Atlanta-based asset manager Invesco has launched a US equities ETF with a forward-looking focus on climate transition.
The fund will track a version of the S&P 500 index aligned with a 1.5°C climate scenario using a forward-looking transition pathway model.
This index is constructed from the parent S&P 500 index by excluding securities that are involved in tobacco, controversial weapons, oil sands, small arms, military contracting or thermal coal or do not comply with the UN Global Compact principles.
The index then applies an optimisation approach to find a solution that meets all the intended climate and ESG objectives while minimising the difference in constituent, sector and industry weights to the parent S&P 500 index
Gary Buxton, Head of EMEA ETFs and Indexed Strategies at Invesco, said: “Many investors who want to include climate-related objectives in their portfolios also want similar performance to standard benchmarks.
“These two aims can be at odds with each other, so investors need to understand what they want to achieve personally with their investment and the acceptable level of deviation from the benchmark. We believe our new ETF offers investors the potential for closer tracking and a more representative path towards decarbonisation.”
The Invesco S&P 500 CTB Net Zero Pathway ESG UCITS ETF is classified as an Article 8 fund under the SFDR guidelines.
