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BlackRock and SGX to launch $426M climate action fund for Asia

September 15, 2023

In a significant move towards sustainable investments, BlackRock and the Singapore Exchange (SGX) have launched a sizable Climate Action Fund in Singapore. The fund, iShares MSCI Asia ex-Japan Climate Action ETF, with $426M in assets, is the largest equity ETF (exchange-traded fund) debut in Singapore. The fund's goal? To magnetize investments from across Asia into companies committed to reducing carbon emissions.

  • The iShares MSCI Asia ex-Japan Climate Action ETF is a financial tool tracking a select group of stocks. Essentially, it's a way to make money while following leaders in the green revolution.

  • The fund enjoys support from major entities, like insurance behemoth Prudential, Singapore's state investor Temasek, and digital insurance company Singlife.

  • The fund will closely monitor companies committed to slashing carbon emissions, thus aligning investors' interests with critical climate action goals.

  • Peter Loehnert, BlackRock's head of iShares and index investments in Asia-Pacific, underlined the burgeoning significance of the Asia-Pacific region in energy transition investments, and the enticing prospects for investors focusing on climate-related objectives.

The fund, reportedly charging a nominal annual management fee of 0.18%, will align with the MSCI Asia ex-Japan Climate Action Index. This is the third iShares ETF climate-building fund tracing an MSCI Climate Action Index.

The index offers information on the top 50% of companies in the global industry classification standard (GICS) sector, chosen based on factors including approved science-based targets, climate risk management, and revenue from eco-friendly businesses.

BlackRock closed Q2 this year with a staggering $9.4T in assets under management. Alongside its climate-conscious investments in the US and Asia, the New York-based firm recently partnered with the New Zealand government to inaugurate a $1.22B climate infrastructure fund.

This fund will invest in renewable technologies like solar, wind, green hydrogen, and battery storage in New Zealand.