What are the benefits of investing in global corporate bonds with an ESG screen?
Investors now have the unique opportunity to replace their global corporate bond exposure with an ESG equivalent via a UBS ETF.
Thus far in 2020, despite the general risk-off sentiment caused by the coronavirus outbreak, the European Fixed Income ETF market showed substantial net inflows, in contrast to the negative NNM seen year-to-date in equity ETFs. A major proportion of the Fixed Income ETF inflows have been in the corporate bond segment, where we have seen growing interest especially following the extraordinary measures announced by the major central banks. Many investors are turning to credit markets for the potential for better returns over global treasuries which currently offer yields at historical lows
The pandemic has also shone a light on sustainable investing and the importance of conforming to environmental, social and governance (ESG) requirements. More than ever, sustainability trends accelerated by the pandemic are highlighting the need to integrate ESG considerations into investment decisions. This not only means taking a more responsible approach to investing, but also reaping the benefits of bond portfolios with higher credit quality as credit rating quality and ESG rating quality go hand in hand.
Investors now have the opportunity to replace their traditional exposure to global investment grade corporate bonds with an innovative ETF that screens for ESG and liquidity factors so as to track the most liquid and sustainable part of the investment universe.
UBS Asset management has created the UBS ETF (LU) Bloomberg Barclays MSCI Global Liquid Corporates Sustainable UCITS ETF which delivers this key market exposure in an easy to access and cost-efficient wrapper.