SPDR offers a range of fixed income ESG UCITS ETFs that provide investors with access to corporate debt, both investment grade and high yield across the maturity curve. These ETFs follow indices incorporating the SASB materiality map and seek to maximise the ESG score via a positive screening and optimisation approach based on unique R-Factor™ scores from State Street Global Advisors. To learn more, we invite you to explore the resources linked below.
This brochure offers insights into how investors can use SASB exposures in their portfolios, how the indices are constructed, and provides an analysis of how the SASB exposures differ from their parent benchmarks.
Jason Simpson, Senior Fixed Income ETF Strategist and Lucy Brown, Fixed Income Specialist explain how the SASB indices are constructed and look at how the exclusions process works. They also offer use cases for these types of fixed income ESG exposures.
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Bonds generally present less short-term risk and volatility than stocks, but contain interest rate risk (as interest rates raise, bond prices usually fall); issuer default risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.
The returns on a portfolio of securities which exclude companies that do not meet the portfolio's specified ESG criteria may trail the returns on a portfolio of securities which include such companies. A portfolio's ESG criteria may result in the portfolio investing in industry sectors or securities which underperform the market as a whole.
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