In response to the growing demand from investors, BlackRock has launched a Green Bond Index fund for those seeking exposure to environmentally positive investments.
The Green Bond Index fund will offer investors exposure to fixed income securities issued to fund projects with direct environmental benefits.
The fund will reflect the total return of the Bloomberg Barclays MSCI Global Green Bond Index.
Ashley Schulten, director, head of climate solutions fixed income, and Darren Wills will manage the fund supported by BlackRock’s Global Fixed Income team.
Green bonds are debt issues with a direct influence to improving the environment. Their earnings are earmarked for low-carbon and climate enhancing projects.
While a minor portion of the global debt universe, green bonds have raised $9.2 million (£7.5 million) in 2016.
The bonds have been issued by an assembly of different groups including sovereigns (Poland and France); sub-sovereigns (Stockholm County Council, New York MTA, City of Oslo, Province of Ontario); Corporates (Apple, EDF, Iberdrola, Toyota); supranationals (World Bank, IFC, European Investment Bank); and commercial Banks (Bank of China, Société Générale, Crédit Agricole CIB).
Schulten said: ‘We see a strong interest in green bonds from clients we service as they seek to participate in climate-friendly and environmentally beneficial investments without making major changes to sector allocation or liquidity risk in their holdings.’