Invesco MSCI USA ESG Universal Screened UCITS ETF
| Issuer: Invesco |
| Asset Class: Equity |
| TER: 9bps |
| Trading Currency: USD |
| Pays Income: False |
| Listing Date: 12 Aug 2021 |
| Ticker: ESUD |
| ISIN: IE000A8N67F3 |
This fund offers a core holding for investors seeking to integrate Environmental, Social, and Governance (ESG) principles into their US equity allocation. The strategy aims to provide broad exposure to the US stock market, comprising large and mid-capitalisation companies, while applying a systematic screening process to enhance its sustainability profile. This approach is designed for those who wish to maintain market-like returns and risk characteristics but with a conscious tilt towards companies that demonstrate stronger ESG performance and avoid certain controversial industries.
The investment vehicle passively tracks an index that begins with a broad universe of US-listed companies and then applies a series of exclusions. It filters out firms with significant business involvement in activities such as controversial weapons, civilian firearms, tobacco, thermal coal, and oil sands. Additionally, it removes companies that violate the principles of the United Nations Global Compact. The remaining constituents are then weighted to favour those with higher ESG ratings, thereby rewarding corporate leaders in sustainability while still maintaining broad sector diversification. This methodology provides a comprehensive, rules-based approach to socially responsible investing.
By providing a diversified portfolio of ESG-screened US companies, the fund can serve as a foundational building block in a modern investment portfolio. It allows investors to align their capital with their values without taking on significant active risk relative to the broader market. The fund is structured to physically replicate its benchmark index, holding the underlying securities directly, which offers transparency and simplicity. The distributing share class provides the potential for a regular income stream from the dividends paid by the underlying holdings.
