Solactive expands its engagement with Wealthsimple and Mackenzie Investments Through the Launch of Green Bond Index as Reference to New ETF
ESG investing has been gaining increased momentum. This focus increased as the entire world watched heads of states’ debates on effective actions against climate change at the UN Climate Change Conference (COP26) in 2021. During the last year, sustainable debt issuance more than doubled, reaching US$ 1.6 trillion, making it one of the fastest-growing segments in investing, according to Bloomberg. For Canadian investors interested in putting their assets in a passive strategy focusing on sustainability criteria, Wealthsimple Inc. (“Wealthsimple”) launched one more exchange-traded fund (ETF), tracking the Solactive Green Bond USD CAD DM CAD Hedged Index. Mackenzie Investments will serve as trustee, manager and portfolio manager of the ETF.
The Solactive Green Bond USD CAD DM Hedged Index provides investors with exposure to USD and CAD currencies in North America and developed markets. Based on Solactive’s existing Green Bond Index family, this customized product offers a focus on liquid Investment Grade bonds with corporate, agency bonds, supranational or sovereign issuers.
The Wealthsimple North American Green Bond Index ETF will, therefore, allow investors to gain core fixed income exposure while having a positive impact on the world by funding projects related to environmental and social issues. The data on bonds held by the ETF will be provided by Solactive and the Climate Bonds Initiative, which will ensure that issuers are in compliance with Green and Social Bond Principles at launch and subsequently on an annual basis to prevent greenwashing.
This is the third ETF Wealthsimple and Solactive have partnered on. In June 2020, the companies listed two SRI ETFs, the Wealthsimple North America Socially Responsible Index ETF (WSRI) and the Wealthsimple Developed Markets ex North America Socially Responsible Index ETF (WSRD).
Timo Pfeiffer, Chief Markets Officer at Solactive, comments: “With regulatory initiatives for sustainable finance and a shift in consumers’ demands, ESG investing is an inevitable trend that is here to stay. We are very proud to work in another engagement with Wealthsimple and Mackenzie, two players at the forefront of ESG, to enable Canadian investors to invest in sustainable companies while at the same time expanding our footprint once more in Canada.”
Ben Reeves, Chief Investment Officer at Wealthsimple, comments: “We view it as our responsibility to help provide the capital needed for the transition to a low carbon economy while getting our clients good investment outcomes. We’re proud to be working alongside partners like Solactive to provide individual investors with the unique opportunity to invest in bonds, through this new ETF, that directly finance social and environmental causes, and give them greater confidence that their investments are going towards impactful projects.