iShares has expanded its suite of socially responsible exchange-traded funds with the launch of the iShares Sustainable MSCI Global Impact ETF (MPCT). The fund targets global companies that enable positive social and environmental change, helping investors align their portfolios with their values.

Martin Small, Managing Director and Head of US iShares.

The ETF tracks the newly constructed MSCI ACWI Sustainable Impact Index. The index comprises companies that get the majority of their revenue from products and services addressing at least one of the world’s major social and environmental challenges, as identified by the United Nations Sustainable Development Goals (SDGs). Some of the impact themes targeted in this index include energy efficiency, sustainable water, sanitation, nutrition, and education. The fund hereby supports companies that may drive positive social change while also maintaining broad exposure to a globally-diversified portfolio of stocks.

Martin Small, Managing Director and Head of US iShares, said in a statement: “The iShares Sustainable MSCI Global Impact ETF provides an easy way for investors to gain exposure to companies that have a record of positive environmental and social impact, and further strengthens our suite of socially responsible ETFs. These ETFs in particular are seeking to meet growing demand from investors who are looking to have a positive impact and seek global equity market returns.”

Securities are weighted based on sustainable impact dollar sales as well as the ratio of free-float adjusted market capitalization of security to total market capitalization of issuer. Sustainable impact dollar sales are computed using the product of the trailing 12-month sales and the cumulative percentage of sales from the sustainable impact categories. Additionally, sector weights are capped at 20% and issuer weights are capped at 4%. The index is rebalanced quarterly coinciding with the review of the parent MSCI ACWI Index.

Jana Haines, Managing Director and Head of Equity Index Products for the Americas for MSCI, said: “The MSCI ACWI Sustainable Impact Index is the industry’s first equity benchmark designed to apply principles of impact investing by targeting public companies whose products and services aim to address major social and environmental challenges. Based on MSCI ESG Sustainable Impact Metrics, a new framework aligned with the Sustainable Development Goals adopted by the United Nations, the index weights securities by companies’ revenue exposure to sustainable impact themes and excludes companies that fail to meet minimum ESG standards. We are pleased that Blackrock is expanding their MSCI-based ETF suite and will be introducing the first sustainable impact ETF to the market.”

Deborah Winshel, Managing Director and Global Head of BlackRock Impact, the firm’s global values-based investment platform, added: “Investor needs are constantly evolving, and BlackRock is focused on creating innovative and scalable solutions to address these changing demands. This new fund arrives at a time when investors – from major global institutions to individual investors – are increasingly looking to achieve their financial goals in a way that also delivers a long-term, positive impact on the world.”

As of 22 April 2016, the fund has 86 holdings and has significant country exposure to the US (40.4%), France (11.8%), Japan (8.1%), Denmark (6.2%) and Switzerland (5.6%).

The fund has a total expense ratio of 0.49%.