Invesco launches $1.6 billion US climate ETF backed by Finnish funding
Amid US investors withdrawing from sustainable funds, Atlanta’s Invesco has introduced a new climate-focused ETF. The fund received an initial $1.6 billion in assets from Varma Mutual Pension Insurance Company in Finland.
Brian Hartigan, interim global head of ETFs and indexed securities at Invesco, expressed optimism that the Invesco MSCI Global Climate 500 ETF would act as a foundational investment, integrating environmental factors while aiming for strong competitive returns.
“This offers access to a global portfolio of sustainable businesses without being too customized or restrictive on the minutiae” of ESG investing, said Hartigan.
Also read: ESG funds and sustainable investing outperform traditional funds, report says
Hartigan further explained that the Finnish firm chose to launch a US-based ETF instead of a European fund or separate account to maximize liquidity and cost efficiency. Like all ETFs, the new product will be accessible for other investors to buy and sell.
Analysts monitoring ETF trends emphasized their ongoing scrutiny of how portfolios emphasizing environmental, social, or governance (ESG) factors perform.
The index that underlies the new ETF was custom-designed by MSCI for Varma.
Designed to track the MSCI ACWI Select Climate 500 Index, it includes companies in the market-capitalization weighted MSCI ACWI ex Select Countries Index, screened to identify those with greenhouse gas emissions reduction targets that fit Varma’s goal of backing a shift away from fossil fuels.
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