BlackRock Unveils New Reduced Carbon Utilities ETF in Europe

BlackRock Inc. (BLK), a leading global asset manager with 468 ETFs across the U.S. markets accounting for over $3 trillion in assets, has extended its range of sector ETFs with the launch of a global advanced utilities strategy.

The iShares MSCI World Utilities Sector Advanced UCITS ETF (WUTS) debuts on Euronext Amsterdam with a total expense ratio (TER) of 0.18%. 

WUTS is available in the U.K., Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Spain, Sweden and Switzerland.

What's Behind WUTS?

WUTS tracks the MSCI World Utilities Advanced Select 20 35 Capped index, which offers exposure to 51 utilities stocks across 23 developed markets. According to the index fact sheet, "The index is designed to support investors seeking to increase exposure to positive environmental, social and governance (ESG) factors."

The index increases exposure to “positive” ESG factors by 20% and reduces carbon-equivalent emissions and fossil fuel reserve risks by 30% compared to the parent index.

It also caps the combined weight of securities from the largest company at 35% and from all other companies at 20%, with a 10% buffer applied at each rebalancing.

WUTS Performance Metrics

WUTS's underlying index has underperformed the MSCI World Utilities index by 1.5% over the past 10 years.

Last year, the MSCI World Utilities Advanced Select 20 35 Capped index gained 4.4% versus a 13% gain in the MSCI World Utilities index, according to its fact sheet. In 2023, its 3.6% return outperformed the 0.3% gain of its parent index, though it underperformed in 2022 with a loss of 13.1% versus a loss of 4.7% for the MSCI World Utilities index.

Last month, BlackRock unveiled a 3% capped weighted S&P 500 strategy, which is composed of S&P 500 companies with each capped at a maximum weight of 3% at each quarterly rebalancing.

This article was originally published at etf.com sister publication ETF Stream.