Lyxor has launched three exchange-traded funds (ETFs) designed to provide sustainable exposure to high yield bonds.
The three ETFs – US dollar High Yield, Euro High Yield, and Global High Yield – use Bloomberg Barclays MSCI Sustainable SRI indices, which apply sustainability filters to the bond universe to reduce exposure to controversial and low-ESG-rated issuers.
Bond issuers either classified as a “Producer” of a given controversial product or service, or who derive significant revenue from it, are screened out of the index.
Philippe Baché, head of fixed income at Lyxor ETF, said: “ESG rating in high yield is one of the latest innovations in fixed income indexing.
“We are always looking for ways to provide investors with even more innovative tools to achieve their sustainable goals. By applying an ESG lens to the high yield bond universe, we are able to provide a significant move away from parent indices offering a potentially more conservative risk profile.”
All three ETFs will have a Total Expense Ratio (TER) of 0.25%, making them, according to Lyxor, the lowest-cost ETFs tracking high yield indices with ESG filters.
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