BetaShares gives access to bonds of Sustainability Leaders with Solactive Index
ESG investments play a gigantic role in asset management as more providers of active and passive solutions grant simple and bundled access to top ESG players. By that, product issuers offer conscious investors a platform to invest ethically with the additional benefit of endorsing companies for their ESG-compliant practices and involvement in sustainable activities. A new approach to incorporate ESG in an investable product undertakes Australian ETF provider BetaShares, which launched its currency-hedged BetaShares Sustainability Leaders Diversified Bond ETF [GBND] tracking investment-grade Australian and global green bonds, tilting towards substantial allocation of green bonds that on top have been ESG-screened to avoid exposure to companies affiliated with the fossil fuel industry or with controversial business practices.
The BetaShares Sustainability Leaders Diversified Bond ETF tracks the Solactive Australian and Global Select Sustainability Leaders Bond TR Index, which incorporates cohesive ESG screening besides of a minimum of 50% exposure to global green bonds. The ETF allows investors to benefit from the development of “true to label” green bonds certified by the Climate Bond Initiative (CBI), which is an organization that provides an international standard for the eligibility of green bonds. All bonds in the portfolio are secured and rated investment grade. As an extra, the index accounts for a broadly diversified set of bonds, including not only Australian but also global green bonds, while limiting currency risk for Australian domestic investors via currency hedging.
“This index goes beyond pure ESG screening,” says Alexander Weiß, Head of Fixed Income Product Development at Solactive.“While we keep an ESG focus on the Australian market, we complement it by adding global green bonds issues by ESG compliant companies. The same criteria applied for Australian issuers is enforced, ensuring consistency for a broad index composition.”
Timo Pfeiffer, Chief Markets Officer at Solactive comments: ”With this index, we bring an innovative strategy that will allow Australian investors to diversify their bond portfolio with a clear emphasis on ESG. We are proud to continue our partnership with BetaShares, as we are looking forward to collaborating on innovative index-based products with an added value for investors.”
The ETF was listed on the Australian Securities Exchange (ASX) on 3rd of December.