PABD Profile
The iShares Paris-Aligned Climate MSCI World ex USA ETF is designed to provide exposure to large- and mid-cap equities in developed markets outside the United States, with a focus on alignment with climate goals. The fund aims to follow a decarbonization trajectory consistent with the Paris Agreement’s targets by selecting and weighting equities in a manner that reduces exposure to climate-related transition and physical risks. This approach supports the transition towards a low-carbon economy by emphasizing companies that are well-positioned to adapt to or benefit from climate-related changes.
The underlying index for this ETF is meticulously constructed to reflect a portfolio that aligns with Paris Agreement objectives. It excludes U.S. equities and focuses on firms across various sectors in developed international markets. The index methodology incorporates measures to ensure that the portfolio progressively lowers carbon emissions, minimizing exposure to industries or companies that may face significant climate-related challenges. By emphasizing firms that are proactive in their climate strategies, the fund seeks to contribute positively to global climate goals.
Under normal market conditions, the fund invests at least 90% of its total assets in the securities that are included in its benchmark index. This high level of index adherence ensures that the fund’s performance closely mirrors that of the Paris-aligned benchmark, providing investors with a targeted investment aligned with environmental sustainability criteria. The fund’s investment strategy incorporates environmental, social, and governance (ESG) factors to enhance its alignment with long-term climate objectives.
Investors should be aware that while the fund is designed to meet specific climate-related criteria, its focus on Paris-aligned equities may result in sector and geographic exposures that differ from broader global equity indices. The fund provides an option for investors seeking to align their portfolios with global climate initiatives while targeting companies outside the U.S. that are actively working towards reducing carbon footprints and embracing sustainable practices. This strategic focus reflects an increasing demand for investment solutions that integrate climate considerations with financial performance.
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