Invesco has launched Europe’s first sterling corporate bond ETF with an environmental, social and governance (ESG) tilt.
The Invesco GBP Corporate Bond ESG UCITS ETF (IGBE) is listed on the London Stock Exchange (LSE) with a total expense ratio (TER) of 0.10%.
IGBE tracks the Bloomberg Barclays MSCI Sterling Liquid Corporate ESG Weighted Bond index while incorporating MSCI’s ESG research.
To be included in the index, securities must be issued by companies in developed markets and have £350m minimum outstanding.
Any company involved in tobacco, thermal coal, oil sands, civilian firearms or military weapons is excluded from the index.
The weights are subsequently adjusted based upon certain ESG metrics.
The index is rebalanced monthly while the portfolio manager may employ sampling replication techniques.
Paul Syms, head of ETF fixed income product management, EMEA, at Invesco, commented: “The index this ETF follows has been designed to offer a higher ESG score than the broad corporate bond market but with similar sector exposures, credit ratings and risk characteristics.”
Gary Buxton, head of ETFs, EMEA, at Invesco, added: “As we continue building out our range of equity and fixed income ESG products, we are keen to ensure investors have not only a well-considered strategy but also an economical way to express their ethical views.”
This latest launch highlights Invesco's ongoing push in fixed income and ESG ETFs. Last year, the firm unveiled a number of products in these areas including a euro government bond range in September and a core ESG screened suite in June.