ETF Launches: LDEM

April 01, 2020


iShares ESG MSCI EM Leaders ETF (LDEM)
Emerging market exposure with an ESG twist

BlackRock’s iShares unit rolled out another ESG ETF in February. This one is a complement to the $1.9 billion iShares ESG MSCI USA Leaders ETF (SUSL), one of the most notable launches of 2019. The iShares ESG MSCI EM Leaders ETF (LDEM) excludes companies involved in controversial business lines and selects only stocks with the highest environmental, social and governance ratings in the MSCI Emerging Markets Index, using MSCI’s ratings.

LDEM comes with an expense ratio of 0.16% and lists on the Nasdaq stock market.

The ETF’s index represents approximately half of the total market capitalization of each sector in the parent index. The controversial industries that result in companies being excluded from the index include alcohol, tobacco, gambling, nuclear power and weapons, with some subgroups receiving categorical bans and others facing threshold limits, according to the prospectus.

Companies are evaluated and rated relative to their sector peers, with only companies rated “BB” or higher on a scale of “AAA” (best) to “CCC” (worst) included in LDEM’s underlying index, the document says.

There are currently eight other emerging market ETFs implementing ESG strategies, the largest of which is the $2 billion iShares ESG MSCI EM ETF (ESGE).

Source: Data and information as of 2/29/2020.
ETF Filings sidebar covers launches and closures for the month of February 2020.


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