BlackRock has introduced a new ETF in Europe providing sustainability-minded exposure to eurozone blue-chip companies.
The ETF delivers ESG-enhanced exposure to blue-chip stocks within the eurozone.
The iShares EURO STOXX 50 ESG UCITS ETF (ES50 GY) has been listed on Deutsche Börse Xetra in euros.
The fund is linked to the Euro Stoxx 50 ESG Index which is constructed from the Euro Stoxx 50, a flagship index covering 50 large-cap stocks from 11 eurozone countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain.
The Euro Stoxx 50 is designed to represent eurozone blue-chip companies considered leaders in their respective sectors.
The index methodology first screens the Euro Stoxx 50 to remove violators of UN Global Compact principles, companies embroiled in severe ESG-related controversies, and firms with business activities associated with tobacco, oil sands, shale energy, artic oil and gas, thermal coal, controversial weapons, civilian firearms, and military contracting.
Furthermore, the ten companies with the lowest overall ESG scores are removed and replaced by companies from the broader Euro Stoxx Index that come from the same ICB Supersectors but have superior ESG scores.
Constituents are weighted by float-adjusted market capitalization with cap factors imposed such that the index achieves an overall ESG score that exceeds that of the Euro Stoxx 50 excluding its ten worst ESG scorers.
As of the end of June, French and German stocks dominated with weights of 36.9% and 28.0%, respectively, with the next-largest country exposures being the Netherlands (13.3%), Spain (8.4%), and Italy (7.4%).
The largest sector allocations were technology (16.5% vs 15.9% in the Euro Stoxx 50), banks (14.7% vs. 10.4%), industrial goods & services (11.3% vs. 13.7%), consumer products & services (9.5% vs. 14.8%), and insurance (8.8% vs. 5.9%).
Notable single stock positions included ASML (9.8%), Total Energies (6.2%), L’Oreal (4.9%), Schneider Electric (4.5%), and Allianz (4.1%).
The ETF comes with an expense ratio of 0.10% and is classified as an Article 8 product under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
Income is accumulated within the portfolio.