UBS Sustainable Development Bank Bonds UCITS ETF (hedged to GBP) A-dis

Issuer: UBS

Asset Class: Fixed Income

TER: 18bps

Trading Currency: GBX

Pays Income: False

Listing Date: 06 May 2020

Ticker: MDBG

ISIN: LU1852212023

This financial instrument offers a unique opportunity to combine fixed-income stability with positive social and environmental impact. It provides exposure to a portfolio of high-quality bonds issued by Multilateral Development Banks (MDBs), such as the World Bank, the African Development Bank, and others. These institutions play a crucial role in the global financial architecture by providing financing and technical assistance for projects in emerging and developing economies. The primary objective of these projects is to reduce poverty and foster sustainable economic growth, aligning with the UN's Sustainable Development Goals.

From an investment perspective, bonds from MDBs are typically characterized by very high credit ratings, often in the AAA/AA range, due to the strong backing from their member countries, which include the world's largest developed economies. This high credit quality translates into lower default risk compared to many other types of corporate or even some government bonds. This product, therefore, can serve as a core holding in a fixed-income portfolio, offering potential for stable returns and diversification while contributing to global development initiatives.

It is particularly suitable for investors who wish to integrate Environmental, Social, and Governance (ESG) principles into their portfolios without compromising on credit quality. By investing in the debt of these development banks, capital is directly channeled towards projects that address critical global challenges like climate change, infrastructure development, public health, and education. This makes it a compelling choice for those looking to align their financial goals with their values, achieving both a financial return and a measurable social impact.