Invesco has expanded its ETF offering with the launch of four global ESG tracker funds amid increased investor demand for sector-specific offerings.
The strategies will track the performance of global sectors within the S&P Developed Ex-Korea Large Mid Cap ESG Enhanced Sector indices and are classified as Article 8 under the European Sustainable Finance Disclosure Regulation.
The four funds making up the range are:
- Invesco S&P World Energy ESG UCITS ETF
- Invesco S&P World Financials ESG UCITS ETF
- Invesco S&P World Health Care ESG UCITS ETF
- Invesco S&P World Information Technology ESG UCITS ETF
Each index seeks to enhance its ESG profile and reduce its carbon footprint while minimising country and stock deviations relative to its sector. The funds have an annual charge of 0.18%.
Chris Mellor (pictured), Invesco head of Emea equity ETF product management, said: “In tracking these ESG Enhanced Sector Indices, our new ETFs have the potential to deliver meaningful and measurable improvements above and beyond what would be achieved through exclusions alone.
“The ETFs are also expected to achieve their sustainability objectives while avoiding the risk of having an outsized weight in a small number of stocks. That’s important because, in addition to ESG enhancements, we wanted to ensure our ETFs would be suitable for investors wanting the overall profiles to be similar to standard indices.”
Securities will be excluded from the range based on a variety of factors, including involvement in tobacco, oil or controversial weapons.
The launch adds to Invesco’s wider range of $5.2bn (£4.16bn) assets under management ESG ETFs.
Gary Buxton, head of EMEA ETFs and indexed strategies at Invesco, said: “The strength of flows into ESG strategies over the past few years is partly due to investors wanting to incorporate sustainability throughout their portfolios.
“Beyond core equity and fixed income holdings, we are now seeing many of these investors turn their attention towards more targeted exposures, such as sectors, and quite rightly demanding a similarly robust and thoughtful process for integrating ESG.”
This article first appeared on ESG Clarity’s sister title Portfolio Adviser.