Mirae Asset Global Investments announced the launch of the Global X Bloomberg MSCI Asia Ex Japan Green Bond ETF late last week.
The fund, which tracks the Bloomberg MSCI Asia Ex Japan USD Green Bond Index, is the first ETF of its kind tracking green bonds in the Asia ex-Japan region.
“The Global X Bloomberg MSCI Asia Ex Japan Green Bond ETF enables investors to align their portfolios with sustainability objectives and invest in climate action projects that have a positive environmental impact,” said Jung Ho Rhee, chief executive officer of Mirae Asset.
“Green bonds also offer the means for investors to access stable and sustainable income and can be used to add defensive resilience to portfolios.”
The fund provides investors with exposure to investment grade, US dollar-denominated green bonds issued in the Asia ex-Japan region, funding projects with “direct and measurable environmental benefits”.
Green bond issuance in Asia has risen exponentially as governments, government-related entities and corporations are increasingly using these instruments to finance climate action projects.
According to the Climate Bonds Initiative, Asia Pacific is the world’s second biggest issuer of green bonds with a cumulative total of $371.7bn in 2021, and the world’s fastest growing issuer with a year-on-year increase of 129%.
The Bloomberg MSCI Asia Ex Japan USD Green Bond Index includes fixed income instruments that use proceeds for at least one of six environmental categories: alternative energy, energy efficiency, pollution prevention and control, sustainable water, green buildings and climate adaptation.
It is backed by a research-driven methodology which includes an assessment of the bonds’ stated use of proceeds, as well as processes for green project evaluation and selection, and also for the management of proceeds and the commitment to ongoing reporting on the environmental performance of the use of proceeds, according to Mirae Asset.
The fund started trading on the Hong Kong stock exchange on Friday.
It is the South Korean asset manager’s third ETF listed in Hong Kong to be authorised by the Securities and Futures Commission as an ESG fund.
The first two were Global X Hang Seng ESG ETF, and the launch of the China Clean Energy ETF in 2020.
The firm had $205bn in AUM as of end of June, and offers 452 ETFs worldwide, it said in a statement.