New ETF will be Invesco's first ESG ETF in Canada, offering an alternative core US large-cap equity exposure
TORONTO, March 5, 2020 /CNW/ -- Invesco Ltd. (NYSE: IVZ), a leading global provider of exchange-traded funds (ETFs), today announced the launch by Invesco Canada Ltd. of the Invesco S&P 500 ESG Index ETF (ticker symbol: ESG) the first Canadian-listed ETF offering exposure to companies that meet S&P DJI's Environmental, Social and Governance criteria for selection in the S&P 500® ESG Index. This unique methodology positions the Invesco S&P 500 ESG Index ETF as a way for Canadian investors to access US large-cap companies that better aligns with their personal ESG values, while still offering a risk/return profile similar to the benchmark S&P 500® Index.
"Invesco has been very deliberate in our expansion of the ETF business in Canada, thoughtfully launching products that we feel will further open up innovation in the space," says Dan Draper, Managing Director, Global Head of Invesco ETFs. "We believe that the Invesco S&P 500 ESG Index ETF will build on that history by offering an ESG fund that utilizes the framework of the most notable measure of the US equity market."
Invesco's first ESG ETF in Canada offers investors the following potential benefits:
- Constituents picked from the notable S&P 500 index - The S&P 500 Index is the most recognized gauge of large-cap US equities. The S&P 500 ESG Index was designed for investors who wish to integrate ESG components into broad-based investments without straying far from the overall profile of the S&P 500 Index.
- Competitive pricing - The Invesco S&P 500 ESG Index ETF will have a management fee of 15 basis points, making the ETF one of the most economical ESG ETFs currently available in Canada.
- Core exposure - The S&P 500 ESG Index is broadly constructed to be part of an investor's core portfolio, rather than having a narrow or thematic focus.
- Straightforward methodology - A transparent and quantifiable measure to gauge ESG practice, the methodology used for the S&P 500 ESG Index is applied across all companies included in the S&P 500 Index.
- Robust measure of ESG – Each company's S&P DJI ESG score is calculated by SAM, a division of S&P Global, using data gathered from SAM's Corporate Sustainability Assessment (CSA) and publicly available disclosures.
"The launch of the Invesco S&P 500 ESG Index ETF recognizes the demand from Canadian investors for an ETF that screens for ESG but still offers a return profile in line with the US large-cap market," offers Jasmit Bhandal, Vice President, Head of ETF Product Strategy & Development in Canada. "We believe that S&P DJI's method of evaluating and eliminating companies in this ESG Index could produce an ETF portfolio that overall favours companies with strong ESG scores, while still maintaining the same sector-balances and risk/return profile of its parent."
The Invesco S&P 500 ESG Index ETF is available in CAD (ticker symbol: ESG) and CAD-hedged (ticker symbol: ESG.F) series, allowing investors to choose the currency exposure that best suits their unique investment goals. Units in the ETF begin trading on the Toronto Stock Exchange (TSX) today.
Invesco 'Broad-based plus' US Equity Market ETFs
Canadian investors typically have 6.9% of their portfolio invested in US equities1. Invesco Canada now has three ETFs that offer investors a way to remain invested in the broad-based US equity market with an additional screen. Using the constituents of the S&P 500 Index, all three ETFs screen additional economic or non-financial aspects that could potentially affect financial performance, namely volatility, overvaluation in the US equity market, and an interest in sustainability. These three 'broad-based plus' Canadian ETFs are:
- Invesco S&P 500 Low Volatility Index ETF (ticker symbol: ULV)
- Invesco S&P 500 Equal Weight Index ETF (ticker symbol: EQL)
- Invesco S&P 500 ESG Index ETF (ticker symbol: ESG)
"With the launch of the Invesco S&P 500 ESG Index ETF, Invesco now has a comprehensive suite of 'broad-based plus' solutions for Canadian investors looking to gain exposure to the US equity market in a way that best suits their personal investing needs," explains Draper.
