91% asset plunge hits BlackRock sustainable emerging market equity fund

What was once the second largest exchange-traded fund investing in sustainable emerging market companies has become a shadow of itself.

In the two days leading up to Christmas Eve, the iShares ESG MSCI EM Leaders ETF (LDEM) lost 91% of its investments, leaving its total assets depleted at around $ 69 million, up from $ 803 million on December 21. . These are the two biggest. -exit day for a developing country ETF this year, according to data compiled by Bloomberg.

According to the data, only one LDEM shareholder had enough shares to account for such a large exit: Ilmarinen, the Helsinki-based pension firm that invested $ 600 million in the fund when it launched in February 2020. .

A spokesperson for Ilmarinen declined to comment. A BlackRock spokesperson confirmed there had been an exit from LDEM, but declined to comment further on the fund.

The coup comes less than two years after the fund was launched with great success and the backing of Finland’s oldest pension company. LDEM tracks an index containing large and mid-capitalization emerging market equities that meet certain environmental, social and governance criteria. The number of outstanding shares of the fund fell to just 1.2 million, the lowest on record.

Ilmarinen also held shares in two similar funds, which buy ESG companies in the United States, according to documents filed as of September 30. Neither the iShares ESG MSCI USA Leaders ETF (SUSL) nor the Xtrackers MSCI USA ESG Leaders Equity ETF (USSG) have suffered massive outflows in recent weeks.

LDEM shares have fallen 3.5% this year to trade at $ 57.68 at the December 28 close, remaining near the low for more than a year. The fund now has $ 75 million under management after adding about $ 6 million this week.

Another BlackRock fund, the iShares ESG Aware MSCI EM ETF (ESGE) remains the largest ETF investing in sustainable companies in emerging markets, with $ 6.2 billion in assets. According to the company, iShares sustainable ETFs and index funds assets under management globally “have doubled year over year thanks to more than 180 sustainable fund solutions.”

-With help from Emily Graffeo.

This article was provided by Bloomberg News.

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Michael J. Birnbaum