BlackRock launches EM Debt funds with ESG tilt

Fund manager BlackRock has launched a range of open-ended emerging market debt funds, which integrate environmental, social, and governance (ESG) factors.

The UCITS funds are actively managed against the JESG EMD benchmarks, which were launched by JP Morgan in collaboration with BlackRock in 2018. Separate funds have been set up for EM bonds, EM local currency bonds, EM corporate bonds, and an EM blended bond fund.

BlackRock head of sustainable investing, Brian Deese, commented: “These funds further demonstrate BlackRock’s commitment to innovative sustainable investment solutions, combining the best of BlackRock’s investing capabilities with insights about how ESG factors can affect long-term risk adjusted return. We are building tools that allow our portfolio managers to analyse relevant sustainability information alongside the traditional financial metrics to inform active investment decisions about where to invest.”

In addition, Giulia Pellegrini, head of EMD sustainable investing and portfolio manager in BlackRock’s emerging market debt team, added: “The gap between ESG leaders and laggards is large in the EM world, and a strong ESG data can provide forward-looking information that captures the underlying deterioration of an issuer’s creditworthiness, sometimes well before standard macro credit metrics.”