Assets in IShares ESG fund drop 91% after biggest investor reduces ownership
Reuters
Published Dec 30, 2021 10:53AM ET
Updated Dec 30, 2021 11:50PM ET
(Reuters) -The iShares ESG MSCI EM Leaders ETF suffered heavy outflows this week, according to public data, leading to a tenfold drop in the assets managed by the exchange-traded fund focused on sustainable emerging-market companies.
Finland's Ilmarinen Mutual Pension Insurance Company owned 13 million shares in the ETF in September, making it the No.1 investor in the fund at the time, Refinitiv data shows.
Senior portfolio manager Juha Venalainen from Ilmarinen told Reuters that Ilmarinen has significantly reduced holdings in the ETF.
"We decided to reduce our exposure to equities in emerging markets. Our view is that risks in that area may have increased," Venalainen said and added the transaction surely decreased capital in the fund.
"We are by no means disappointed with the ETF, the decision was purely allocative," he said.
The number of outstanding shares in the fund, which has underperformed its benchmark and whose top three holdings are Taiwan Semi, Tencent and Alibaba (NYSE:BABA), fell over 91% to 1.2 million as of Monday from 13.9 million as of Dec. 22.
The fund now manages around $74 million worth of net assets, compared to ten times more earlier this month.
BlackRock (NYSE:BLK), the world's biggest money manager which owns iShares, did not immediately respond to a request for comment.
The fund rose 0.9% by 1516 GMT on Thursday. It has lost 3.5% so far this year, while its benchmark, the MSCI EM Extended ESG Leaders 5% Issuer Capped index, is down 0.6%.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.