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Top asset managers Vanguard Group Inc. and BlackRock Inc. on Thursday unveiled new exchange-traded funds excluding oil companies, coal producers and other industries that growing investors want to avoid.
So-called ESG funds use environmental, social or governance criteria to select investments.
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“Customers are constantly bringing up this topic in our conversations,” said Rich Powers, head of ETF Product Management for Vanguard, the largest ફ 6 trillion mutual fund company under management.
Researcher Morningstar Inc. has found that the flow of such funds has reached record levels this year, spending 9 20.9 billion during the month of June, shy of the annual record of 21 21.4 billion for all 2019.
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This demand is partly reflected in the performance of funds, which have topped the list of traditional investment products several times this year. The second-quarter results showed that this was despite the fact that many funds were held back by a strategy of not owning high-performing energy stocks.
Vanguard ESG US Corporate Corporate Bond ETF Bloomberg Barclays MSCI, which offers the company’s first fixed income in the sector, will look for the US Corporate Select Index, excluding oil and gas, alcohol and civilian firearms companies.
The manager previously launched ESG Equity Products, including Vanguard ESG US Stock ETF, now with assets of about 2 2 billion.
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BlackRock, with total assets of 7 7 trillion, will provide three ESG stock funds, which will recreate the S&P index of large, mid-cap and small-cap companies.
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Blackrock said the ETF would look at companies with some level of investment in the thermal coal, oil sand or shale energy sectors.
(Reporting by Ross Kerber; Editing by Richard Chang)
