Green indexing that doesn't cost the earth
As we’ve mentioned before, improvements in the collection, cleansing and standardisation of ESG data mean that index providers can codify ESG objectives into benchmarks with a great degree of precision, rigour and transparency.
Managers of active green bond funds must charge higher fees to cover their research costs and analyst salaries. In contrast, the rules-based nature of index tracking ETFs helps keep costs for investors down. In the case of our green bond ETF range, our chosen index (built with Solactive) selects securities based on an initial starting universe of green bonds independently approved by the CBI.
In other words, our investors still benefit from the research and expertise of the CBI, a leading authority on the green bond market with over 60 employees, without incurring the higher fees they would from an active manager.