\nBlackRock launched two active sustainable ETFs this Thursday for the transition to a low-carbon economy. The two funds raised more than $1.5 billion, highlighting the increased focus on climate-aware strategies from global institutional investors. The BlackRock U.S. Carbon Transition Readiness ETF (LCTU) and the BlackRock World ex U.S. Carbon Transition Readiness ETF (LCTD) invest in large- and mid-cap companies, tilting toward those companies that BlackRock believes are better positioned to benefit from the transition to a low-carbon economy. The day-one investments into LCTU make it the largest ETF launch ever.\n<\/p>\n
\n\u201cThe energy transition is central to all companies\u2019 growth. Winners and losers will emerge in every sector based on each company\u2019s ability to adapt, innovate and pivot their strategies toward the low-carbon economy,\u201d said Larry Fink, Chairman and CEO of BlackRock<\/b>. \u201cMany of our clients share this conviction and we are helping them be at the forefront of the energy transition through next generation climate analytics and sustainable strategies. We believe that this combination will lead to better outcomes for them and society as a whole.\u201d\n<\/p>\n
\nThe new ETFs seek to outperform their benchmarks over the long term by investing in companies that may be better positioned for the transition to the low-carbon economy. To capitalize on the energy transition, BlackRock\u2019s Sustainable Investing unit developed and managed a proprietary strategy with institutional investors since 2018. The funds leverage a range of structured and unstructured data sources, advanced analytics and research-driven insights across five \u201cpillars\u201d (Fossil Fuels, Clean Technology, Energy Management, Waste Management, and Water Management) to derive a unique low-carbon economy transition readiness score for each company. For the two new funds, BlackRock systematically overweights or underweights individual companies relative to a benchmark based on their low-carbon economy transition readiness score. LCTU is benchmarked to the Russell 1000 Index and LCTD is benchmarked to the MSCI World ex USA Index.\n<\/p>\n
Investors Leading the Transition<\/b><\/p>\n
\nA consortium of global institutions invested in the funds, including the California State Teachers\u2019 Retirement System (CalSTRS), Temasek, Sura Asset Management, Varma Mutual Pension Insurance Company, Profuturo Group, FM Global and RenaissanceRe. More than $1.2 billion flowed into LCTU making it the largest ETF launch of all time. Additionally, approximately $500 million was invested in LCTD, making it one of the largest ETF launches in history.\n<\/p>\n
\n\u201cOur allocation to this strategy furthers CalSTRS\u2019s goal to position our portfolios for the low-carbon transition,\u201d said Chris Ailman, Chief Investment Officer at CalSTRS<\/b>. \u201cIdentifying and supporting opportunities that move CalSTRS and the global economy to a low-carbon future helps ensure we can continue to provide a secure retirement for California\u2019s educators.\u201d\n<\/p>\n
\n\u201cBetter data and analytics have catalyzed climate investing. We are at a pivotal moment in the history of investing and it is now essential to incorporate climate risks and opportunities into asset allocations and portfolio management,\u201d said Timo Sallinen, Head of Listed Securities, Varma Mutual Pension Insurance Company<\/b>.\n<\/p>\n
\n\u201cOur purpose is to obtain the highest possible pensions for our clients, but we also are committed to the conservation of the environment and the fight against the effects of climate change so that we can all live in a more sustainable world. We firmly believe that these vehicles will help us achieve our goals,\u201d said Juan Pablo Noziglia, CIO, Profuturo AFP.<\/b><\/p>\n
Kevin O\u2019Donnell, President & CEO of RenaissanceRe<\/b> said, \u201cAs a global reinsurer, we are uniquely aware of the long-term risks of climate change due to our central role in protecting communities from its impact. Investing in transition-ready companies furthers our leadership in risk management, while advancing the sustainability of our own investment portfolio.\u201d\n<\/p>\n
\n\u201cAt FM Global, we\u2019re committed to advancing global resilience to climate change and natural catastrophe risks. We are also committed to investing in strategies and companies focused on the energy transition, reducing the carbon footprint, and dedicating capital and talent towards developing breakthrough solutions that advance climate resilience. We believe such investments will generate positively differentiated returns, strengthening our long-term stability and profitability. As a commercial property insurer, this strategy aligns well with our efforts to put our capital to work to help increase the resilience of our clients and collective communities,\u201d said Sanjay Chawla, Senior Vice President and Chief Investment Officer, FM Global.<\/b><\/p>\n
Taking Action on Climate Change<\/b><\/p>\n
