Invesco has broadened its range of ethical exchange traded-funds with the launch of the Invesco S&P 500 ESG fund.
The portfolio will provide a risk and return profile similar to that of the S&P 500 — the 500 large companies listed on stock exchanges in the United States — but with an improved environmental, social and governance leaning.
To do this, the ETF offers exposure to the top 75 per cent of companies in each industry group ranked by their S&P Dow Jones Index ESG score, which are then weighted by size.
The fund excludes companies that either are involved in tobacco or controversial weapons, have a low United Nations Global Compact score, or are in the bottom quarter of their industry group in terms of ESG score.
Gary Buxton, head of EMEA ETFs at Invesco, said: “The more we speak with different investors about ESG, the more we appreciate the extent to which their objectives may vary.
“As ESG becomes more mainstream, we believe that finding appropriate solutions is going to be increasingly relevant.”
The fund will be listed on the London Stock Exchange and will have an ongoing charge of 0.09 per cent.
Tom Sparke, investment manager at GDIM, said: “This ETF is a welcome progression in the realm of ESG and should help by allowing investors who want a passive exposure to the US but who would like to filter out some of the worst offenders in terms of ESG.
“We have found that some passive funds struggle with omitting some companies with less obvious ESG flaws but with Invesco at the helm I would be hopeful that this one would have a robust process.”
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