BlackRock has announced Australia’s first Australian Bond Index Fund.
The unlisted fund is benchmarked to the Bloomberg Barclays MSCI SRI ESG-Weighted Australian Aggregate A$100M Index. It will give institutional and retail investors the opportunity to place a diversified investment across the local fixed income market while excluding tobacco, alcohol, gambling, firearms and weapons, nuclear power, adult entertainment, GMOs and fossil fuels from their portfolio.
Craig Vardy, head of fixed income at BlackRock Australia, says Australia has “reached an inflection point in sustainable investing” where ESG (environmental, social and governance) investing can be implemented broadly across most asset classes without foregoing risk-adjusted returns and with fees that are competitive with other funds.
The fund was developed in partnership with VicSuper, a $21 billion superannuation fund that seeded the ESGABI fund with an initial investment.
Analysis of the past five years return history indicates that investors would have experienced a similar return and risk outcome investing in BlackRock’s ESG Index as in the parent index.