Invesco has unveiled a Sterling corporate bond exchange-traded fund incorporating ESG criteria, in what it has called a “first” for Europe.
The strategy uses MSCI ESG research, Bloomberg’s fixed income indexing, alongside Invesco’s ETF experience.
Bonds must be issued by companies in developed markets to make it into the portfolio. Any businesses involved in tobacco, thermal coal, oil sands, civilian firearms, or military weapons is excluded.
Paul Syms, head of ETF fixed income product management at Invesco, said: “Income investors continue to struggle for decent yield and, up until now, finding an attractive yield with ESG considerations factored into the product has been tough.”
The fund aims to bridge a gap in the market, according to the firm. In 2019, net inflows into ETFs with an ESG theme more than doubled their assets under management, but more than 80% of these flows were into equity firms, the fund manager said.
The Invesco GBP Corporate ESG Ucits ETF aims to address the “growing needs” of income investors looking for low-cost passive exposure to an ESG benchmark.
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