iShares Core MSCI Australia ESG Leaders ETF (IESG)

About this Fund

Fund Detail

PDS https://informedinvestor.com.au/view/pds/106502-2023-10-26-02:33.pdf
FUND MANAGER BlackRock Investment Management (Australia)
INVESTMENT STYLE The Fund generally invests in the equity securities that form the Index.
INVESTMENT PROFILE The Fund aims to provide investors with the performance of the Benchmark, before fees and expenses.
BENCHMARK MSCI Australia IMI Custom ESG Leaders Index
FUND SIZE MSCI Australia IMI Custom ESG Leaders Index
NO. OF HOLDINGS Around 100
FEES 0.09% p.a.



Benefits of iShares

iShares ETFs are managed funds listed or quoted on exchanges (including ASX) providing you with the opportunity to gain exposure to a diversified portfolio of assets in a single transaction.

The significant benefits of investing in the Funds include:

  • low cost access to diversified portfolios of international shares;
  • access to market capitalisation weighted, minimum volatility and multiple-factor exposures; and
  • currency hedged options, to seek to minimise the impact of Australian dollar volatility on investor returns.

Other benefits of investing in iShares ETFs generally include:

  • Diversification: In contrast to a direct investment in a single company or bond, an iShares ETF provides, as far as possible and practicable, exposure to all of the securities or instruments within the index that the particular iShares ETF seeks to track.
  • Access global markets: iShares ETFs let you achieve international diversification by investing in overseas equity and bond markets. With iShares ETFs you can gain exposure by asset class, market capitalisation, country and sector.
  • Liquidity and transparency: Each iShares ETF seeks investment results that correspond generally to the performance (before fees and expenses) of a particular index. As a traded security, an iShares ETF enables you to enter and exit your holding on the ASX. You can easily track performance and trade during ASX trading hours (subject to ASX rules).
  • Managing risk: Investing in an iShares ETF can assist you in establishing a portfolio appropriate to your investment needs and risk profile.
  • Lower cost: As each iShares ETF is passively managed and designed to track the performance of a particular index, the expenses of managing an iShares ETF are generally lower compared to other forms of retail managed funds. However, brokerage or adviser fees may still apply when buying or selling units of an iShares ETF.
  • Receipt of income: You will generally receive income from your investment in the form of distributions. Distributions may include dividends, coupons and other income. There may be years in which no distributions are made.
  • Accessibility: iShares ETFs can offer a cost-effective way to gain exposure to a diversified portfolio of securities. They can be less costly than purchasing a large number of individual securities as there are less trading costs and they offer lower thresholds than an investor might otherwise be able to afford.

This product is likely to be appropriate for a consumer seeking capital growth with a medium to high risk/return profile. This product is unlikely to be appropriate for a consumer with a short investment timeframe.



Key Features

About the Fund

The Fund aims to provide investors with the performance of  the MSCI Australia IMI Custom ESG Leaders Index, before fees and expenses. The objective of the Fund is to provide exposure to large, mid and small cap segments of the Australian market with better sustainability credentials relative to their sector peers.

1. Access a broad universe of large, mid & small-cap companies in Australia, with leading ESG practices within their industry

2. Avoid companies engaged in activities that are controversial or have adverse effects on climate

3. Use at the core of your portfolio for your essential domestic allocations


How we invest your money

The Fund seeksto achieve its objective by tracking the performance of the MSCI Australia IMI Custom ESG Leaders Index (referred to in this section 9 of the PDS as the Index).  

We will generally implement a full replication investment strategy to track the performance of the Index as risk relative to the Index is minimised. Our full‐replication approach normally aims to purchase every security in the Index, while considering transaction costs. However, where full replication is not possible, due to liquidity and transaction cost considerations, an optimisation investment strategy may be used.  

Optimisation is an indexing strategy that involves investing in a representative sample of securities that collectively has an investment profile similar to the Index. The securities selected are expected to have, in the aggregate, investment characteristics (based on factors such as market capitalisation and industry weightings), fundamental characteristics (such as return variability and yield) and liquidity measures, similar to those of the Index. Therefore, the Fund may or may not hold all of the securities in the Index and the weighting of the securities held by the Fund may differ to the weighting of securities in the Index.

About the Index  

The Index is a free float‐adjusted market capitalisation weighted index that aims to reflect the performance characteristics of a subset of equity securities within the MSCI Australia IMI Index (referred to in this section 9 of the PDS as the Parent Index) that have high Environmental, Social and Governance (ESG) ratings  relative to their sector peers. The Parent Index is designed measure the performance of the large, mid and small cap segments of the Australia market. The Index aims to target sector weights that reflect the relative sector weights of the Parent Index to limit the systematic risk introduced by the ESG selection process. Overall, the Index targets coverage of 50% of the Parent index.

Once the eligible universe has been confirmed, for each sector, securities in the universe are ranked based on ESG rating, ESG trend, current index membership, industry adjusted ESG Scores and finally decreasing free‐float market capitalisation. For each sector, eligible securities are then selected from the ranked universe until the target 50% coverage by cumulative free float‐adjusted market capitalization is reached. In order to avoid over concentration in any one security, constituents in the Index are also capped at the maximum of 10% or 2.5% + the Parent Index weight.