ESGB
iShares EUR Corp Bond ESG UCITS ETF EUR (Dist)
Published by Radif Partners · Updated
Overview
iShares EUR Corp Bond ESG UCITS ETF EUR (Dist) (ESGB) tracks the Bloomberg MSCI EUR Corporate Liquid Bond Screened index and holds its constituents directly, a physical replication managed by iShares. Dividends are paid out to holders rather than reinvested, so ESGB suits investors seeking regular income. The fund is domiciled in IE, which determines the withholding tax treatment applied to its dividends. Annual charges come to 0.12% of assets, and the fund holds 612M under management. Over five years the fund returned 10.1% a year on average, against 25.0% over three years. It is not eligible for the French PEA, but can be held in a securities account, a UK ISA or a German Depot. Its risk level is rated low. Launched on 2018-10-22, the fund is denominated in EUR and has 8 years of track record. It is a UCITS fund, so it follows the European framework on diversification, liquidity and asset segregation. Because ESGB distributes, every payment is taxable in the year it is received, against the dividend allowance in a general account, while it stays sheltered inside an ISA or a SIPP. Domicile in IE sets the withholding the fund itself suffers on the dividends it receives, a cost absent from the stated fee but present in the return.
Ongoing charges of 0.12% place this fund 42th of 79 comparable funds, whose median is 0.10%. On £10,000 that costs about 12 a year and 120 over ten years at a constant amount, deducted daily and never visible on a statement: it shows up in the gap between the fund's return and its index's. At this level, neither low enough to be an argument nor high enough to be an obstacle, the decision rests elsewhere: on the index tracked, on the distribution policy, and on what your broker charges to buy.
Replication is physical: the fund actually holds the constituents of Bloomberg MSCI EUR Corporate Liquid Bond Screened, which makes its contents verifiable line by line in the issuer's report. Two points deserve attention. Securities lending first, practised by most physical funds to reduce costs: it earns a few hundredths of a point and creates an exposure to the borrower, covered by collateral, with the annual report stating the proportion lent. Rebalancing second: every change in the index's composition forces the fund to buy and sell, and those internal costs are not in the 0.12% headline. That is why two funds at the same price do not track their index with the same fidelity.
The domicile, Ireland, is not an administrative detail: it determines the withholding tax the fund suffers on the dividends it receives, and that loss appears in no fee table. On US equities, the Ireland-US treaty cuts withholding from thirty to fifteen per cent, which on a world index is mechanically worth several tenths of a point a year and explains Irish dominance of this segment. For the holder, the UCITS framework also brings the key information document in their own language, diversification rules, and separation of the fund's assets from the issuer's.
Income is distributed: the fund pays out the dividends it receives, usually one to four times a year. For a holder living off the portfolio that is what is wanted, since the income arrives without selling. For someone still accumulating it is a tax disadvantage in a taxable account: each payment is taxed in the year received, so the amount reinvested is reduced before it starts working again. Reinvesting by hand also costs a dealing commission each time and often leaves cash idle for want of the price of a whole unit. An accumulating class on the same index, where one exists, settles the question.
With 612 million in assets and 8 years of history, this fund has the size and the record that make closure unlikely and the spread narrow. Three checks remain, once a year, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of Bloomberg MSCI EUR Corporate Liquid Bond Screened, which can change its selection or weighting rules without the fund's name moving, in which case what you hold has changed with nothing to announce it.
Bloomberg MSCI EUR Corporate Liquid Bond Screened tracks a bond market, which changes the question: the return on a bond portfolio is largely known in advance, as yield to maturity, while its market value moves with rates and with the risk premium demanded of issuers. Two figures govern this fund, duration and average credit quality, and neither appears in an annual return. On corporate credit, correlation with equities rises precisely when protection was expected.
Over one year the fund shows -11.5% against 10.1% annualised over five years: the recent year lags the long average. Before drawing a conclusion, two possible causes have to be separated, because they have different consequences: a fall in the index tracked, which affects every fund replicating it, or a deterioration specific to the fund, which shows in the tracking difference rather than in the return.
0.12%
612M
612M EURLow
7,287
Physical
Distributing
EUR
IE
Bloomberg MSCI EUR Corporate Liquid Bond Screened
iShares
2018-10-22 (8 years)
Contextual Analysis
Fund Size
With 612M in assets, this is a mid-sized fund, decent liquidity for most investors.
Fee Positioning
A TER of 0.12% is among the lowest on the market, excellent value.
Track Record
Launched in 2018-10-22, this fund has 8 years of history, enough to evaluate consistency.
Risk Profile
Low risk, suitable for cautious investors or short-term goals.
Performance
Returns Summary
| Period | Ann. Return | Cumulative |
|---|---|---|
| 1 Month (est.) | – | -1.0% |
| 3 Months (est.) | – | -3.0% |
| 6 Months (est.) | – | -5.9% |
| YTD (est.) | – | -5.0% |
| 1 Year | -11.5% | -11.5% |
| 3 Years | +25.0% | +95.4% |
| 5 Years | +10.1% | +61.5% |
| Since inception (8y) | +7.9% | +83.1% |
Key Facts
Fund Profile
Themes & Zones
Holdings
Risk
How to Buy This ETF
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About this ETF
The iShares EUR Corp Bond ESG UCITS ETF EUR (Dist) tracks the Bloomberg MSCI EUR Corporate Liquid Bond Screened index. It is managed by iShares using physical replication and follows a distributing distribution policy. The fund is denominated in EUR and domiciled in IE. It has a total expense ratio (TER) of 0.12%.
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Frequently asked questions
What do ESGB's 0.12% charges actually cost?
They are taken from the fund's value continuously and never billed separately: on £1,000 invested that is about £1.20 a year and roughly £12 over ten years at a constant amount. That is the only cost of the fund itself. Your broker's commission and the spread between buying and selling price come on top, and they weigh most on small frequent purchases.
How do you buy ESGB, and on which venue?
Through any broker that lists ISIN IE00BFNM3D14. The same strategy often exists in several share classes with different fees and distribution policies, and what counts is the class you buy rather than the one you read about: check the ISIN, not the name. A limit order avoids paying the spread of a thin order book, particularly outside the trading hours of the underlying markets.
Is ESGB genuinely diversified?
Less so than the number of holdings suggests. Bloomberg MSCI EUR Corporate Liquid Bond Screened weights its constituents by market capitalisation, so the largest companies make up a share of the fund far above their number, and that concentration deepens without any rule changing. The useful check is the weight of the top ten holdings, published monthly by iShares: that figure says how many companies the outcome actually depends on.
What should you re-check on ESGB once a year?
Three things, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of Bloomberg MSCI EUR Corporate Liquid Bond Screened, which can change its selection or weighting rules without the fund's name moving: in that case what you hold has changed with nothing to announce it.
Does ESGB lend out the securities it holds?
Probably in part: most physical funds lend securities to reduce their costs, and iShares publishes the proportion in the annual report. Lending income is worth a few hundredths of a point, shared between the fund and the issuer. The risk is the borrower's, covered by collateral worth more than the amount lent, and it appears in the prospectus rather than in the stated fee.
This ranking is for informational purposes only and does not constitute a recommendation to buy or sell any security. Displayed performance is simulated.