Invesco MSCI USA ESG Climate Paris Aligned UCITS ETF Acc

Issuer: Invesco

Asset Class: Equity

TER: 9bps

Trading Currency: USD

Pays Income: False

Listing Date: 09 Dec 2021

Ticker: PAUS

ISIN: IE000RLUE8E9

This investment vehicle offers exposure to a portfolio of large and mid-capitalisation companies within the US equity market, designed for those who wish to integrate stringent climate and sustainability criteria into their core holdings. The fund aims to replicate the performance of a specialised index that aligns with the objectives of the Paris Agreement. By tracking this benchmark, it provides a transparent and rules-based approach to responsible investing, focusing on companies that are leading the transition to a lower-carbon economy while meeting high environmental, social, and governance (ESG) standards. The underlying strategy is constructed to offer broad market exposure while significantly reducing carbon intensity.

The methodology is rooted in the EU's Climate Transition and Paris-aligned Benchmark frameworks. It begins with the broad MSCI USA universe and applies a series of screens to achieve its climate objectives. This includes reducing greenhouse gas intensity by at least 50% relative to the parent index and implementing a self-decarbonisation pathway of at least 7% on average per year. Furthermore, the index excludes companies involved in controversial activities such as controversial weapons, tobacco, and thermal coal, as well as firms that violate global norms like the UN Global Compact principles. Following these exclusions, a 'best-in-class' approach selects companies with the highest ESG ratings, resulting in a portfolio tilted towards sustainability leaders.

This product is particularly suited for investors seeking to de-risk their portfolios from climate-related transition risks and align their capital with long-term sustainability goals. It provides a core US equity allocation that not only targets financial returns but also contributes to positive environmental outcomes. The accumulating share class structure means that any dividends received from the underlying companies are automatically reinvested back into the fund, which can enhance the effects of compounding over time. It is an efficient tool for building a diversified, climate-conscious portfolio with a focus on the world's largest equity market.