Description

The Invesco GBP Corporate Bond Screened & Tilted UCITS ETF (IGBE.L) aims to deliver the total investment return of its benchmark, the Bloomberg MSCI Sterling Liquid Corporate Screened & Tilted Index, net of its own expenses. This fund makes income distributions to investors quarterly. The underlying index focuses on high-quality, fixed-interest, taxable corporate debt securities denominated in British Pounds. A core feature of this index is its adjustment based on specific Environmental, Social, and Governance (ESG) criteria, with the goal of increasing exposure to companies demonstrating strong sustainability profiles. For inclusion, individual bonds must have a minimum outstanding value of £350 million. The index applies stringent exclusionary rules: it omits bonds from issuers with an MSCI ESG rating below BB, those lacking an MSCI ESG rating or controversy score, and companies involved in severe ESG-related controversies (including UN Global Compact violations) within the past three years. Furthermore, it specifically screens out investments in controversial industries such as alcohol, adult entertainment, various types of weapons, fossil fuels, gambling, genetically modified organisms, firearms, nuclear power (and weapons), oil sands, thermal coal, tobacco, and unconventional oil and gas. Bonds from emerging market issuers are also not permitted. For the eligible securities that remain, an ESG score is calculated using MSCI's metrics. This score then dictates how the securities are re-weighted within the index, departing from their natural market-capitalization-based proportions to favor those with better ESG performance. The index's composition is reviewed and updated monthly. To achieve its objective, the fund's managers employ sophisticated portfolio modelling and techniques to invest in a strategic sample of the index's constituents. This "sampling" method is designed to closely replicate the benchmark's performance while minimizing the costs typically associated with full index replication. As such, this ETF is passively managed. Investors purchasing units in this fund are acquiring a stake in an index-tracking vehicle, rather than directly owning the underlying debt securities held by the fund.