ESG integration
Designed for core exposure, with key excusions and "ESG momentum"
Insight
Invesco MSCI ESG Universal Screened UCITS ETFs
30 September 2021
Low cost
Passive, low cost ETFs tracking customised versions of MSCI ESG Universal indices
Choice of regional exposures
USA, Europe, Japan, Pacific ex-Japan, Europe ex-UK, Emerging Markets, EMU and the World
Investment risks
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For complete information on risks, refer to the legal documents.
The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested.
Performance may be adversely affected by variations in the exchange rates between the base currency of the fund and the currencies to which it is exposed.
Some of the funds might be concentrated in a specific region or sector or be exposed to a limited number of positions, which might result in greater fluctuations in the value of the fund than for a fund that is more diversified.
The value of equities and equity-related securities can be affected by a number of factors including the activities and results of the issuer and general and regional economic and market conditions. This may result in fluctuations in the value of the fund.
The funds intend to invest in securities of issuers that manage their ESG exposures better relative to their peers. This may affect the funds’ exposures to certain issuers and cause the funds to forego certain investment opportunities. The funds may perform differently to other funds, including underperforming other funds that do not seek to invest in securities of issuers based on their ESG ratings.
The Fund might be concentrated in a specific region or sector or be exposed to a limited number of positions, which might result in greater fluctuations in the value of the Fund than for a fund that is more diversified.
Passive, low cost exposure to integrated ESG approach
If you’re like many of today’s investors who want to use ESG funds in the heart of their portfolios, rather than on the periphery, performance may be an important consideration. We’ve created a range of ETFs for those looking for an ESG approach suitable for core equity exposure, with significantly improved ESG characteristics and low tracking error.
The ETFs aim to track the performance of customised versions of the MSCI ESG Universal indices, which incorporate “ESG Momentum” designed to increase weighting to companies that are actively improving their ESG profile. MSCI has over 40 years’ experience in measuring ESG performance, covering more than 7,000 companies globally.1
The strategy aims to:
- Increase overall exposure to those companies demonstrating both a robust ESG profile as well as a positive trend in improving that profile,
- Avoid companies involved in certain controversial business practices or that do not have an ESG score.
Integrate ESG across your global portfolio
Our range of ETFs offer you a choice of geographic exposures, enabling you to improve the ESG characteristics across your equity holdings. Each ETF is designed to follow a regionally specific index with the same set of exclusions, selection and allocation methodology.
Source: Invesco, September 2021
Index methodology
Following the exclusion of any company that doesn’t have an ESG score or is involved in the most controversial activities, the index reweights the remaining securities according to their combined ESG scores. The score reflects MSCI’s assessment of both the security’s current ESG rating, as well as the trend in that rating, defined as the change in the security’s ESG rating over time.
The Index is reviewed and rebalanced on a semi-annual basis. It is also reviewed quarterly to ensure no constituent has been involved in a controversial business practice in the previous quarter.
Source: MSCI ESG Universal Select Business Screens Index Methodology, Sep 2021. Further details available in the methodology.
Invesco MSCI ESG Universal Screened UCITS ETFs
Our ETFs aim to deliver the performance of the relevant index by investing physically in the securities of the index, which provides us the right to vote. Proxy voting is an integral part of our investment process at Invesco, for active and passive strategies. We believe that the right to vote proxies should be managed with the same care as all other elements of the investment process, and we vote for proposals that, in our view, can maximize long-term shareholder value.
As a proxy held by a passive ETF, it will be voted in line with the majority holder of the active-equity shares held by Invesco. This enables us to leverage the active-equity expertise and comprehensive proxy voting reviews conducted by their teams.
What about cost?
We don’t think investors need to pay more for their core exposure by including ESG integration. Our ETFs are competitively priced compared to our other low-cost core exposures.
Footnotes
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1Source: MSCI ESG Research, as at September 2021. Years’ experience includes legacy companies KLD, Innovest, IRRC and GMI Ratings.
Important information
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This information is for discussion purposes only and is intended only for professional investors in Austria, Denmark, Finland, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Spain, Sweden and the UK, and Qualified Clients in Israel. Marketing materials may only be distributed in other jurisdictions in compliance with private placement rules and local regulations.
Data as at November 2021, unless otherwise stated. Costs may increase or decrease as result of currency and exchange rate fluctuations. Consult the legal documents for further information on costs. The investment concerns the acquisition of units in a fund and not in a given underlying asset.
For more information on our funds and the relevant risks, please refer to the share class-specific Key Investor Information Documents (available in local language), the Annual or Interim Reports , the Prospectus, and constituent documents, available from www.invesco.eu. A summary of investor rights is available in English from https://www.invescomanagementcompany.ie. The management company may terminate marketing arrangements.
This communication should not be considered financial advice. Persons interested in acquiring the product should inform themselves as to (i) the legal requirements in the countries of their nationality, residence, ordinary residence or domicile; (ii) any foreign exchange controls and (iii) any relevant tax consequences.
UCITS ETF’s units / shares purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units / shares on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units / shares and may receive less than the current net asset value when selling them.
The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The prospectus contains a more detailed description of the limited relationship MSCI has with Invesco and any related funds.
For the full objectives and investment policy please consult the current prospectus.
German investors may obtain the offering documents free of charge in paper or electronic form from the issuer or from the German information and paying agent (Marcard, Stein & Co AG, Ballindamm 36, 20095 Hamburg, Germany).
In Israel, the contents of this communication are restricted to Qualified Clients (pursuant to the First Schedule to the Israeli Regulation of Investment Advice, Investment Marketing and Investment Portfolio Management Law, 1995) only and are not intended for retail or private investors who are not Qualified Clients.
The publication of the supplement in Italy does not imply any judgment by CONSOB on an investment in a product. The list of products listed in Italy, and the offering documents for and the supplement of each product are available: (i) at etf.invesco.com (along with the audited annual report and the unaudited half-year reports); and (ii) on the website of the Italian Stock Exchange borsaitaliana.it.
This document has been communicated by Invesco Investment Management Limited, Central Quay, Riverside IV, Sir John Rogerson’s Quay, Dublin 2, Ireland, Invesco Asset Management Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire, RG9 1HH, United Kingdom, Invesco Asset Management (Schweiz) AG, Talacker 34, 8001 Zurich, Switzerland.
EMEA 94/2021
