RBC iShares has introduced four new asset allocation ETFs offering low-cost, one-ticker solutions for investors seeking globally diversified, ESG-guided multi-asset exposure.
Pat Chiefalo, Managing Director, Head of iShares, BlackRock Canada.
Each ETF has listed on the Toronto Stock Exchange and comes seeded with C$2 million.
The funds, which provide access to ‘Conservative Balanced’, ‘Balanced’, ‘Growth’, and ‘Equity’ portfolio strategies, are designed as socially responsible versions of existing products that collectively house over C$900m in AUM.
Similar to the current offering, the new ETFs gain their exposure by investing in other iShares ETFs including equity (Canadian, US, and international developed) and fixed income (Canadian and US government) funds.
The main difference between the two product lines is that the new ETFs include iShares equity ETFs that incorporate environmental, social and governance criteria.
Specifically, the underlying equity ETFs utilize MSCI’s ‘ESG Advanced’ methodology which screens out companies from a wide range of controversial industries, those embroiled in severe ESG-related controversies, as well as those with below-average ESG profiles.
The new ESG-focused asset allocation ETFs are as follows: the iShares ESG Conservative Balanced ETF Portfolio (GCNS CN) targets a 40/60 equity to fixed income long-term allocation; the iShares ESG Balanced ETF Portfolio (GBAL CN) targets a 60/40 equity to fixed income allocation; the iShares ESG Growth ETF Portfolio (GGRO CN) targets a 80/20 equity to fixed income allocation, and the iShares ESG Equity ETF Portfolio (GEQT CN) invests exclusively in equities.
The ETFs are monitored continuously by BlackRock Canada and rebalanced as needed to keep their asset allocations within a 10% deviation from their targets.
Each ETF comes with an expense ratio of 0.18% which includes the cost of investing in the underlying iShares ETFs. This is slightly higher than the regular, non-ESG asset allocation ETFs which have all-in fees of 0.21%.
Distributions are made to investors on a quarterly basis.
Pat Chiefalo, Managing Director, Head of iShares, BlackRock Canada, commented, “Our goal is to help our clients build well-constructed portfolios to help them reach their investment goals. Since launching our iShares Core ETF Portfolios, Canadian investors and advisors have shown tremendous enthusiasm for our one-ticket ETF solutions.
“We’re excited to make sustainability more accessible with the addition of these four ESG-oriented ETFs, to help meet the range of investors’ goals and risk profiles. RBC iShares is committed to enabling investor choice, by broadening our sustainable investing platform to include these new asset allocation products.”
Several other providers offer regular asset allocation ETFs in Canada including Vanguard Canada, Horizons ETFs, and TD Asset Management. RBC iShares is the first to offer dedicated ESG solutions, however.