L&G ESG Emerging Markets Corporate Bond (USD) UCITS ETF

Issuer: L&G ETFs

Asset Class: Fixed Income

TER: 35bps

Trading Currency: USD

Pays Income: False

Listing Date: 03 Jun 2021

Ticker: EMAU

ISIN: IE00BLCGR455

This investment product offers exposure to the corporate debt market of emerging economies, an area that can provide investors with potentially higher yields compared to the corporate bonds of more developed nations. The strategy focuses specifically on US dollar-denominated bonds, which can help to mitigate some of the direct currency volatility often associated with emerging market investments. By investing in corporate issuers, the fund taps into the growth stories of companies within these dynamic regions, offering a different risk-return profile from sovereign debt. This asset class can serve as a powerful diversifier within a broader fixed income allocation, though it carries inherent credit and political risks that warrant careful consideration.

A distinguishing feature of this fund is its integration of Environmental, Social, and Governance (ESG) criteria into its investment process. It follows a custom-screened index that excludes companies with significant business involvement in controversial sectors such as thermal coal, tobacco, controversial weapons, and oil sands. Furthermore, it filters out issuers that are in violation of the United Nations Global Compact principles. This ESG overlay is designed to reduce exposure to companies with poor sustainability profiles, which may face higher regulatory, reputational, or operational risks. For investors looking to align their portfolios with sustainable values, this screening provides a targeted way to access the emerging market corporate bond space.

The product is structured as an accumulating fund, meaning any income generated by the underlying bonds is automatically reinvested back into the fund rather than being paid out to shareholders. This feature makes it particularly suitable for long-term investors focused on capital growth, as it allows for the power of compounding to enhance returns over time. It can be an effective tool for those seeking to build wealth systematically without the need for regular income distributions, while gaining targeted, ESG-conscious exposure to the income and growth potential of emerging market corporations.