Invesco MSCI USA ESG Universal Screened UCITS ETF GBP Hedged

Issuer: Invesco

Asset Class: Equity

TER: 12bps

Trading Currency: GBX

Pays Income: False

Listing Date: 28 Jan 2022

Ticker: ESPB

ISIN: IE000T5R61X5

This investment product provides broad exposure to the United States equity market, encompassing a wide array of companies across large, mid, and small-cap segments. It is structured for investors looking to build a core US equity position while incorporating a layer of values-based screening. The fund's objective is to mirror the performance of a specific benchmark index that filters its constituents based on environmental, social, and governance (ESG) criteria, offering a way to participate in the growth potential of the American economy with a socially responsible tilt.

The underlying index employs a systematic exclusion methodology. It removes companies that have significant business involvement in controversial areas such as thermal coal, oil sands, tobacco, and certain types of weapons. Additionally, the index screens out firms that fail to comply with the principles of the United Nations Global Compact, which relate to human rights, labor, environment, and anti-corruption. This screening process ensures that the portfolio aligns with specific ethical standards, making it a suitable option for investors who wish to actively avoid financing companies engaged in these particular activities.

The resulting portfolio is highly diversified across numerous economic sectors, providing a comprehensive, albeit filtered, representation of the US stock market. This particular share class is currency-hedged, which is a crucial feature for investors whose home currency is not the US dollar. The hedging strategy aims to minimize the impact of currency fluctuations between the US dollar and the pound sterling, thereby reducing a significant source of volatility and providing a return profile that is more directly linked to the performance of the underlying US stocks.