USA
Nuveen is listing a new ESG screened junk bond ETF in the US, for those wanting ethically filtered high interest rate credit products.
The Nuveen ESG High Yield Corporate Bond ETF (NUHY) will track the Bloomberg Barclays US High Yield Very Liquid Index. The index uses MSCI’s ESG database to screen US dollar denominated junk bonds for social and ethical responsibility compliance.
The ESG criteria are swapped and changed where necessary to ensure NUHY has market-like sector exposures. The fund charges 0.35%.
Analysis – Useless ESG screen
The junk bond ETF market is very crowded and if you’re coming late to the game, which Nuveen is, then you have to do something different if you want to stand out. And offering an ESG screen is indeed a different approach. In my quick survey of ETF.com’s database I couldn’t see any ESG screened junk bond ETFs in the US.
However, does adding an ESG screen to junk bonds funds add any kind of value? Are advisors screaming out for ESG screened junk? “I’d like to buy a junk bond ETF, so that I can take advantage of companies most exploited by credit markets. But it’s important my junk bond fund is ethical.” Has anyone uttered that phrase? I doubt it.
South Korea
Palladium futures
Korea’s ETF market is continuing to live up to its reputation as a casino, with Kookmin Bank listing two new funds that give the performance of palladium futures and their inverse.
While leveraged and inverse products are scorned in English speaking countries, they’re very popular in Asian countries like Hong Kong, Taiwan and South Korea.