Invesco MSCI USA ESG Universal Screened UCITS ETF
| Issuer: Invesco |
| Asset Class: Equity |
| TER: 9bps |
| Trading Currency: GBX |
| Pays Income: False |
| Listing Date: 17 Jun 2019 |
| Ticker: ESGS |
| ISIN: IE00BJQRDM08 |
This investment vehicle offers exposure to the US equity market by aiming to replicate the performance of a specific MSCI index. The strategy is designed for those who want to invest in a broad basket of US large and mid-capitalisation stocks while adhering to certain environmental, social, and governance (ESG) principles. The underlying index starts with a comprehensive parent index of US companies and then applies a series of screens to filter out businesses involved in specific controversial activities. This results in a portfolio that maintains broad market characteristics but is tailored to meet certain ethical standards.
The screening methodology is what defines this product. It systematically excludes companies with significant business involvement in areas such as controversial weapons, civilian firearms, tobacco, thermal coal, and oil sands extraction. Furthermore, it removes companies that are found to be in violation of the United Nations Global Compact principles, which cover human rights, labour, environment, and anti-corruption. This "universal screened" approach provides a foundational ESG filter, allowing investors to avoid some of the most contentious industries without engaging in more complex ESG rating or tilting methodologies. The fund utilises a full physical replication strategy, meaning it holds the actual shares of the companies in the index.
This product is well-suited for investors seeking a core holding for their US equity allocation but who wish to integrate a baseline level of responsible investing. It provides a low-cost and diversified way to access hundreds of American companies, excluding those that do not meet the specified ESG criteria. By doing so, it may help mitigate long-term risks associated with these excluded sectors and align an investment portfolio with the personal values of the investor. It serves as a straightforward entry point into sustainable investing, focusing on exclusion rather than active selection based on ESG performance.
