New Listing

Invesco unveils four global sector ESG ETFs

The ETFs track a new suite of SPDJI World Ex-Korea sector indices

Jamie Gordon

Gary Buxton headshot

Invesco has launched a range of ESG ETFs offering exposure to global energy, financials, healthcare and tech sectors.

The four ETFs are listed on the London Stock Exchange, Deutsche Boerse, Euronext Milan and SIX Swiss Exchange with a total expense ratio (TER) of 0.18%.

The ETFs are:

  • Invesco S&P World Energy ESG UCITS ETF (WDEE)

  • Invesco S&P World Financials ESG UCITS ETF (WDFE)

  • Invesco S&P World Health Care ESG UCITS ETF (WHCE)

  • Invesco S&P World Information Technology ESG UCITS ETF (WDTE)

The four ETFs track benchmarks from the newly-created S&P Developed Ex-Korea LargeMidCap ESG Enhanced Sector index suite.

The indices aim to enhance the ESG profile and reduce the carbon footprint of their underlying exposures by excluding companies involved in tobacco, controversial weapons, oil sands, small arms, military contracting and thermal coal, or those non-compliant with UN Global Compact principles.

Companies are also excluded if they fall within the lowest 20% of stocks on S&P Dow Jones Indices (SPDJI) ESG Score or if they are among the 10% of most carbon intensive companies in their respective sector.

Remaining securities are weighted so the basket would have an equivalent 25% SPDJI ESG Score uplift and a 30% carbon intensity reduction versus the parent index.

Gary Buxton (pictured), head of EMEA ETFs and indexed strategies at Invesco, commented: “The strength of flows into ESG strategies over the past few years is partly due to investors wanting to incorporate sustainability throughout their portfolios.

“Beyond core equity and fixed income holdings, we are now seeing many of these investors turn their attention towards more targeted exposures, such as sectors, and quite rightly demanding a similarly robust and thoughtful process for integrating ESG.”

Chris Mellor, head of EMEA equity ETF product management at Invesco, added: “Our new ETFs have the potential to deliver meaningful and measurable improvements above and beyond what would be achieved through exclusions alone.

“The ETFs are also expected to achieve their sustainability objectives while avoiding the risk of having an outsized weight in a small number of stocks.”

The new launches follow Invesco announcing it would include ESG ETFs within its securities lending programme last month in a bid to increase the “consistency and price competitiveness of its product range”.

In January, the firm also expanded its ESG roster by debuting the Invesco Global High Yield Corporate Bond ESG UCITS ETF (GBHY) on the London Stock Exchange. 

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