BetaShares has launched an ETF that provides access to a diversified portfolio of global and Australian bonds that meet strict responsible investment criteria.
Its Sustainability Leaders Diversified Bond ETF – Currency Hedged (GBND) aims to track an index that utilises strict environmental, social and governance (ESG) screening processes to select eligible bonds, according to a statement.
Bond issuers are excluded if they have material exposure to the fossil fuel industry or are engaged in other activities that carry significant ESG risks, including gambling, tobacco and a lack of gender diversity at board level.
Fifty per cent of the portfolio’s value will be Australian dollar-denominated, with the remainder allocated to bonds denominated in euro or US dollar, with the foreign currency exposure of the global bonds hedged back to the Australian dollar.
“Exposure to fixed income offers important portfolio diversification and defensive benefits,” said BetaShares chief executive Alex Vynokur.
“The launch of GBND provides a solution for investors and advisers who are seeking the benefits of fixed income but want to do so with a focus on sustainability.”
In addition, BetaShares said at least 50 per cent of GBND’s portfolio will be made up of independently verified ‘green bonds’, i.e. bonds issued to directly fund projects that have positive environmental and/or climate benefits, as certified by the Climate Bonds Initiative.
“With interpretations of responsible investing varying widely, we’re finding investors want to know that their money is being invested in a way that aligns with their values, rather than ethical in name alone,” Mr Vynokur said.
“The strict screening process each bond must pass enables GBND to offer ‘true to label’ ethical investment exposure.”
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