\nIn a paper published today, \u2018A Sea Change in Global Investing<\/a><\/b>\u2019, BlackRock illuminates how the transition to a low-carbon economy will affect every investor and how successfully navigating the shift will require the nimbleness to embrace new strategies, especially those that consider the threat of disaster, regulations, technological innovations, and shifts in consumer preferences.\n<\/p>\n \n\u201cLeading global institutions recognize that climate risk is investment risk, and they are increasingly using ETFs as transparent and efficient vehicles to integrate this insight into their portfolios,\u201d said Salim Ramji, Global Head of ETF and Index Investments at BlackRock<\/b>. \u201cThese ETFs provide an accessible way for millions of investors to invest in the climate transition for the long term and potentially benefit from this tectonic shift.\u201d\n<\/p>\n \nBlackRock has taken action to advance sustainable analytics and data quality with new tools and partnerships with leading data providers. Last year BlackRock launched Aladdin Climate as the first software application for investors to measure both the physical risk of climate change and the transition risk to a low-carbon economy on portfolios with climate-adjusted security valuations and risk metrics. BlackRock also expanded and strengthened its data offerings with 1,200 new sustainability metrics through partnerships with Sustainalytics, Refinitiv, Rhodium and Clarity AI.\n<\/p>\n \nBlackRock manages a broad array of sustainable investment strategies, including many new sustainable solutions added in the past year across active, index, and alternative asset classes. BlackRock believes there are three approaches to climate-oriented strategies that help investors, which are to Reduce exposure to carbon emissions or fossil fuels, to Prioritize companies based on climate opportunities and risks or to Target key themes or asset classes. BlackRock\u2019s latest carbon transition ETFs fit into the framework, helping investors prioritize investments in companies that may be better positioned to benefit from the transition to a low carbon economy.\n<\/p>\n About BlackRock Carefully consider the Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com<\/a> or www.blackrock.com<\/a>. Read the prospectus carefully before investing. <\/b><\/p>\n Investing involves risk, including possible loss of principal. <\/b><\/p>\n \nA fund\u2019s strategy of investing in securities of companies with low carbon exposure limits the type and number of investment opportunities available to the fund and, as a result, the fund may underperform other funds that do not seek to minimize carbon exposure. A fund\u2019s low carbon exposure investment strategy may result in the fund investing in securities or industry sectors that underperform the market.\n<\/p>\n \nFunds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets or asset classes and the general securities market.\n<\/p>\n \nThe BlackRock funds are actively managed and their characteristics will vary. Actively managed funds do not seek to replicate the performance of a specified index. Actively managed funds may have higher portfolio turnover than index funds.\n<\/p>\n \nInternational investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging\/developing markets and in concentrations of single countries.\n<\/p>\n \nThis material represents an assessment of the market environment as of the date indicated; is subject to change; and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular.\n<\/p>\n \nThe strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective.\n<\/p>\n \nThis material contains general information only and does not take into account an individual’s financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial professional before making an investment decision.\n<\/p>\n \nThe Funds are distributed by BlackRock Investments, LLC (together with its affiliates, \u201cBlackRock\u201d).\n<\/p>\n \nInvestors who invested certain amounts in the Funds on or around the Funds\u2019 launch date (also referred to as \u201canchor investors\u201d), including those investors quoted or listed in this communication, were provided the opportunity by BlackRock to participate, including as a featured speaker, in certain BlackRock-sponsored publicity events relating to the Funds and their investment strategies. Any investor\u2019s opinion may not be representative of other investors in the Funds and is not a guarantee of the future performance or success of the Funds.\n<\/p>\n \nThere is no guarantee, obligation or assurance that any anchor investors will maintain any specific level of investment in the fund, and such anchor investors have the ability to withdraw their investment at any point in time like any other shareholder of a mutual fund or ETF.\n<\/p>\n \n\u00a92021 BlackRock. All rights reserved. BLACKROCK<\/b> is a registered trademark of BlackRock. All other marks are the property of their respective owners.\n<\/p>\n View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20210409005295\/en\/<\/a><\/span><\/p>\n
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<\/b>BlackRock\u2019s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com\/corporate<\/a><\/p>\n<\/p>\n
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