S&P 500 ESG Index Composition
The S&P 500 ESG Index methodology targets 75% of the traditional S&P 500's float market capitalization at the Global Industry Classification Standard (GICS®) level. S&P 500 Index companies are screened to exclude those involved in tobacco production, or with a meaningful amount of revenue from tobacco; companies involved with controversial weapons2; and those companies with a low UN Global Compact score. The remaining companies are sorted according to their S&P DJI ESG Score, which is based on the SAM CSA. Next, companies are selected for inclusion, top down by score, targeting 75% of the market capitalization of each GICS industry group. The S&P 500 ESG Index is rebalanced annually.
"We're excited to partner with Invesco on the launch of the first ETF product in Canada based on the S&P 500 ESG Index," said Reid Steadman, Global Head of ESG Indices at S&P Dow Jones Indices. "Since we introduced the world's first global ESG Index 20 years ago, the Dow Jones Sustainability World Index, S&P Dow Jones Indices has been a pioneer providing benchmarks for investors seeking to align their investment goals with their individual values."
Growth of Invesco's Global ESG suite
The launch of the Invesco S&P 500 ESG Index ETF also marks a new option in Invesco Ltd.'s growing commitment to ESG offerings globally. In the US, Invesco has been offering seven sustainability focused ETFs since 2005. These ETFs offer exposure to clean energy and clean technology with performance track records of over ten years. In EMEA, Invesco has three ESG ETFs that screen companies across three different global regions.
In recent years Invesco has strengthened its focus on the ESG space, not only in the growing suite of passive ESG products, but through a commitment to incorporating important sustainability and governance issues in its active strategies.
Invesco's Global ETF suite has 439 ETFs with US$272.8B assets under management (AUM) globally as of December 2019.
About Invesco Ltd.
Invesco Ltd. (NYSE: IVZ) is a global independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. With offices in 25 countries, our distinctive investment teams deliver a comprehensive range of active, passive and alternative investment capabilities. For more information, visit www.invesco.com.
Commissions, management fees and expenses may all be associated with investments in ETFs. ETFs are not guaranteed, their values change frequently, and past performance may not be repeated. Please read the prospectus before investing. Copies are available from Invesco Canada Ltd. at invesco.ca.
There are risks involved with investing in ETFs. Please read the prospectus for a complete description of risks relevant to the ETF. Ordinary brokerage commissions apply to purchases and sales of ETF units.
Most Invesco ETFs seek to replicate, before fees and expenses, the performance of the applicable index, and are not actively managed. This means that the sub-advisor will not attempt to take defensive positions in declining markets and the ETF will continue to provide exposure to each of the securities in the index regardless of whether the financial condition of one or more issuers of securities in the index deteriorates. In contrast, if an Invesco ETFs ETF is actively managed, then the sub-advisor has discretion to adjust that Invesco ETFs ETF's holdings in accordance with the ETF's investment objectives and strategies.
The S&P 500® ESG Index, the S&P 500 Low Volatility Index, and the S&P 500 Equal Weight Index (the "S&P Indices") are products of S&P Dow Jones Indices LLC or its affiliates ("SPDJI"), and have been licensed for use by Invesco Canada Ltd. S&P® and S&P 500® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Invesco Canada Ltd. The Invesco S&P 500 ESG Index ETF, the Invesco S&P 500 Low Volatility Index ETF, and the Invesco S&P 500 Equal Weight Index ETF are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product nor do they have any liability for any errors, omissions, or interruptions of the S&P Indices.
Invesco® and all associated trademarks are trademarks of Invesco Holding Company Limited, used under licence.
© Invesco Canada Ltd., 2020
1 Invesco Economics Insight; Investment Funds Advisory Service – Canada, January 2020
2 Controversial weapons include cluster weapons, landmines, biological or chemical weapons, depleted uranium weapons, white phosphorus weapons, and nuclear weapons.
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SOURCE Invesco Ltd.