BlackRock has expanded its ‘ESG Enhanced’ suite of socially responsible ETFs with the launch of a new fund targeting developed market equities listed in the Asia Pacific region, excluding Japan.

BlackRock offers seven ‘ESG Enhanced’ ETFs providing core sustainable exposures.

The iShares MSCI Pacific ex-Japan ESG Enhanced UCITS ETF has been listed on Deutsche Börse Xetra (Ticker: APJX GY) in euros as well as on SIX Swiss Exchange (PCED SW) and Euronext Amsterdam (PCEL NA) in US dollars.

The fund is linked to the MSCI Pacific ex-Japan ESG Enhanced Focus CTB Index which is constructed from the parent MSCI Pacific ex-Japan Index, a broad market benchmark for large and mid-cap equities performance in Australia, Hong Kong, Singapore, and New Zealand.

The methodology first excludes violators of UN Global Compact principles as well as companies involved with controversial, nuclear, and civilian weapons, tobacco, thermal coal, oil sands, and unconventional oil and gas.

The index then weights the remaining constituents using an optimization process that adheres to the EU’s Climate Transition Benchmark (CTB) requirement regarding emission reductions and the transition to a low-carbon economy. CTB indices are aligned with a trajectory to limit global warming to 1.5ºC above pre-industrial levels by 2050. Specifically, the index delivers at least an immediate 30% carbon intensity reduction versus the parent universe, and a 7% annual decarbonization moving forward.

The optimization process also seeks out secondary goals including maximizing exposure to ESG factors and maintaining a tracking error budget of 0.75% versus the parent universe.

The ETF comes with an expense ratio of 0.20%.

BlackRock offers a further six ETFs linked to MSCI ESG Enhanced Focus CTB Indices which collectively house more than $12.7 billion in assets. The funds provide exposure to global developed, US, European, eurozone, Japanese, and emerging market equities.

iShares MSCI World ESG Enhanced UCITS ETF (EEWD); $2.9bn AUM; 0.20% expense ratio
iShares MSCI USA ESG Enhanced UCITS ETF (EDMU); $5.4bn; 0.07%
iShares MSCI Europe ESG Enhanced UCITS ETF (EEUD); $1.2bn; 0.12%
iShares MSCI EMU ESG Enhanced UCITS ETF (EMUD); $500m; 0.12%
iShares MSCI Japan ESG Enhanced UCITS ETF (EEJD); $600m; 0.15%
iShares MSCI EM ESG Enhanced UCITS ETF (EEDM); $2.1bn; 0.18%

Collectively, the suite offers investors a toolkit for building sustainable portfolios with core regional ETF building blocks at low cost without compromising performance or target tracking error budgets.

All seven ETFs are classified as Article 9 products within the EU’s Sustainable Finance Disclosure Regulation (SFDR).