BlackRock has unveiled three actively managed asset allocation ETFs that invest exclusively in iShares ETFs with at least 80% of assets invested in ESG-aligned strategies.
BlackRock has introduced the first multi-asset ESG ETFs in Europe.
The funds, which have listed on Xetra, in euros, provide globally diversified multi-asset exposure while addressing environmental, social, and governance sustainability considerations.
The ETFs are constructed according to three predefined risk profiles – Conservative, Moderate, and Growth – with the aim of delivering a total return.
The BlackRock ESG Multi-Asset Conservative Portfolio UCITS ETF (MACV GY) is aimed at more risk-averse investors. It targets annual portfolio volatility between 2-5% through an 80/20 long-term strategic asset allocation to fixed income and equities.
The BlackRock ESG Multi-Asset Moderate Portfolio UCITS ETF (MODR GY) is designed for investors with average risk tolerance. It targets annual portfolio volatility between 5-10% through a long-term strategic asset allocation that is equally divided between fixed income and equities.
The BlackRock ESG Multi-Asset Growth Portfolio UCITS ETF (MAGR GY) will appeal to more risk-tolerant investors. It targets annual portfolio volatility between 10-15% by utilizing a 25/75 long-term split between fixed income and equities.
Eligible ETFs include ‘ESG-Screened’, which simply screen out companies operating in controversial industries; ‘SRI’, which focuses on companies with the highest ESG ratings relative to their peers in each sector; and ‘ESG Enhanced’, which use portfolio optimization to enhance the overall sustainability score.
In terms of geographical exposures, the ETFs cover a broad spread across US, European, emerging market, and Asian equities. On the fixed income side, the ETFs include government, corporate, emerging market, and high-yield bonds denominated in US dollars or euros.
Tactical allocations to the various asset segments are determined by BlackRock’s proprietary fundamental and quantitative models which consider valuations, the relative attractiveness of various factor risk premia, and economic growth metrics. The assumptions are long-term-focused and incorporate macroeconomic analysis including GDP developments, inflation, unemployment rates, and monetary policies.
The ETFs are monitored continuously and rebalanced as needed for tactical purposes as well as to keep the funds in line with their long-term strategic asset allocations.
Each ETF comes with an expense ratio of 0.25% which includes the cost of investing in the underlying iShares ETFs.
Joe Parkin, Head of Banks and Digital Channels in the UK at BlackRock, commented, “This choice of three ready-built portfolios has been designed to help more people invest money towards their long-term financial goals with ease while benefitting from investment expertise across BlackRock. We are doubling down on the characteristics that we know attract people to ETFs, to achieve broad exposure to the markets in an ESG and risk-conscious way.”