Fund giant BlackRock has teamed up with insurance company Midland National and annuity provider RetireOne to offer what they call the first ever environmental, social and governance (ESG) option available within a fixed-index annuity.
In the new offering, New York-based BlackRock will offer an ESG index to Midland’s fixed-index annuity, known as IndexMax ADV. This will be available only on RetireOne’s fee-based annuity platform.
BlackRock’s index is called the “ESG US 5% Index ER.” It seeks exposure to companies with high levels of ESG risk controls in hopes of increasing the fund’s proportion of companies that are focused on lowering their carbon emissions, diversifying their workforces and improving data privacy and security.
“Companies with strong ESG policies are in an ideal position to perform over the long run, so it is imperative to include ESG principles in portfolio design,” said David Stone, founder and CEO of RetireOne, in a press release. “In this low-rate environment, clients of RIAs are seeking the kinds of protections afforded by fixed-index annuities. As demand for socially responsible financial products increases—42% in the last two years, according to United States Forum for Sustainable and Responsible Investment—an ESG index can provide a valuable option to clients.”
Midland is based in West Des Moines, Iowa. RetireOne is based in San Francisco.