L&G ESG Emerging Markets Corporate Bond UCITS ETF

Issuer: L&G ETFs

Asset Class: Fixed Income

TER: 35bps

Trading Currency: GBX

Pays Income: False

Listing Date: 21 Jan 2021

Ticker: EMUG

ISIN: IE00BLRPRF81

This fund offers investors targeted exposure to a diversified portfolio of US dollar-denominated corporate bonds issued by entities in emerging market countries. It aims to track the performance of an index that incorporates specific environmental, social, and governance (ESG) criteria. The strategy involves a screening process that excludes issuers based on their involvement in controversial activities, such as thermal coal, tobacco, and certain weapons manufacturing, as well as those that violate the principles of the UN Global Compact. This approach allows investors to access the higher yield potential of emerging market debt while adhering to responsible investing principles.

By focusing on emerging market corporate bonds, the investment provides an opportunity for enhanced income generation and portfolio diversification, as these assets often exhibit different risk-return characteristics compared to developed market debt. The inclusion of an ESG overlay can also potentially mitigate certain long-term risks associated with poor corporate governance or negative environmental practices. This strategy is designed for investors seeking to capture the growth dynamics and attractive yields of emerging economies through a fixed-income lens that prioritizes sustainability.

This product may be suitable for investors looking to augment the yield of their existing fixed-income allocation and who are willing to assume the higher credit and geopolitical risks inherent in emerging markets. The fund's structure, which combines broad market exposure with a values-based screening methodology, makes it a compelling choice for those wishing to align their investment portfolio with sustainability objectives without constructing a custom bond portfolio themselves. It offers a convenient and transparent vehicle for gaining access to a screened universe of emerging market corporate issuers.