Invesco listed today the firm’s first S&P 500 ETF built around environmental/social/governance (ESG) metrics on the Toronto Stock Exchange.
The Invesco S&P 500 ESG Index (ESG) targets about 75% of the market capitalization of the S&P 500 Index at a sector level, and the methodology screens out so-called objectionable companies involved with production and sale of tobacco, controversial firearms—such as landmines, nuclear and biological/chemical weapons—and those that score poorly on the United Nations’ sustainable and socially responsible pact known as the U.N. Global Compact. Companies with low S&P DJI ESG scores are also excluded.
ESG, which costs 0.15% in management fees, or $15 per $10,000 invested, comes to market with some 311 securities led by Microsoft, Apple, Amazon, Alphabet and JPMorgan Chase.
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The average Canadian investor has about 7% of their portfolio allocated to U.S. equities, according to Invesco. This new ETF joins a small but quickly growing segment of ESG strategies in Canada, offering Canadian investors access to U.S. large-cap stocks that meet their personal values, while still maintaining a similar risk/return profile to the S&P 500 index.
ESG joins Invesco’s lineup of U.S.-focused ETFs designed to be part of Canadian investors’ core lineup. Other funds include the Invesco S&P 500 Low Volatility Index ETF (ULV) and the Invesco S&P 500 Equal Weight Index ETF (EQL).
“Invesco has been very deliberate in our expansion of the ETF business in Canada, thoughtfully launching products that we feel will further open up innovation in the space,” Dan Draper, managing director, global head of Invesco ETFs, said in a release. “We believe that the Invesco S&P 500 ESG Index ETF will build on that history by offering an ESG fund that utilizes the framework of the most notable measure of the U.S. equity market.”
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