New Listing

Invesco enters global equity price war with Europe’s cheapest All-World ETF

TER 0.15%

Theo Andrew

Gary Buxton headshot

Invesco has launched Europe’s cheapest ETF offering exposure to developed and emerging markets, undercutting its rivals State Street Global Advisors (SSGA) and BlackRock, ETF Stream can reveal.

The Invesco FTSE All-World UCITS ETF (FWRA) is listed on the Six Swiss Exchange, London Stock Exchange and Borsa Italiana with a total expense ratio (TER) of 0.15%.

FWRA hits the market two basis points (bps) cheaper than SSGA’s SPDR MSCI ACWI IMI UCITS ETF (SPYI), which slashed its fees from 0.40% to 0.17% in March this year, undercutting BlackRock’s $6.4bn iShares MSCI ACWI UCITS ETF (SSAC), priced at 0.20%.

Invesco will be looking to gain market share in what has emerged as a popular asset class among investors this year, with global equity ETFs attracting $13bn new assets in the first five months of 2023, 43% of all equity ETFs in Europe.

The ETF will track the FTSE All-World index, offering exposure to 4,000 large and mid-cap companies across 49 developed and emerging markets.

According to Invesco, FWRA can keep its TER lower by using a sampling strategy, which incorporates quantitative analysis to select securities using factors such as country weights, industry sector weights and liquidity.

This means it will hold a smaller number of constituents that are in the index while replicating its performance as closely as possible.

Gary Buxton, head of EMEA ETFs and indexed strategies at Invesco, said: “The idea for our new ETF is to provide every investor the opportunity for a well-diversified portfolio, with one simple ETF delivering immediate exposure to the world’s equity markets at a low cost.”

Chris Mellor, head of EMEA equity ETF product management at Invesco, added: “We believe our new ETF should be suitable for investors wanting a simple, stand-alone global equity product that doesn’t require them to really do anything else after they’ve invested.

“Alternatively, the ETF could be just as appealing to investors wanting a core base from which they can further diversify their portfolios.

“They may decide to build on this base over time by adding other ETFs, for example, ones investing in bonds or in specific types of companies in which they may be interested.”

It is the latest launch by the US asset manager since it unveiled the Invesco EUR Government and Related Green Transition UCITS ETF (EGVD) in April.

Earlier that month, it unveiled a range of four ESG ETFs offering exposure to global energy, financials, healthcare and tech sectors.

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