Invesco ETF launches two new Enhanced Equity ETFs on the LSE

Invesco ETF launches two new Enhanced Equity ETFs on the London Stock Exchange

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By ETFWorld.co.uk

Matt Tagliani, Head of EMEA ETF Product at Invesco

Invesco ETF is expanding its range of systematic active equity strategies. The offering, which already includes the globally invested Invesco Global Enhanced Equity ETF, is now being expanded to include ETFs focusing on individual regions and countries.

The first of these is the newly launched Invesco Europe Enhanced Equity UCITS ETF for exposure to European equities.

Invesco’s active equity ETFs all follow the same investment approach and aim to offer investors a benchmark-like experience while actively managing to achieve long-term outperformance of the index, net of fees. This places these funds between purely passive and traditional active strategies.

Matt Tagliani, Head of EMEA ETF Product at Invesco, says: “These funds offer investors cost-effective access to a strategy developed by a team with more than 40 years of experience in factor-based investing. The systematic approach to security selection and portfolio construction enables scalable capture of factor performance in a large, diversified portfolio. We believe these systematic, active ETFs are a natural extension of the current offering of rule-based beta and smart beta ETFs.”

Invesco’s Quantitative Strategies team uses an optimisation process based on the factors of value, quality and momentum. Using a proprietary model, the team assesses the attractiveness of equities from a broad universe of liquid securities from all regions with high and medium market capitalisation. The optimisation process then identifies the best portfolio composition, taking into account the fund’s exposure to the three factors, risk considerations and transaction costs. The entire process of factor evaluation, modelling and portfolio construction is repeated on a monthly basis. The fund’s positions are then reweighted.

Erhard Radatz, Global Head of Portfolio Management at Invesco Solutions, says: “Our Enhanced Equity strategy has a track record of over 20 years. The ETFs do not track a benchmark index. However, we set maximum active positions for individual stocks, industries, sectors and countries to provide investors with an “index-like experience”. Our fundamental belief, based on historical data, is that a combination of the factors of value, momentum and quality can lead to lower volatility and above-average performance.”

For the Invesco Europe Enhanced Equity UCITS ETF, the MSCI Europe Index is used for performance measurement purposes only.

Invesco has a long history of active management, from fundamental to factor-based strategies, and was one of the first providers of active ETFs in Europe. The new ETF is the company’s ninth active ETF in Europe, whose range of active ETFs includes equity and bond funds with assets under management of USD 2 billion.

Source: ETFWorld.co.uk