Celebrate The Fourth In Style With New Sustainable ETFs
Investing with an eye toward environmental, social and governance (ESG) factors has become an increasingly important topic in recent, particularly among Millennial investors, and issuers of exchange-traded funds are meeting the demand for ESG products.
BlackRock, Inc. (NYSE: BLK)’s iShares unit, the world's largest issuer of exchange-traded funds, added to the ESG ETF fray Thursday with the debuts of the iShares MSCI EM ESG Select ETF (NASDAQ: ESGE) and the iShares MSCI EAFE ESG Select ETF (NASDAQ: ESGD).
The iShares MSCI EAFE ESG Select ETF follows the MSCI EAFE ESG Select Index. Like traditional MSCI EAFE Index funds, the new iShares ETF is heavily allocated to Japan and the U.K., with those countries combining for over 42 percent of ESGD's weight.
France, Switzerland and Germany round out ESGD's top five country weights. Financial services stocks account for over 23 percent of ESGD's weight. Industrials are the new ETF's second-largest sector weight at 14.5 percent followed by healthcare at 12.5 percent. Consumer discretionary and consumer staples each garner weights of more than 11 percent in ESGD.
The iShares MSCI EM ESG Select ETF follows the MSCI EM ESG Select Index. Financial services and technology stocks combine for over 52 percent of that new ETF's weight. ESGE charges 0.45 percent per year, while ESGD charges 0.4 percent.
The two new ESG ETFs from iShares extend a flurry of new product launches from the ETF giant. Last month, iShares introduced a China iShares ETF, a fallen angels bond ETF and a high-yield bond ETF excluding energy issuers. In May, iShares rolled out a lineup of smart beta sector ETFs.
“The launch of ESGD and ESGE further strengthens our suite of sustainable exchange traded funds, broadening the geographic possibilities for investors seeking to access equities through an ESG lens. We are seeing growing demand from investors who are looking to focus on positive ESG factors while seeking global equity market returns,” said BlackRock Managing Director Martin Small in a statement.
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