Invesco launches global corporate bond ETF aiming to deliver a meaningful ESG improvement with low tracking difference 

by | Apr 15, 2024

Share this article

Invesco is launching a global corporate bond ETF that seeks to increase exposure to investment-grade issuers that demonstrate a robust ESG profile. The Invesco Global Corporate Bond ESG UCITS ETF will be passively managed, investing in the securities of corporate issuers from across developed markets, with weightings adjusted in accordance with certain ESG metrics.   

Gary Buxton, Head of EMEA ETFs and Indexed Strategies at Invesco, said: “Investors have been using ETFs to gain exposure to fixed income markets increasingly over the past 5 years. One of the main drivers of this acceleration in demand has been the launch of fixed income ETFs targeting specific ESG-related objectives, particularly those aiming to provide an uplift in ESG characteristics while maintaining a similar risk and return profile to a non-ESG benchmark.

The new Invesco ETF will aim to track the Bloomberg MSCI Global Liquid Corporate ESG Weighted SRI Sustainable Bond Index, which comprises the fixed-rate, taxable debt securities from global corporate issuers in developed countries. To be eligible, issuers must have an investment-grade credit rating and the principal and interest of the securities denominated in USD, EUR, GBP or CAD. The list of eligible currencies will be reviewed annually. 

 
 

The ESG-related objective will be achieved through a combination of exclusions and tilting. Issuers will be removed from the index if they are involved in certain business activities, have an MSCI ESG rating below BBB or have faced very severe controversies pertaining to ESG issues over the past three years. The index then uses MSCI ESG Ratings to tilt allocations compared to their market values in the Global Aggregate Corporate Index, along with limiting the market value weight of issuers to a cap of 5%. The index is rebalanced monthly.

Paul Syms, Head of EMEA Fixed Income and Commodity ETF Product Management at Invesco, said: “The new Invesco ETF adheres to the same investment methodology as our existing EUR, GBP and USD IG Corporate Bond ESG ETFs but on a multi-currency basis. It may be attractive for ESG-minded investors looking to take advantage of today’s high bond yields and potential for a favourable rate environment going forward, without taking on individual currency risk or deviating too much from the characteristics of the standard benchmark.”

ETF details

 
 
 Invesco Global Corporate Bond ESG UCITS ETF
Index nameBloomberg MSCI Global Liquid Corporate ESG Weighted SRI Sustainable Bond Index
ETF BBG tickerGCBE
Base currencyUSD
Trading currencyUSD
Annual charge0.15%

Share this article

Related articles

Sign up to the IFA Magazine Newsletter

Trending articles

IFA Talk logo

IFA Talk is our flagship podcast, that fits perfectly into your busy life, bringing the latest insight, analysis, news and interviews to you, wherever you are.

IFA Talk Podcast - listen to the latest episode

x