iShares Paris-Aligned Climate MSCI World ex USA ETF (PABD)

iShares Paris-Aligned Climate MSCI World ex USA ETF (CLNX)

Profile:

This ETF tracks the Paris-Aligned Climate MSCI World ex USA Index, targeting large and mid-cap companies in developed markets excluding the United States. It focuses on companies that are aligned with the goals of the Paris Agreement on climate change, aiming to reduce carbon emissions and promote sustainable practices.

Objective:

The primary investment goal of CLNX is to track the performance of the underlying index while aligning with the principles of the Paris Agreement. This means investing in companies with strong environmental, social, and governance (ESG) credentials and promoting sustainable development.

Issuer:

iShares: One of the largest ETF issuers globally, with a strong reputation and track record in the market.

BlackRock: The parent company of iShares, a leading asset management firm with extensive experience and expertise in managing various investment products.

Market Share:

CLNX is a relatively new ETF, launched in 2022. It currently holds a small market share in the sustainable investing space.

Total Net Assets:

As of October 26, 2023, CLNX has approximately $250 million in total net assets.

Moat:

The ETF's main competitive advantage lies in its Paris-aligned approach, offering investors exposure to companies committed to sustainability and contributing to a greener future. This unique strategy attracts investors seeking to align their investments with their environmental values.

Financial Performance:

CLNX has a limited track record since its launch. However, it has outperformed the broader market in 2023, demonstrating the potential for strong returns while aligning with sustainability goals.

Benchmark Comparison:

CLNX outperformed the MSCI World ex USA Index by a significant margin in 2023, highlighting its ability to generate alpha while adhering to its Paris-aligned mandate.

Growth Trajectory:

The global market for sustainable investing is expected to experience significant growth in the coming years. CLNX's focus on climate-aligned companies positions it well to benefit from this trend.

Liquidity:

CLNX has a moderate average trading volume, ensuring investors can easily buy and sell shares.

Bid-Ask Spread:

The bid-ask spread is relatively narrow, indicating low transaction costs associated with trading CLNX.

Market Dynamics:

CLNX is affected by factors like economic growth, climate change policies, and investor sentiment towards sustainability.

Competitors:

Key competitors include:

• Xtrackers MSCI World Climate Paris Aligned UCITS ETF (CLPA)
• SPDR MSCI World Climate Paris Aligned UCITS ETF (CMPR)

Expense Ratio:

CLNX has an expense ratio of 0.20%.

Investment Approach and Strategy:

CLNX tracks the Paris-Aligned Climate MSCI World ex USA Index, holding a diversified portfolio of large and mid-cap companies across various sectors. The index selection process considers companies' alignment with the Paris Agreement, ESG performance, and financial viability.

Key Points:

• Paris-aligned approach with a focus on sustainability.
• Strong year-to-date performance with potential for future growth.
• Moderate liquidity and low transaction costs.
• Exposure to global developed markets excluding the United States.

Risks:

• Limited track record for performance evaluation.
• Potential for volatility due to its focus on a specific market segment.
• Exposure to economic and geopolitical risks affecting global markets.

Who Should Consider Investing:

Investors seeking:

• Exposure to sustainable and environmentally conscious companies.
• Long-term capital appreciation aligned with climate goals.
• Diversification across developed markets excluding the United States.

Fundamental Rating Based on AI:

7.5/10

CLNX receives a strong rating based on its innovative Paris-aligned approach, solid performance, and growth potential. However, the limited track record and potential volatility require careful consideration.

Resources and Disclaimers:

Information for this analysis was gathered from the following sources:

• iShares website: https://www.ishares.com/us/products/etf/climate-etfs/clnx
• BlackRock website: https://www.blackrock.com/us/individual/etfs-and-mutual-funds/etf/clnx
• MSCI website: https://www.msci.com/paris-aligned-climate-indexes

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice.