Industry Updates

Invesco to add China A-Shares stocks to clean energy ETF

The GCLX index will also tighten its ESG metrics

Theo Andrew


Invesco is broadening the scope of its clean energy ETF to include stocks with a primary listing in mainland China.

In a shareholder notice, the US giant said China A-Shares stocks will also be eligible for inclusion in the Invesco Global Clean Energy UCITS ETF (GCLX), provided they are available through the Stock Connect programme.

The $63m ETF, which tracks the Wilderhill New Energy Global Innovation index, already has a 9.1% weighting to China, according to its daily holding list, as at 17 November.

The country’s renewable energy sector has recorded impressive growth in recent years after President Xi Jinping announced that China’s emission target should peak in 2030 and be carbon neutral by 2060.

China stocks have rebounded this week after the government announced a rescue plan for its property sector and a constructive meeting between President Xi Jinping and US President Joe Biden.

As a result, GCLX has returned 10% over the past month, as at 17 November.

ETFs tracking Chinese tech were crushed last month after Xi secured a third five-year term in office.

As well as opening up to Chinese stocks, the Solactive-run index will also amend its ESG metrics.

Effective 30 November, companies deemed to have a severe ESG risk rating will be excluded.

In April, Invesco proposed to upgrade GCLX from Article 8 to Article 9 under the Sustainable Finance Disclosure Regulation (SFDR) following changes to its index.

Last Friday, the asset manager said it has downgraded its entire Article 9 Paris-aligned Benchmark (PAB) climate ETF range to Article 8 under SFDR.

In September, Invesco expanded its thematic range with the launch of two ETFs tracking wind energy and hydrogen.

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