Description

The Invesco USD IG Corporate Bond ESG Climate Transition UCITS ETF, through its GBP Hedged Distributing share class, seeks to mirror the total return performance of the Bloomberg MSCI USD Liquid Corporate Climate Transition ESG Bond Index (CTB), after accounting for associated fees. Investors can expect income distributions on a quarterly basis. To mitigate the impact of exchange rate fluctuations between the US Dollar and the British Pound, the GBP Hedged share class employs specific foreign exchange transactions. The underlying Reference Index focuses on US dollar-denominated, investment-grade, fixed-rate, taxable debt securities issued by corporations. These bonds are specifically chosen and weighted based on environmental, social, and governance (ESG) metrics, and must adhere to a decarbonization pathway consistent with Climate Transition Benchmark (CTB) requirements. For a bond to be included, it generally needs to have a minimum of USD 1 billion outstanding principal, or USD 500 million if issued by a utility company. The index implements stringent exclusionary criteria: securities are omitted if their issuer has an MSCI ESG rating below BB, has been implicated in very severe ESG controversies (including UN Global Compact violations) or significant environmental controversies within the last three years, or lacks comprehensive MSCI ESG Research coverage. Furthermore, exclusion applies to issuers involved in specific business activities as per the Bloomberg MSCI SRI methodology, including alcohol, adult entertainment, controversial weapons, conventional weapons, gambling, fossil fuels, GMOs, firearms, nuclear weapons, nuclear power, oil sands, thermal coal (hard coal and lignite), tobacco, or unconventional oil and gas. Emerging market issuers are also excluded. The fund's objective is achieved by portfolio managers using advanced modelling tools and techniques to select and hold a representative subset of the index's securities. This sampling approach allows the fund to effectively replicate the overall characteristics and performance of the entire index while optimizing costs that would typically be associated with full replication. This ETF is passively managed and operates as an index-tracking fund. An investment in this fund signifies the acquisition of units within the fund, rather than direct ownership of the underlying assets it holds.