After listing three new equity sustainability exchange traded funds on the New York Stock Exchange earlier this month, Dimensional Fund Advisors has launched a new bond sustainability fund on NYSE, the Dimensional Global Sustainability Fixed Income ETF (NYSE Arca: DFSB). According to the issuer, DFSB offers value-added exposure to global fixed income, targets higher expected returns through systematic duration, credit, and currency of issuance exposure, and applies robust risk management.
The fund seeks to lower carbon footprint exposure by excluding or underweighting issuers with high carbon intensity or potential emissions from reserves. The strategy also applies targeted environmental and social exclusions.
“We believe investing well and incorporating values around sustainability need not be mutually exclusive. We believe we have effectively implemented sustainability strategies with this dual goal in mind for nearly 15 years,” said Isabelle Williams, senior investment strategist at Dimensional.
Williams added: “Overall, our research shows that there is no strong evidence that ESG factors alone are a systematic source of higher returns or lower risks. But ESG considerations can be integrated into diversified portfolios that target higher expected returns.”
In a news release announcing the launch of its three equity sustainability ETFs, Dimensional co-CEO and chief investment officer Gerard O’Reilly said: “Dimensional’s approach to sustainability investing integrates emissions-based exclusions and weighting criteria to reduce carbon footprint exposure both across and within sectors.”
“In just a few years, Dimensional Funds has successfully captured advisor attention with their low-cost, actively managed ETF lineup,” said Todd Rosenbluth, head of research at VettaFi. “Their continued expansion of the product suite to include sustainable strategies provides more tools for advisors to build asset allocation strategies.”
DFSB carries an expense ratio of 0.25%.
More information about Dimensional ETFs can be found at dimensional.com/etfs.
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