Largest 10 Socially Responsible Fixed Income ETFs | ETF Trends

Fixed income ETFs are increasingly tapping into socially responsible investing themes. A good example of that trend is the iShares Global Green Bond ETF (NasdaqGM: BGRN), which debuted last November.

The iShares Global Green Bond ETF tries to reflect the performance of the Bloomberg Barclays MSCI Global Green Bond Select (USD Hedged) Index, which is comprised of global investment-grade green bonds issued to fund projects with direct environmental benefits, according to the fund’s prospectus.

Green bonds are fixed income debt securities where the proceeds are exclusively applied to projects or activities that promote climate or other environmental sustainability purposes.

“While people often associate ESG or sustainable investing with stock funds, a similar approach can be used for bond portfolios, too,” said BlackRock in a recent note. “As with stocks, bond issuers can be rated on distinct ESG characteristics and in turn, the bonds from these issuers. Indeed, ESG analysis has become increasingly important in credit ratings themselves. As demand has grown, credit ratings agencies have been exploring ways to incorporate ESG analysis in their ratings, and some have already started doing so.”

BGRN ETF Details

BGRN holds 192 green bonds with an effective duration of 6.92 yeas and a weighted average maturity of 7.92 years. French, German and U.S. green bonds combine for about 41% of the fund’s geographic weight. Due to the fact that governments are often major issuers of green bonds, BGRN’s credit quality is high. About 80% of the fund’s holdings are rated AAA, AA or A.

“Green bonds are an even more targeted approach to investing sustainably and are often known as ‘impact’ investments, since proceeds proactively and directly fund sustainable projects,” according to BlackRock. “These bonds–issued by foreign government agencies, supranational issuers or corporations–are used to fund new and existing projects that promote environmental purposes. Think solar panels or clean transportation.”

BGRN’s primary competitor in the green bond ETF space is the VanEck Vectors Green Bond ETF (NYSEArca: GRNB), the first fixed income exchange traded fund offering exposure to green bond.

GRNB tracks the S&P Green Bond Select Index, which is “comprised of labeled green bonds that are issued to finance environmentally friendly projects, and includes bonds issued by supranational, government, and corporate issuers globally in multiple currencies,” according to VanEck.

This is a list of the largest Fixed Income Socially Responsible ETFs traded in the USA which are currently tagged by ETFdb.

Symbol ETF Name Total Assets ($MM) YTD Avg Volume Previous Closing Price 1-Day Change
AGG iShares Core U.S. Aggregate Bond ETF $59,604.54 2.41% 4,938,274 $108.25 0.18%
BND Vanguard Total Bond Market ETF $37,922.80 2.54% 2,533,467 $80.64 0.17%
BSV Vanguard Short-Term Bond ETF $22,414.00 1.58% 2,340,702 $79.35 0.13%
TIP iShares TIPS Bond ETF $20,751.02 3.01% 1,212,182 $112.81 0.23%
SHV iShares Short Treasury Bond ETF $20,097.92 0.75% 2,336,816 $110.49 0.00%
SHY iShares 1-3 Year Treasury Bond ETF $19,570.32 0.94% 3,346,586 $83.94 0.05%
BNDX Vanguard Total International Bond ETF $16,417.96 2.77% 2,135,843 $55.60 0.05%
IEF iShares 7-10 Year Treasury Bond ETF $13,269.08 1.73% 4,588,100 $105.36 0.18%
TLT iShares 20+ Year Treasury Bond ETF $12,610.06 1.54% 7,921,075 $122.57 0.21%
GOVT iShares U.S. Treasury Bond ETF $9,724.32 1.96% 3,765,110 $25.00 0.12%

* Assets and Average Volume as of 2019-04-23 20:15 UTC

 For more information on the fixed-income markets, visit our bond ETFs category.