BlackRock launches first global unconstrained ESG total return bond fund

BlackRock has launched its first global unconstrained ESG total return bond fund with the BGF ESG Fixed Income Global Opportunities Fund (ESG FIGO), as the firm continues its commitment to make sustainability the standard for investing.

ESG FIGO brings together the management team of its existing USD9.4 billion fixed income global unconstrained team and its focused fixed income ESG team to deliver diversified risk-adjusted returns across a market cycle, while balancing against specific ESG tilts and outcomes within a myriad of fixed income sectors.  ESG FIGO will also have a EUR base currency to help mitigate hedging costs.  

The fund’s sustainability considerations include:

  • Exclusion of certain industries such as: tobacco, weapons, coal and tar sands.
  • Assessment of company ESG profiles, with a tilt toward higher rated names and away from issuers involved in severe controversies. 
  • Structural allocations to qualifying green, social and sustainable bonds that make sustainable impact. 
  • Allocation to sovereigns, sub-sovereigns, and securitised holdings will be selected with additional sustainability criteria. 
  • Engagement with issuers transitioning their business models toward a lower carbon economy.

Both ESG FIGO and BGF FIGO are managed by Rick Rieder, BlackRock's chief investment officer of global fixed income, along with Bob Miller and Aidan Doyle.  Ashley Schulten, head of responsible investing for global fixed income will join the management team for ESG FIGO.

The funds leverage the full breadth and depth of BlackRock’s global fixed income platform, drawing upon a global network of 200 investors who search for, and implement, bottom-up security selection opportunities based on extensive analysis and local market expertise.

Rieder comments: “The success of BGF FIGO has laid the groundwork for the BGF ESG Fixed Income Global Opportunities fund. ESG FIGO aims to carefully balance ESG considerations while at the same time seeking to deliver attractive and diversified risk-adjusted returns across a market cycle. The launch of our first unconstrained ESG total return bond fund available to clients is a significant milestone in our efforts to offer investors as much choice as possible in how they meet their sustainable investing goals.”