SPDR Bloomberg SASB US High Yield Corporate ESG UCITS ETF
| Issuer: SPDR |
| Asset Class: Fixed Income |
| TER: 35bps |
| Trading Currency: USD |
| Pays Income: False |
| Listing Date: 09 May 2024 |
| Ticker: SJHY |
| ISIN: IE0004TYCC17 |
The investment product provides targeted exposure to the U.S. high-yield corporate bond market, specifically focusing on securities from issuers that demonstrate strong Environmental, Social, and Governance (ESG) characteristics. The underlying portfolio aims to mirror the performance of a specialized index that selects fixed-rate, taxable corporate bonds with higher yields, which are typically issued by companies with lower credit ratings compared to their investment-grade counterparts. By tracking this index, the fund offers a systematic approach to capturing the potential for enhanced income and capital appreciation inherent in the sub-investment grade debt space, while simultaneously adhering to a sustainability-focused investment mandate.
The integration of ESG criteria is a core component of the investment strategy. The benchmark index utilizes the Sustainability Accounting Standards Board (SASB) framework to assess and score companies on industry-specific sustainability topics. This process results in the inclusion of bonds from issuers that are considered leaders in managing their material ESG risks and opportunities. Furthermore, the methodology includes a negative screening process, excluding companies involved in significant controversies or certain business activities, such as controversial weapons and tobacco production. This dual approach of positive selection and negative exclusion ensures the portfolio is aligned with the values of socially responsible investors without compromising on broad market exposure.
For investors with a higher tolerance for risk, this fund can serve as a strategic allocation to potentially boost the overall yield of a diversified portfolio. It offers a solution for those looking to gain access to the U.S. high-yield market, but who also wish to incorporate principles of sustainable investing. The product provides a transparent, rules-based method for investing in a segment of the bond market known for its higher income potential, while actively tilting towards companies with more robust ESG profiles. It is designed for individuals seeking to balance income generation with responsible investment objectives within their fixed-income holdings.
