companies involved in serious ESG-related disputes and enterprises with considerable exposure to weapons, cigarettes, thermal coal, and oil sands, are removed using the ESG methodology.

The other constituents are weighted using an optimisation technique that aims to raise each index's weighted average ESG score by 20%, lower its carbon intensity and fossil fuel reserves by 30%, and reduce tracking error relative to their parent universes. The indices are rebalanced quarterly, while the reconstitution takes place every two years.

Featured Article: Top 8 Best ESG Funds for Responsible Investors in 2023

The new ESG-focused global sector ETFs bring BlackRock's total number of ESG-focused global sector ETFs to seven, with the existing three funds following the same ESG investment strategy and targeting equities in the information technology, financials, and health care sectors. The iShares MSCI World Information Technology Sector ESG UCITS ETF (WITS), which has $200 million in assets, is the only fund with significant assets.

Under the EU's Sustainable Finance Disclosure Regulation, each ETF in the suite has an expense ratio of 0.25 per cent and is categorised as an Article 8 product (SFDR).

Source: ETF Strategy

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