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Invesco to launch ESG passive funds

Invesco to launch ESG passive funds

Fundhouse Invesco is to launch a range of ethical, sustainable and governance (ESG) passive investment products.

Each of the three exchange traded funds (ETFs) has a different geographical focus, with products offering exposure to the European, US and Global markets.

The companies in the indices that the ETFs will track must, according to Invesco, both hit sustainability criteria now and be able to demonstrate "momentum" in terms of ESG criteria in future.

Invesco stated that 8 per cent of stocks have been excluded from the indices from the start for not being ethical, and the remainder are then assessed on the positive impact the companies make.

Gary Buxton, head of EMEA ETFs at Invesco, said: "We can see that retail and institutional investors are looking to include ESG into their portfolios in some capacity.

"As this trend continues and demand evolves, our product offering will continue to be shaped by the opportunities we can source in the market to meet the needs of our clients.

"These new ETFs are examples of being both responsive to current demand and forward-looking in keeping long-term performance at the core of the strategy."

Patrick Connolly, head of communications at advice firm Chase de Vere, said: "We don't have specific ESG portfolios at this time, though we have ethical portfolios.

"What we find is the term ESG isn't very clearly defined by either the fund houses or the investors, but clients are certainly interested in the subject."

david.thorpe@ft.com