BlackRock has collaborated with Thomson Reuters to launch an exchange traded fund (ETF) to provide investors with a way to invest in companies across developed and emerging markets that promote diversity and inclusion practices, which have been shown to benefit companies’ long-term performance.*
The iShares Thomson Reuters Inclusion & Diversity UCITS ETF (Ticker: OPEN, the “Fund”) tracks the Thomson Reuters Global Large/Mid Diversity and Inclusion ex. Controversial Weapons Equal Weight Total Return Index (the “Index”), which is related to the Thomson Reuters Diversity & Inclusion Index. The Index transparently and objectively ranks more than 2,000 publicly-traded companies globally, and consists of the top 100 companies with the most diverse and inclusive workplaces, as measured by 24 metrics across four key categories: Diversity, Inclusion, People Development and News & Controversies. The Index embraces a broader spectrum of diversity dimensions and goes further than other indices in this segment which have tended to focus more narrowly on aspects such as gender.
Debra Walton, Managing Director of Customer Proposition, Financial & Risk at Thomson Reuters commented: “We established this Diversity and Inclusion index three years ago in response to the growing demand for data in support of ESG investment mandates. It leverages our rich ESG data and our index calculation capabilities. We are delighted that BlackRock is paving the way in developing the first ETF to track the index. We look forward to bringing this partnership with us into Refinitiv and to working with the industry on similar ESG-based initiatives.”
Brian Deese, Head of Sustainable Investing at BlackRock commented: “The increasing availability of corporate sustainability data, as well as advancement in technology, has made it possible to better measure and understand metrics, such as inclusion and diversity, from an investment perspective. At BlackRock, we are committed to being leaders in using new data and tools that deliver sustainable investment solutions at scale, which help to improve financial outcomes for our clients and accelerate the adoption of sustainable business practices globally.”
Rachel Lord, Head of EMEA at BlackRock said: “We know that diverse teams make better decisions, and this is ultimately good for investors. We are launching this Fund at a time when a spotlight is firmly on companies to show what they are doing to improve diversity of their workforce, and as investors demand new funds to express specific preferences within their portfolios. It is a significant step forward in the evolution of products that harness the power of social change to deliver long-term investment outcomes.”
The Fund complements iShares’ 10-strong UCITS thematic ETF range – which aim to provide exposure to megatrends, or powerful, transformative forces that could change the global economy, business and society – and the 15-strong family of UCITS environmental, social and governance (ESG) ETFs. It carries a total expense ratio of 0.25%.
The Thomson Reuters Financial & Risk business will be known as Refinitiv, following the closing of the strategic partnership transaction between Thomson Reuters and private equity funds managed by Blackstone.
*[Source: McKinsey, “Why Diversity Matters”, Feb 2015].