iShares $ Corp Bond 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 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 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 US Dollar denominated, investment grade, fixed-rate bonds issued by companies that have a remaining time to maturity of at least one year and a minimum par amount outstanding of USD300 million, which are part of the Bloomberg US Aggregate Corporate Index (“Parent Index”) based on the index provider’s environmental, social and governance (“ESG”), socially responsible investment (“SRI”) and other 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 are also excluded from the Index based on a ESG controversy score determined by the index provider. 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. The Index is market value weighted, which is the market value of the outstanding bond issuance. 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.

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The price of fixed income securities may be affected by changing interest rates which in turn may affect the value of your investment. Fixed income securities prices move inversely to interest rates. Therefore, the market value of fixed income securities may decrease as interest rates increase. The credit rating of an issuing entity will generally affect the yield that can be earned on fixed income securities; the better the credit rating the smaller the yield. The relationship between the return on your investment, how it is impacted and the period for which you hold your investment is considered below (see “How long should I hold it and can I take my money out early?”).

The depositary of the Fund is The Bank of New York Mellon SA/NV, Dublin Branch. Further information about the Fund can be obtained from the latest annual report and half-yearly reports of the iShares II plc. These documents are available free of charge in English and certain other languages. These can be found, along with other (practical) information, including prices of units, on the iShares website at: www.ishares.com or by calling +49 89427295800 or from your broker or financial adviser.

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 the denominated currency of the shares and the Fund’s underlying portfolio currencies or the Fund’s base currency. 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. Please see the prospectus for further details. The shares are listed and traded on various stock exchanges. In normal circumstances, only authorised participants may buy and sell shares directly with the Fund. Investors who are not authorised participants (e.g. select financial institutions) can generally only buy or sell the shares on the secondary market (e.g. via a broker on a stock exchange) at the then prevailing market price. The value of the shares are related to the value of the underlying assets of the Fund, less costs (see “What are the costs?” below). The prevailing market price at which the shares trade on the secondary market may deviate from the value of the Shares. Indicative net asset value is published on relevant stock exchanges websites.

Intended retail investor:The Fund is intended for retail investors with the ability to bear losses up to the amount invested in the Fund (see “How long should I hold it and can I take my money out early?”).

Insurance benefits:The Fund does not offer any insurance benefits.

SUOP 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, SUOU, where fund and index share the same currency: its TD is the right measure of the management, which is the same. Go to the SUOU page →

What tracking difference is and how we compute it →

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Dividends