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Barclays' BGI unit to develop genocide-free ETF

Thu Nov 12, 2009 10:15am EST

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BOSTON, Nov 12 (Reuters) - Barclays Global Investors (BGI), a leader in the exchange-traded fund industry, said investors' appetite for socially responsible investments is growing and it plans to develop a genocide-free ETF.

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BGI said on Thursday it would rely on a third-party index provider to help weed out companies around the world that are strongly connected with genocide. It did not provide other details about the portfolio.

"We believe there is investor interest in genocide-free investing," Noel Archard, head of BGI's iShares product research and development, said in a statement.

"Creating this new fund could provide investors with an additional reputable socially responsible iShares ETF and address investor concerns on this issue," he added.

BGI, a unit of Barclays (BARC.L) that is being acquired by money manager BlackRock Inc (BLK.N), is planning its new product at a time when investors are demanding more specialized investment options, such as so-called green funds that specialize in alternative energy, and are paying more attention to social issues like genocide.

Several large asset managers, including T Rowe Price Group Inc (TROW.O), Vanguard and TIAA-CREF, have pledged to pay closer attention to investments that might be linked to human rights abuses.

Vanguard has said it is screening its 157 funds to spot companies that may be involved in egregious patterns of human rights abuses that might warrant divestment.

Boston-based special interest group Investors Against Genocide has pushed both Vanguard and its chief rival, Fidelity Investments, to exit investments in companies like PetroChina Co (601857.SS), which has strong links to Sudan.

Eric Cohen, chairman of Investors Against Genocide, called BGI's plan for a genocide-free ETF "an important step forward."

Violence in Sudan's Darfur province has killed an estimated 200,000 people, with 2.5 million driven from their homes since 2003, according to United Nations estimates. (Reporting by Svea Herbst-Bayliss; editing by John Wallace)

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