SPDR Bloomberg SASB U.S. Corporate ESG UCITS ETF (Acc)

Issuer: SPDR

Asset Class: Fixed Income

TER: 15bps

Trading Currency: USD

Pays Income: False

Listing Date: 27 Oct 2020

Ticker: USCR

ISIN: IE00BLF7VX27

This investment vehicle provides targeted exposure to the U.S. investment-grade corporate bond market, incorporating a robust Environmental, Social, and Governance (ESG) screening methodology. The strategy aims to capture the performance of a broad spectrum of bonds issued by U.S. corporations while adhering to specific values-based criteria. The underlying index systematically excludes issuers involved in controversial business activities such as thermal coal, tobacco, and certain weapons manufacturing. Furthermore, it filters out companies with low proprietary ESG scores, seeking to create a portfolio of debt from more sustainable and well-governed entities. This approach offers a solution for investors who wish to access a core fixed-income asset class while aligning their capital with responsible investment principles.

Within a diversified portfolio, this fund can serve as a core allocation to U.S. fixed income, providing potential for regular income generation and portfolio stability. The focus on investment-grade securities generally entails a lower credit risk profile compared to high-yield or emerging market debt, making it suitable for more conservative investors. The integration of ESG criteria can also be viewed as an additional layer of risk management, as companies with strong sustainability practices may be better positioned to navigate long-term challenges. As an accumulating share class, all interest income generated by the bond portfolio is automatically reinvested back into the fund. This feature is particularly advantageous for investors with a long-term horizon, as it harnesses the power of compounding to potentially enhance overall returns without creating taxable income events.