Singapore Exchange(SGX) and BlackRock, the global asset management leader, have jointly introduced an innovative climate action fund named the iShares MSCI Asia ex-Japan Climate Action ETF. Commencing operations on Thursday, this ETF, valued at US$426 million (S$580 million) , represents the largest equity ETF ever introduced in Singapore and is designed to promote sustainable investment practices across Asia.
ETFs mirror the performance of a particular index, which is composed of a collection of underlying assets or stocks.
The fund will oversee companies as they make progress in reducing carbon emissions, receiving support from Prudential, one of the region’s major asset owners, and a group of investors that includes Temasek and Singlife. Singlife also disclosed its participation as a co-seed investor in BlackRock’s iShares MSCI Asia ex-Japan Climate Action Exchange Traded Fund (ETF), listed on the Singapore Exchange (SGX).
BlackRock stated that the ETF signifies a progressive advancement in the global investment ecosystem for the low-carbon transition, offering investors easy access to top-tier companies in the Asia-Pacific (excluding Japan) region dedicated to carbon emissions reduction.
This latest fund marks the third iShares ETF climate-oriented fund created to follow MSCI Climate Action Indexes, which were introduced in the United States and Japan three months ago. With an annual management fee of a mere 0.18%, the fund will mirror the performance of the MSCI Asia ex-Japan Climate Action Index. This index grants access to the top 50% of companies within the global industry classification standard (GICS) sector, considering criteria such as validated science-based objectives, climate risk management, and revenue from sustainable business practices.
Michael Syn, the Senior Managing Director and Head of Equities at SGX Group, envisions that this listing will galvanize capital and foster the creation of effective solutions for addressing climate change. He emphasized that SGX has collaborated closely with BlackRock and MSCI to establish a novel global ecosystem of climate-focused financial instruments, including this ETF and climate action derivatives introduced earlier this year.
(Source: Ven Sreenivasan | The Straits Times | Pollock Mondal | investing.com)
