iShares $ Corp Bond 0-3Yr ESG SRI UCITS ETF GBP HedgedIndex, costs, backtest, listings and taxation

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The Share Class is a share class of a Fund, which aims to achieve a return on your investment, through a combination of capital growth and income on the Fund’s assets, which reflects the return of the Bloomberg MSCI US Corporate 0-3 ESG SRI Index, the Fund's benchmark index ("Index"). The Share Class, via the Fund, is passively managed and aims to invest so far as possible and practicable in the fixed income (FI) securities (such as bonds) that make up the Index and comply with its credit rating requirements. The Index measures the performance of investment grade, fixed-rate, US Dollar denominated corporate bonds that have a remaining time to maturity of no longer than three years and a minimum amount outstanding of $300 million. The Index includes only bonds issued by companies that meet the index provider’s environmental, social and governance (“ESG”) ratings, based on a series of exclusionary and ratings based criteria. Companies are excluded from the Index if they are involved in certain business lines/activities, as outlined in the Index description of the Fund in the Fund’s Prospectus. Companies that are in violation of United Nations Global Compact principles or OECD Guidelines for Multinational Enterprises are also excluded from the Index. Companies that have a ‘Red’ MSCI ESG Controversies score or have an MSCI ESG rating below BBB are also excluded from the Index. The Fund may obtain limited exposure to securities considered not to satisfy the ESG/SRI criteria. The Fund will adopt a best-in-class approach to sustainable investing, this means that it is expected that the Fund will invest in the best issuers from an ESG / socially responsible investment (“SRI”) perspective (based on the ESG or SRI criteria of the Index) within each relevant sector of activities covered by the Index. The portfolio of the Fund is reduced by at least 20% compared to the market for US Dollar denominated investment-grade corporate bonds with a remaining time to maturity of zero to three years. More than 90% of the issuers of securities the Fund invests in, excluding cash and money market funds, are ESG rated or have been analysed for ESG purposes. The Index is market capitalisation weighted. Market capitalisation is the market value of the outstanding bond issuance. If the credit, or ESG ratings of the FI securities are downgraded, the Fund may continue to hold them until they cease to form part of the Index and it is practicable to sell them. The Fund uses optimising techniques to achieve a similar return to the Index. These may include the strategic selection of certain securities that make up the Index and also the use of financial derivative instruments ("FDIs") (i.e. investments the prices of which are based on one or more underlying assets). FDIs may be used for direct investment purposes. The Fund may also engage in short-term secured lending of its investments to certain eligible third parties to generate additional income to off-set the costs of the Fund. Recommendation: This Fund is suitable for medium to long term investment, though the Fund may also be suitable for shorter term exposure to the Index.

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Your shares will be distributing shares (i.e. income will be paid on the shares semi-annually). The Fund’s base currency is US Dollar. Shares for this Share Class are denominated in Sterling. The performance of your shares may be affected by this currency difference. Your shares will be “hedged” with the aim of reducing the effect of exchange rate fluctuations between their denominated currency and the Fund’s underlying portfolio currencies. FDIs, including FX forward contracts, will be used for currency hedging purposes. The hedging strategy may not completely eliminate currency risk and, therefore, may affect the performance of your shares. The shares are listed on one or more stock exchanges and may be traded in currencies other than their base currency. The performance of your shares may be affected by this currency difference. In normal circumstances, only authorised participants (e.g. select financial institutions) may deal in shares (or interests in shares) directly with the Fund. Other investors can deal in shares (or interests in shares) daily through an intermediary on stock exchange (s) on which the shares are traded. Indicative net asset value is published on relevant stock exchanges websites.

SGSU is hedged to GBP; the index the issuer places next to it in its documents is the unhedged, foreign-currency version. Subtracting one from the other does not measure replication quality: it measures the exchange rate. In a year when the currency moves 5%, “the TD” would come out near 5 points — a plausible-looking number, with decimals, and wrong.

Other sites publish that number. We would rather show one figure less than one figure wrong: the TD will return here the day we have the GBP-hedged index series, which the issuer does not publish today.

Still want to know how well this fund tracks its index? Look at the unhedged sister class, SUSU, where fund and index share the same currency: its TD is the right measure of the management, which is the same. Go to the SUSU page →

What tracking difference is and how we compute it →

Countries

Dividends

• XTBzero (up to €100,000 monthly volume, unreachable for a retail plan); fractions available in plans