Invesco lists four new products on the LSE: an ETC on physical gold and three ETFs on global government bonds

Invesco today completed the listing of four new instruments on the London Stock Exchange (LSE).

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Article created by the editorial staff of ETFWorld.co.uk

Matthew Tagliani, Head of ETF Product EMEA at Invesco

The listing comprises an Exchange Traded Commodity (ETC) linked to physical gold and three share classes of a UCITS-compliant Exchange Traded Fund (ETF) focused on global government bonds. The listing of these instruments on the London market expands the group’s offering in the commodities and passively managed fixed-income segments.

Invesco Physical Gold II ETC (XS3384723154)

The first instrument listed is the Invesco Physical Gold II ETC, which has a Total Expense Ratio (TER) of 0.12%. As indicated by its legal structure, it is an Exchange Traded Commodity. The ETC is a certificate and not a mutual fund or an ETF. The issuer is Invesco Physical Markets PLC, a company domiciled in Ireland and administered by J.P. Morgan Administration Services (Ireland) Limited.

The instrument tracks the performance of the spot price of gold. The collateral is provided by physical gold held in an allocated account at the vaults of J.P. Morgan Chase Bank in London. The custodian uses an approach known as the ‘swing bar’ method, maintaining a stock of gold bars with a value at least equal to the total value of the certificates in circulation. The metal is valued daily based on the afternoon auction price (PM auction) set by the London Bullion Market Association (LBMA).

A specific operational aspect concerns the origin of the metal. The custodian has been instructed to hold in the segregated account only bullion minted after 2012. This requirement ensures compliance with the LBMA Responsible Gold Guidance. The aim is to ensure adherence to ethical standards throughout the entire supply chain, preventing human rights abuses, conflict financing, money laundering and the financing of terrorism.

Invesco Global Government Bond UCITS ETF

Invesco has also listed three share classes of the Invesco Global Government Bond UCITS ETF. All three funds are passively managed and track the total return performance of the Bloomberg Global Aggregate Treasuries Index, net of management fees.

The benchmark index tracks the performance of global fixed-rate government debt denominated in local currency, issued by countries with investment-grade ratings. The universe includes both developed and emerging markets. The eligibility criteria for currencies and the minimum outstanding nominal amount threshold for individual securities are defined in the index methodology.

The portfolio managers employ a sampling strategy supported by quantitative analysis. The selection of securities for the portfolio is based on factors such as the index’s weighted average duration and credit quality.

The three share classes currently listed have different operational characteristics:

Invesco Global Government Bond UCITS ETF Dist (IE000NKC01D0)

This share class has a TER of 0.09%. The distribution policy provides for the payment of dividends on a quarterly basis.

Invesco Global Government Bond UCITS ETF GBP PfHdg Acc (IE000VKU6XC9)

This accumulation share class has a TER of 0.12%. The share class is hedged against currency risk (GBP Hedged). To minimise exposure to fluctuations in the exchange rate between the US dollar and the British pound, the fund uses foreign exchange transactions. The income generated is not distributed but reinvested in the fund’s assets.

Invesco Global Government Bond UCITS ETF GBP PfHdg Dist (IE000GXS8PV9)

This share class has a TER of 0.12%. Here too, currency risk is hedged against the British pound (GBP Hedged) through foreign exchange transactions. The distribution policy provides for the payment of dividends on a quarterly basis.

Today’s listings provide professional investors with further options for allocating capital to commodities and global sovereign debt, with a focus on physical replication, currency hedging and the periodic distribution of income.

Source: ETFWorld.co.uk