State Street GA Launches First SPDR Corporate Bond ESG ETF for US Investors
State Street Global Advisors announced the launch of the SPDR Bloomberg SASB® Corporate Bond ESG Select ETF (RBND), designed to provide ESG aware investors with access to US dollar-denominated Investment Grade corporate bonds that meet their needs.
The new fixed income index aims to track the Bloomberg SASB US Corporate ESG Ex-Controversies Select Index, developed by Bloomberg in collaboration with the Sustainability Accounting Standards Board (SASB). The index measures the performance of investment grade corporate bonds issued by companies that demonstrate certain sustainability characteristics, while also exhibiting risk and return characteristics that are comparable to those of the Bloomberg Barclays US Corporate Index. It employs exclusions, screening out issuers that are tagged with extreme event controversies, controversial weapons, UNGC violations, civilian firearms, thermal coal extraction, and tobacco companies.
According to SSGA, while investors have been increasingly requesting more choice in their ETF investment options, equity ETFs have dominated the ESG investing market, while choices for ESG-minded fixed income investors have been limited.
SSGA has been moving to address the need for fixed income ESG ETF products. Today’s launch closely follows the introduction last month by SSGA of two Xetra-listed ESG-linked corporate bond ETFs, the SPDR Bloomberg SASB Euro Corporate ESG UCITS ETF (SPPR GY), and the SPDR Bloomberg SASB U.S. Corporate ESG UCITS ETF (SPPU GY).
Noel Archard, global head of SPDR product at State Street Global Advisors, said:
“Investors’ increasing appetite for cost-effective ESG solutions is not exclusive to the equity allocations in their portfolios. With the launch of RBND, SPDR’s first fixed income ESG ETF publicly offered in the US, investors will now be able to better align their core fixed income exposures with their investment goals.”
Archard added,
“Overcoming the challenges created by the lack of standardization in ESG data requires access to quality data from multiple sources. RBND is designed to help investors cut through the noise and integrate material ESG factors at the core of their fixed income portfolios.”