Description

The Invesco MSCI USA ESG Climate Paris Aligned UCITS ETF seeks to replicate the net total return performance of the MSCI USA ESG Climate Paris Aligned Benchmark PAB Select Index, after accounting for its fees. This benchmark index monitors the financial performance of major and mid-sized US companies. It is engineered to mitigate both transitional and physical climate-related risks, concurrently capitalizing on prospects presented by the shift towards a less carbon-intensive economy, all in adherence to the Paris Agreement's mandates. Furthermore, the index prioritizes companies with exemplary environmental, social, and governance (ESG) criteria, integrates the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and is crafted to surpass the baseline requirements set by the EU's Paris-Aligned Benchmark as defined in EU Regulation 2020/1818. The index's construction begins with the broader MSCI USA Index, from which specific exclusion criteria are applied. The remaining securities then undergo an optimization process designed to harmonize the Reference Index with the Paris Agreement's objectives. This is achieved by diminishing the allocation to companies susceptible to climate transition risks and enhancing the allocation to those best positioned for climate transition opportunities, while simultaneously striving to minimize anticipated tracking differences compared to its Parent Index. The selected constituents are also bound by rules ensuring diversification and controlled portfolio turnover. The fund achieves its objective primarily by acquiring and retaining, to the greatest extent feasible, all the securities comprising the Reference Index, in their exact proportions. It will adjust its portfolio semi-annually, mirroring the Reference Index's scheduled updates. This ETF operates as a passively managed, index-replicating fund, meaning an investment constitutes an acquisition of fund units, not direct ownership of the underlying assets held by the fund.