iShares MSCI USA ESG Enhanced UCITS ETF GBP Hedged (Dist)

Issuer: iShares

Asset Class: Equity

TER: 10bps

Trading Currency: GBP

Pays Income: False

Listing Date: 12 Jan 2024

Ticker: EDMG

ISIN: IE000LZ4F7J0

This investment vehicle offers a targeted approach for those looking to align their portfolio with environmental, social, and governance (ESG) principles while maintaining core exposure to the U.S. equity market. The strategy is centred on a portfolio of U.S. large and mid-capitalisation companies that demonstrate strong ESG characteristics. The methodology involves an "enhanced" screening process, which not only excludes companies involved in controversial sectors like thermal coal, oil sands, tobacco, and controversial weapons, but also actively seeks to increase the weighting of companies with higher ESG ratings compared to their sector peers. This results in a portfolio with a significantly improved carbon footprint and overall ESG score relative to the broader market.

The fund aims to closely mirror the risk and return characteristics of the parent U.S. equity index, making it a suitable core holding for investors who want to integrate sustainability without significantly altering their market exposure. For investors whose home currency is not the U.S. dollar, this particular share class provides an additional layer of risk management by hedging the currency exposure between the U.S. dollar and the British pound. This feature helps to mitigate the impact of foreign exchange fluctuations on investment returns, providing a more stable performance profile for sterling-based investors seeking sustainable U.S. market participation.