Goldman Sachs Asset Management announced the launch of their new Goldman Sachs Global Green Bond UCITS ETF, an Article 9 fund tracking a bespoke index. Developed in collaboration with Solactive, the index targets investment-grade bonds denominated in G10 currencies.

This launch coincides with the ongoing growth of the green bond market, fueled by corporate and government issuers financing climate transition plans and companies in hard-to-abate sectors investing in decarbonization projects. A recent Moody’s Investor Service report predicts green bond issuance to reach $580 billion in 2024.

“The widening range of issuers includes companies and governments worldwide seeking investment to drive their greenhouse gas reduction plans and mitigate physical climate risks,” said Bram Bos, Global Head of Green, Social & Impact Bonds at Goldman Sachs Asset Management.

The new fund provides exposure to the Solactive Global Green Bond Select Index, developed in partnership with Goldman Sachs’ dedicated Green, Social and Impact Bonds team. This index employs enhanced sustainable investment screening at both the issuer and bond level, aiming to include companies with lower climate risk than comparable passive benchmarks.

Eligible investments encompass treasury, corporate, government-related, and securitized bonds denominated in G10 currencies. The methodology prioritizes bonds funding activities like low-carbon energy, sustainable water management, green buildings, sustainable transportation, and more.

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Goldman Sachs envisions the fund enabling investors to replace portions of their existing global fixed income portfolios with bonds meeting specific sustainability criteria, including controversy exclusion, project and sector exclusions, and analysis of issuers’ climate transition policies.

“The global green bond market offers increasing opportunities for investors seeking to complement their fixed income exposure with dedicated green, social and impact bonds,” said Hilary Lopez, Head of EMEA Third Party Wealth at Goldman Sachs Asset Management. “We are thrilled to launch this innovative product, bringing the expertise of our green bonds team to an ETF format for the first time. We plan to continue expanding our product range to support our clients’ investment and sustainability objectives.“