ELQD Profile
The iShares ESG Advanced Investment Grade Corporate Bond ETF seeks to offer investors exposure to a carefully curated selection of high-quality corporate bonds with strong environmental, social, and governance (ESG) credentials. The underlying index for this ETF, known as the Markit iBoxx USD Liquid Investment Grade Index, is subjected to additional ESG-focused screenings. This enhanced index incorporates climate-based and values-based criteria to refine its selection process, ensuring that the component bonds meet stringent ESG standards.
To further align with ESG principles, the fund selects issuers that hold average or above-average ESG ratings compared to their sector peers, as determined by MSCI ESG Research. This approach aims to prioritize companies that demonstrate robust ESG practices and performance, contributing to a more sustainable and responsible investment portfolio. By focusing on investment-grade corporate bonds, the ETF targets high-quality issuers that are more likely to exhibit financial stability and resilience, while also upholding strong ESG standards.
The iShares ESG Advanced Investment Grade Corporate Bond ETF typically allocates at least 90% of its assets to the component securities of the underlying index. This concentration helps ensure that the fund closely tracks the performance of its ESG-focused benchmark. In addition to its primary bond investments, the fund retains the flexibility to allocate up to 10% of its assets to various derivatives, such as futures, options, and swap contracts, as well as cash and cash equivalents. This ancillary allocation can be used for strategic purposes, including liquidity management and risk mitigation.
As a non-diversified fund, the ETF may hold a concentrated position in certain securities or sectors, which can influence its risk and return profile. Investors interested in this ETF should be aware of its focus on ESG criteria, investment-grade corporate bonds, and the associated risks and opportunities. The fund provides a pathway for investors seeking to integrate ESG considerations into their fixed income portfolios, offering a blend of responsible investing with high-quality credit exposure.
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