Industry Updates

Invesco halves fee on active global multi-factor ESG ETF

IQSA still carries a higher fee than Invesco’s recent multi-factor ESG entrants

Jamie Gordon

ESG impact seed funding

Invesco has halved the fee on its actively-managed global multi-factor ESG ETF following the launch of several cheaper active ESG products in recent months.

Effective 3 August, the $131m Invesco Quantitative Strategies ESG Global Equity Multi-Factor UCITS ETF (IQSA) has seen its total expense ratio (TER) reduced by 30 basis points to 0.30%.

Launching in 2019, IQSA is actively managed and screens the global equity market based on ESG criteria. It then scores eligible stocks based on value, quality and momentum metrics and rebalances monthly to capture a subset of stocks that achieve the desired risk profile.

The fee reduction on IQSA follows the arrival of the firm’s two active multi-factor corporate bond products in June, the Invesco EUR Corporate Bond ESG Multi-Factor UCITS ETF (ECMA) and Invesco EUR Corporate Bond ESG Short Duration Multi-Factor UCITS ETF (ECMS), which carry fees of 0.19% and 0.15%, respectively.

Last week, the firm also launched the Invesco Qualitative Strategies Global Equity Low Volatility Low Carbon UCITS ETF (LVLC) with a TER of 0.25%.

While IQSA will still carry a higher fee than Invesco’s newer active ESG arrivals, it undercuts one of the firm’s smart beta ETF, the $113m Invesco Goldman Sachs Equity Factor Index UCITS ETF (EFIW), which launched in 2014 with a TER of 0.55%.

The cut also sees Invesco play its hand in the ESG ETF fee war after Lyxor and Franklin Templeton each slashed fees on two of their ESG products while DWS cut fees on six of their ESG strategies last year.

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