Invesco lists two ESG ETFs on LSE

Invesco has launched two new Exchange Traded Funds (ETFs) to the LSE (London Stock Exchange)

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By ETFWorld.co.uk

Invesco MSCI Emerging Markets ESG Climate Paris Aligned UCITS ETF Acc

The Invesco MSCI Emerging Markets ESG Climate Paris Aligned UCITS ETF aims to provide the net total return performance of the MSCI Emerging Markets ESG Climate Paris Aligned Benchmark Select Index, less the impact of fees.

The Reference Index tracks the performance of large and mid-capitalisation companies across 24 Emerging Market countries and aims to reduce exposure to transition and physical climate risks whilst pursuing opportunities arising from the transition to a lower carbon economy while aligning with the Paris Agreement requirements. The Reference Index also provides exposure to companies with high ESG metrics and incorporates the TCFD (Task Force on Climate Related Financial Disclosures) recommendations and is designed to exceed the minimum standards of the EU Paris-Aligned Benchmark as set out in the Commission Delegated Regulation (EU) 2020/1818.

The Reference Index is constructed from the MSCI Emerging Markets Index by applying the index provider’s exclusionary criteria. The remaining constituents are then subject to an optimisation, which has the aim of aligning the Reference Index to the objectives of the Paris Agreement by reducing the weighting of companies exposed to climate transition risks, maximising the weighting of companies with the highest exposure to climate transition opportunities and minimising the ex-ante tracking error relative to the Parent Index. The remaining constituents are also subject to a set of diversification and turnover constraints.

The portfolio managers aim to achieve the fund’s objective by using portfolio modelling tools and techniques to buy and hold a proportion of the index securities that represents the characteristics of the entire index. The objective of this sampling method is to replicate the index performance as closely as possible while reducing the costs that would normally be incurred with full replication. The fund is rebalanced in line with changes to the Reference Index, which is reviewed and rebalanced on a semi-annual basis.

This ETF is passively managed.

Source: ETFWorld.co.uk