L&G ESG USD Corporate Bond UCITS ETF

Issuer: L&G ETFs

Asset Class: Fixed Income

TER: 9bps

Trading Currency: USD

Pays Income: False

Listing Date: 21 Jan 2021

Ticker: USDC

ISIN: IE00BLRPRD67

This investment vehicle offers a targeted way to access the broad market of investment-grade corporate bonds denominated in US dollars, while integrating a robust sustainability framework. It is designed for investors seeking a core fixed-income holding that provides exposure to debt issued by well-established companies primarily from developed markets. By tracking a specific index, the fund offers a diversified portfolio that aims to capture the performance of this significant segment of the global bond market, providing a potential source of regular income and stability.

A key differentiator of this fund is its screening methodology, which aligns with the principles of the Paris Agreement on climate change. The underlying index systematically excludes issuers involved in controversial sectors like thermal coal, oil sands, and controversial weapons, as well as those who violate the UN Global Compact principles. This results in a portfolio with significantly lower carbon intensity and fossil fuel exposure compared to the broader market. This makes it an appealing option for investors who want to mitigate climate-related risks and align their capital with the transition to a more sustainable economy.

Within a diversified portfolio, this fund can serve as a foundational fixed-income component. It combines the traditional benefits of corporate bonds, such as income generation and lower volatility relative to equities, with the forward-looking advantages of an ESG-focused strategy. This dual objective makes it suitable for investors aiming to build a resilient, long-term portfolio that not only seeks financial returns but also contributes to positive environmental outcomes. It provides a straightforward solution for incorporating responsible investing into the defensive portion of an asset allocation.