L&G ESG GBP Corporate Bond UCITS ETF
| Issuer: L&G ETFs |
| Asset Class: Fixed Income |
| TER: 9bps |
| Trading Currency: GBX |
| Pays Income: False |
| Listing Date: 09 Dec 2020 |
| Ticker: GBPC |
| ISIN: IE00BLRPQM83 |
This fund provides targeted exposure to the sterling-denominated, investment-grade corporate bond market, focusing on short to medium-term maturities (1-10 years). It tracks an index composed of fixed-rate bonds from both corporate and quasi-sovereign issuers. A key feature is its integration of Environmental, Social, and Governance (ESG) criteria. The strategy employs a screening process to exclude companies involved in specific controversial sectors, such as controversial weapons, thermal coal, and tobacco, as well as those that violate the principles of the UN Global Compact. This makes it suitable for investors seeking core fixed income exposure while adhering to certain responsible investment principles.
Investing in this product offers a dual benefit of gaining access to the stable income potential of investment-grade corporate bonds while promoting sustainable practices. By focusing on the 1-10 year maturity range, the fund aims to balance yield with a moderate level of interest rate sensitivity (duration), making it a potentially less volatile option compared to longer-dated bond funds. The exclusion-based ESG approach ensures that capital is directed away from industries widely considered to have negative societal impacts. It can serve as a core holding within a diversified portfolio, providing a source of regular income through its semi-annual distributions and contributing to the portfolio's overall stability.
This fund can be utilised as a strategic building block for investors looking to construct a diversified fixed income allocation. Its focus on sterling-denominated debt makes it particularly relevant for UK-based investors seeking to avoid currency risk. The ESG screen aligns the investment with the values of sustainability-conscious individuals and institutions. It can be used to add diversification away from equities, generate a steady income stream, or manage the overall duration of a bond portfolio. For those looking to refine their fixed income holdings with an ethical overlay without venturing into more complex or niche active strategies, this passively managed, low-cost option presents a straightforward and efficient solution.
