Best of three worlds: Sterling Fixed Income+Passive+ESG

Invesco, the fund manager with $1.23 trillion in assets under management as of December 31, 2019, has launched in Europe a new, first-of-its-kind, sterling-denominated, corporate bond ETF with an ESG tilt. (ETFExpress) The Invesco GBP Corporate Bond ESG UCITS ETF (IGBE) trades on the London Stock Exchange. It has a total expense ratio (TER) of 0.10%.

Fund managers have so far given income investors in Europe the go-by on ESG criteria. However, investors now have a chance to invest with a positive ESG bias in Invesco’s new ETF.

What’s more, IGBE gives them this exposure through a low-cost, passive vehicle.

The ETF distills the expertise of Bloomberg Barclays for fixed income indexing and MSCI’s ESG research. Invesco provides the efficiency and liquidity of its ETF structure.

Negative exclusions

IGBE tracks the Bloomberg Barclays MSCI Sterling Liquid Corporate ESG Weighted Bond index. The Index excludes companies involved in tobacco, thermal coal, oil sands, civilian firearms or military weapons. Further, the weightage of issuers included in the index is tweaked to give higher exposure to those that have better ESG compliance.

Paul Syms, head of ETF fixed income product management, EMEA, at Invesco, commented: “The index this ETF follows has been designed to offer a higher ESG score than the broad corporate bond market but with similar sector exposures, credit ratings and risk characteristics.”

Gary Buxton, head of ETFs, EMEA, at Invesco, added: “As we continue building out our range of equity and fixed income ESG products, we are keen to ensure investors have not only a well-considered strategy but also an economical way to express their ethical views.”

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