BlackRock and Singapore Exchange launch largest climate action ETF in Asia

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The fund will monitor companies as they advance towards reducing carbon emissions. It is supported by Prudential, one of the region’s most significant asset owners, along with a consortium of investors that includes Temasek and Singlife. Singlife also announced its role as a co-seed investor in BlackRock’s iShares MSCI Asia ex-Japan Climate Action Exchange Traded Fund (ETF), which is listed on the Singapore Exchange (SGX).

BlackRock stated that the ETF symbolizes an evolutionary step in the development of the global low-carbon transition investment ecosystem. It allows investors easy access to leading companies across Asia Pacific (excluding Japan) committed to lowering carbon emissions. The fund is ideal for investors aiming for low-carbon transition objectives as it provides open access to pioneering companies leading the low-carbon transition.

Peter Loehnert, APAC head of iShares and index Investments at BlackRock, highlighted that the Asia Pacific is the largest and fastest-growing region for energy transition investment, offering transformational opportunities for investors with climate-focused objectives. He said that investors worldwide are increasingly choosing iShares ETFs as ideal vehicles to align portfolio allocations and implement low-carbon transition goals.

This new fund is the third iShares ETF climate building fund designed to track MSCI Climate Action Indexes, following launches in the United States and Japan three months ago. With an annual management fee of just 0.18%, the fund will track the MSCI Asia ex-Japan Climate Action Index. This index provides exposure to the top 50% of companies in the global industry classification standard (or GICS) sector, based on factors such as approved science-based targets, management of climate risks, and green business revenue.

Michael Syn, senior managing director and head of equities at SGX Group, believes the listing will mobilize capital and develop solutions to effect real change in addressing climate change. He said that they have been working in partnership with BlackRock and MSCI to create a new global ecosystem of climate-related instruments like this ETF and the climate action derivatives launched earlier this year.

Mr. Don Guo, Prudential’s group chief investment officer, added that as anchor investor of the new fund, it was investing in companies demonstrating transition leadership, consistent with its own aspiration to facilitate a systematic green transformation across all sectors.

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