UBS launches sustainable bond ETF

Swiss-based UBS Asset Management has launched an exchange-traded fund (ETF) investing in Eurozone corporate bonds screened for sustainability.

The UBS ETF Barclays MSCI Euro Area Liquid Corporates Sustainable ETF was listed on the London Stock Exchange today.

The ETF invests in bonds of the underlying Barclays index and provides exposure to investment grade, euro-denominated securities issued by Eurozone corporate issuers in the financial, industrial and utility sectors.

Companies on the index must have an MSCI environmental and social governance rating of at least BBB. Therefore securities issued by firms whose business does not fall under the category of socially responsible investing (SRI) are excluded.

These include companies that are involved in alcohol, tobacco, gambling, civilian firearms and military weapons.

According to Andrew Walsh, head of UBS ETF in the UK and Ireland, the firm now has $1 billion in SRI assets.

“A recent study by UBS into SRI investing has shown that there is no negative effect on risk and return compared to portfolios that were not screened for sustainability criteria,” said Walsh.

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