Toronto-based Horizons ETFs Management Inc. has launched a fund that provides exposure to global green-labelled bonds.
The Horizons S&P Green Bond Index ETF (HGGB) is Canada’s first ETF focused exclusively on exposure to a portfolio of global green bonds, the firm said Tuesday in a release.
Green bonds raise capital for projects with specific environmental objectives or benefits, and issuances reached a record US$270 billion in 2020, according to the Climate Bonds Initiative, a not-for-profit advocacy organization for a low-carbon economy.
At the end of the first quarter of 2021, assets under management in global green bond mutual funds increased 80% year over year, according to Fitch Ratings.
“Governments, supranational institutions and corporations across the world are looking to fund important environmentally friendly initiatives that allow them to both improve their eco-footprint as well as ensure their operations will be in line with the expanding rigours of environmental regulation,” said Steve Hawkins, CEO of Horizons ETFs, in the release. “HGGB’s global mandate offers access to income from those eco-conscious organizations helping to lead the charge towards a greener future.”
HGGB seeks to replicate the performance of the S&P Green Bond U.S. Dollar Select Index, net of expenses, and also seeks to hedge the U.S. dollar value of its portfolio to the Canadian dollar at all times.
The fund’s management fee is 0.45%.