New Listing

Invesco adds emerging markets to ESG ETF range

ESEM tracks the MSCI EM ESG Universal Select Business Screens index

Tom Eckett


Invesco has expanded its MSCI Universal Screened ESG ETF range with the launch of an emerging markets strategy.

The Invesco MSCI Emerging Markets ESG Universal Screened UCITS ETF (ESEM) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.19%.

ESEM tracks the MSCI EM ESG Universal Select Business Screens index which offers broad exposure to large and mid-cap stocks across 26 emerging market countries.

The index excludes any company from industries such as controversial, conventional or nuclear weapons, civilian firearms, oil sands, thermal coal, tobacco and recreational cannabis.

Furthermore, any company that has faced severe ESG controversies over the past three years or has a low ESG rating from MSCI is also removed.

The remaining stocks are reweighted by a combination of ESG scores, ESG trend scores and market cap with each stock capped at 5% to reduce concentration risk.

Chris Mellor, head of EMEA ETF equity and commodity product management at Invesco, said: “As risk appetites have been increasing on the back of economic recovery, we are seeing some investors positioning their portfolios in higher growth areas.”

Gary Buxton, head of EMEA ETFs and indexed strategies at Invesco, added: “When we speak to investors about what is most important to them when selecting responsibly invested funds, performance and engagement are normally at the top of their list.

“We vote the shares held by our passive ETFs in line with the largest active holder of those shares within the Invesco group. That combined vote can give us a much bigger voice on key ESG decisions.”

On Monday, the firm launched a high yield bond ESG ETF, the Invesco USD High Yield Corporate Bond ESG UCITS ETF (UHYD), ETF Stream revealed.

This latest launch takes the firm’s MSCI Universal Screened ESG ETF range to eight. The other seven ETFs are:

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