UBS J.P. Morgan Global Government ESG Liquid Bond UCITS ETF (USD) A-acc

Issuer: UBS

Asset Class: Fixed Income

TER: 15bps

Trading Currency: GBX

Pays Income: False

Listing Date: 18 Oct 2019

Ticker: EGOV

ISIN: LU1974693662

This fund provides exposure to a diversified portfolio of global government bonds from developed countries, with a key differentiator being its integration of Environmental, Social, and Governance (ESG) criteria. It aims to track an index composed of investment-grade government debt, offering a relatively lower-risk profile typical of sovereign bonds while aligning with sustainability principles. The strategy focuses on bonds that are both liquid and meet specific ESG standards set by the index provider, ensuring that the investment contributes to or benefits from sustainable practices. By selecting debt from countries with strong ESG profiles, the fund offers a way to invest in government debt responsibly.

This investment is suitable for individuals seeking stable, income-generating assets within their portfolio while adhering to responsible investing values. It can serve as a core holding in a fixed-income allocation, providing diversification away from equity market volatility. By focusing on high-quality, investment-grade government bonds from around the world, the fund helps mitigate credit risk. The currency-hedged nature of this specific share class is designed to reduce the impact of exchange rate fluctuations between the underlying bonds' currencies and the investor's home currency, making it an attractive option for those looking to minimize foreign exchange risk.

The fund employs a full physical replication strategy, meaning it purchases and holds the actual government bonds that constitute the benchmark index. This transparent approach ensures the portfolio's performance closely mirrors that of its target index. The ESG screening process, embedded within the index methodology, filters out countries with lower ESG scores and adjusts the weightings of included countries based on their ESG performance. This results in a portfolio of government debt from nations demonstrating stronger commitments to sustainability, governance, and social policies.