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ESG Investing / Treasury & Capital Markets
Haitong opens first Asia HY corporate ESG bond ETF
Tie-in with UK-focused fixed-income strategist Tabula targets 9% yield and 2.67-year duration
The Asset 6 Sep 2021

Haitong International Asset Management (HK), a subsidiary of Haitong International Securities Group, has launched the Tabula Haitong Asia ex-Japan HY Corp USD Bond ESG UCITS ETF on the London Stock Exchange.

This exchange-traded fund (ETF) is the world's first Asia, ex-Japan, high-yield (HY) corporate ESG bond ETF, and was jointly developed by Haitong International Asset Management and Tabula Investment Management, an asset manager and ETF provider in UK focused on differentiated fixed-income strategies.

The ETF, which be managed by Haitong International Asset Management, is also Haitong International’s first listed fund in Europe that aims to provide broad exposure to Asia, ex-Japan, USD high-yield bonds while delivering an enhanced liquidity and environmental, social and governance (ESG) profile at an attractive yield of approximately 9.0% and a duration of 2.67 year.

The ETF tracks the iBoxx MSCI ESG USD Asia ex-Japan High Yield Capped Index, a new index developed by Haitong International Asset Management, Tabula and IHS Markit. The index applies a more stringent liquidity filter than its parent index, the iBoxx Asia ex-Japan USD Corporates High Yield Index, by focusing on larger bond issues and issues with a time to maturity of more than a year.

On the ESG side, the index applies strict ESG screening to exclude controversial issuers, uses ESG tilts, overweights issuers with higher ESG ratings or positive ESG momentum, and vice versa. In simulations since December 2018, the index shows improved risk-adjusted returns versus the parent index.

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