Invesco Global High Yield Corporate Bond ESG UCITS ETF GBP Hedged (Dist)

Issuer: Invesco

Asset Class: Fixed Income

TER: 30bps

Trading Currency: GBX

Pays Income: False

Listing Date: 16 Jan 2023

Ticker: GBHG

ISIN: IE00020C1NS6

This actively managed fund offers exposure to the global high-yield corporate bond market with a distinct focus on environmental, social, and governance (ESG) principles and climate objectives. The primary aim is to deliver a compelling total return, through a combination of income and capital appreciation, over a long-term horizon of five years or more. By investing in sub-investment grade debt securities from issuers worldwide, it targets higher potential yields compared to government or investment-grade corporate bonds. This particular share class is hedged, seeking to minimize the impact of currency fluctuations between the portfolio's underlying assets and the British pound.

The investment strategy is fundamentally driven by a rigorous, multi-layered screening process. It begins by excluding companies involved in controversial sectors such as weapons, tobacco, and thermal coal extraction, as well as those violating international norms. The portfolio managers then apply a positive tilt, favoring issuers that demonstrate strong ESG characteristics and have a credible decarbonization strategy aligned with the Paris Agreement goals. This dual approach of exclusions and best-in-class selection results in a portfolio that aims for a significantly lower carbon footprint and a higher overall ESG score than the broader high-yield market. Active management allows the team to navigate the complexities of credit risk and market cycles while upholding the fund's sustainability mandate.

For investors, this product can serve as a strategic allocation to enhance portfolio income while aligning capital with climate-aware and sustainable outcomes. It is designed for those willing to accept the higher risk profile associated with high-yield bonds in exchange for potentially greater returns. The fund provides a solution for integrating responsible investing principles into the fixed income portion of a diversified portfolio, without sacrificing the potential for active management to add value through security selection and risk management.