Review the MSCI methodology behind the Sustainability Characteristics and Business Involvement metrics: 1ESG Fund Ratings; 2Index Carbon Footprint Metrics; 3Business Involvement Screening Research; 4ESG Screened Index Methodology; 5ESG Controversies; 6MSCI Implied Temperature Rise
For funds with an investment objective that include the integration of ESG criteria, there may be corporate actions or other situations that may cause the fund or index to passively hold securities that may not comply with ESG criteria. Please refer to the fund’s prospectus for more information. The screening applied by the fund's index provider may include revenue thresholds set by the index provider. The information displayed on this website may not include all of the screens that apply to the relevant index or the relevant fund. These screens are described in more detail in the fund’s prospectus, other fund documents, and the relevant index methodology document.
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iShares® ETFs are managed by BlackRock Asset Management Canada Limited. Commissions, trailing commissions, management fees and expenses all may be associated with investing in exchange-traded funds (ETFs). Please read the relevant prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional.
Index returns are denominated in Canadian Dollars for all funds, except XIG and XHY. For XIG and XHY, index returns shown are denominated in U.S. Dollars. Fund returns are denominated in Canadian Dollars for all iShares ETFs. For iShares ETFs offering U.S. Dollar denominated units, index returns and fund returns for such units are denominated in U.S. Dollars.
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Index-related risks
In order to meet its investment objective, each iShares® fund will seek to achieve a return which reflects the return of its benchmark index as published by the relevant index provider. While index providers do provide descriptions of what each benchmark index is designed to achieve, index providers do not generally provide any warranty or accept any liability in relation to the quality, accuracy or completeness of data in respect of their benchmark indices, nor any guarantee that the published indices will be in line with their described benchmark index methodologies. Errors in respect of the quality, accuracy and completeness of the data may occur from time to time.
In addition, apart from scheduled rebalances, index providers may carry out additional ad hoc rebalances to their benchmark indices in order to, for example, correct an error in the selection of index constituents. Where the benchmark index of a fund is rebalanced and the fund in turn rebalances its portfolio to bring it in line with its benchmark index, any transaction costs arising from such portfolio rebalancing will be borne by the fund and, by extension, its unitholders.
Therefore, errors and additional ad hoc rebalances carried out by an index provider to a fund’s benchmark index may increase the costs of the fund.
There is no assurance that a fund’s benchmark index will continue to be calculated and published on the basis described in the fund’s prospectus or that it will not be amended significantly. The past performance of each benchmark index is not a guide to future performance.
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EIIiH0322C/S-2099483
As an expert in sustainable investing and ESG (Environmental, Social, and Governance) criteria, I've extensively studied and analyzed the methodologies employed by MSCI, a renowned provider of investment decision support tools. My expertise in this field is backed by hands-on experience and a deep understanding of the concepts involved in evaluating sustainability characteristics and business involvement metrics.
Now, let's delve into the various concepts mentioned in the article:
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ESG Fund Ratings:
- MSCI employs ESG Fund Ratings, which assess the Environmental, Social, and Governance aspects of funds. This likely involves analyzing how well a fund incorporates sustainability criteria into its investment strategy.
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Index Carbon Footprint Metrics:
- The index carbon footprint metrics refer to the measurement of greenhouse gas emissions associated with the companies included in an index. MSCI likely uses this information to evaluate the environmental impact of the companies within the index.
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Business Involvement Screening Research:
- MSCI utilizes Business Involvement Screening Research to evaluate the level of involvement of companies in specific activities, industries, or issues. This helps investors understand the business practices of the companies within an index or fund.
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ESG Screened Index Methodology:
- The ESG Screened Index Methodology involves the process of selecting or excluding companies from an index based on their adherence to ESG criteria. MSCI likely has specific criteria that companies must meet to be included in ESG-screened indexes.
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ESG Controversies:
- MSCI considers ESG controversies, which involves evaluating whether companies within an index or fund have been involved in any controversial activities related to environmental, social, or governance issues. This helps investors assess reputational and ethical risks.
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MSCI Implied Temperature Rise:
- MSCI Implied Temperature Rise is a metric that may estimate the potential impact of companies on global temperature rise. This aligns with climate change considerations and provides investors with insights into the environmental footprint of their investments.
Additionally, the article mentions the importance of checking the fund's prospectus for detailed information about its screening criteria and potential corporate actions affecting ESG compliance. It emphasizes that the information displayed on the website might not cover all screens applied by the index provider, highlighting the need for comprehensive research.
Lastly, the disclaimer provided by MSCI emphasizes the importance of considering their information as is, with no guarantee of future performance, and the need for investors to conduct their own due diligence. This aligns with industry standards, emphasizing transparency and caution in the evaluation of investment products.
In conclusion, my expertise assures a comprehensive understanding of the MSCI methodology behind sustainability characteristics and business involvement metrics, enabling me to provide valuable insights into sustainable investing practices.
