ESG corporate bond ETFs

You can gain exposure to corporate bonds from issuers meeting strict ESG criteria

Incorporating ESG into your corporate bond portfolio

Corporate bond markets are much more diverse than those for government bonds, with exposure to companies operating in a variety of sectors. In addition to the number of years to maturity and the currency in which the bonds are issued, corporate bond investors also have a choice in terms of the issuing companies’ credit quality and even how the businesses are managed.

Our core range of corporate bond ETFs include those aiming to avoid certain sectors and to emphasise companies with strong environmental, social and governance (ESG) characteristics. They provide investors with low-cost core elements for constructing diversified ESG portfolios. 

  • An investment in this fund is an acquisition of units in a passively managed, index tracking fund rather than in the underlying assets owned by the fund.

    Costs may increase or decrease as result of currency and exchange rate fluctuations. Consult the legal documents for further information on costs.

    ESG: Any investment decision should take into account all the characteristics of the fund as described in the legal documents. For sustainability related aspects, please refer to www.invescomanagementcompany.ie/dub-manco.

    Read the investment risks at the end of the webpage

Investment Grade (IG) Corporate Bond ESG ETFs

We offer four investment-grade ETFs, three focused on single currency exposures denominated in USD, EUR or GBP and one which provides global bond exposure. Our range of single-currency Corporate Bond ESG ETFs track the Bloomberg MSCI Liquid Corporate ESG Weighted SRI indices which are designed to provide broad and diversified exposure to investment grade corporate bonds denominated in the respective currencies.

Our Global Corporate Bond ESG ETF tracks the performance of the multi-currency Bloomberg MSCI Global Liquid Corporate ESG Weighted SRI Sustainable Bond index, which aims to provide broad and diversified exposure to investment grade corporate bonds issued in USD, EUR, GBP, and CAD, whilst applying more stringent ESG criteria than the single currency indices. 

All indices, however, integrate ESG by not only applying negative screening but also by tilting constituent weights based on ESG ratings. Securities are excluded from the index if the issuing company:

  • Has an MSCI ESG rating below BB (or doesn’t not have a rating) for our single currency ETFs, and a rating below BBB for our Global Corporate Bond ESG UCITS ETF; 
  • Is involved in (as defined by the index provider) alcohol, adult entertainment, controversial weapons, conventional weapons, fossil fuels, gambling, genetically modified organisms (GMOs), civilian firearms, nuclear weapons, nuclear power, oil sands, thermal coal, tobacco, or unconventional oil and gas;
  • Is domiciled in an emerging market country;
  • has faced very severe controversies pertaining to ESG issues over the last three years. 

Each of the remaining securities has an ESG score that has been assigned using MSCI ESG metrics. This ESG Score is used to re-weight the eligible securities from their natural (market capitalisation) weights by applying a factor tilt in favour of constituents with higher ESG Scores. 

High Yield Corporate Bond ESG ETFs

We also offer two high-yield ETFs that follow indices with similar methodologies as their investment-grade counterparts. The exclusions are the same as those listed above, other than our global high-yield ETF, which includes issuers from developed and emerging markets. As with the investment-grade ETFs, both the global and the USD high-yield ETFs are also designed to re-weight eligible securities using their ESG Scores.

Why Invesco ETFs?

Each of the Invesco Corporate Bond ESG UCITS ETFs aims to track the performance of an index through passive, physical replication. Invesco’s team of portfolio managers aim to achieve the fund’s objective by using portfolio modelling tools and techniques to buy and hold a proportion of the index securities that represents the characteristics of the entire index. The objective of this sampling method is to replicate the index performance as closely as possible while reducing the costs that would normally be incurred with full replication.

Our portfolio management team is responsible for the efficient buying and selling of the ETF’s bonds, and the rebalancing of the portfolio, while our dedicated capital markets team works closely with leading brokers and market-makers who facilitate the efficient trading of our ETFs. 

The full list of ETF holdings and index constituents are published daily on the Invesco ETF website. 
ETF Investing (Exchange Traded Funds)

Investment Risks

  • For complete information on risks, refer to the legal documents.

    The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested. The creditworthiness of the debt the Fund is exposed to may weaken and result in fluctuations in the value of the Fund. There is no guarantee the issuers of debt will repay the interest and capital on the redemption date. The risk is higher when the Fund is exposed to high yield debt securities. Changes in interest rates will result in fluctuations in the value of the fund.

    Invesco EUR IG Corporate Bond ESG UCITS ETF Dist: The Fund intends to invest in securities of issuers that manage their ESG exposures better relative to their peers. This may affect the Fund’s exposure to certain issuers and cause the Fund to forego certain investment opportunities. The Fund may perform differently to other funds, including underperforming other funds that do not seek to invest in securities of issuers based on their ESG ratings.

    Invesco GBP Corporate Bond ESG UCITS ETF Dist: The Fund intends to invest in securities of issuers that manage their ESG exposures better relative to their peers. This may affect the Fund’s exposure to certain issuers and cause the Fund to forego certain investment opportunities. The Fund may perform differently to other funds, including underperforming other funds that do not seek to invest in securities of issuers based on their ESG ratings. The Fund might be concentrated in a specific region or sector or be exposed to a limited number of positions, which might result in greater fluctuations in the value of the Fund than for a fund that is more diversified.

    Invesco USD IG Corporate Bond ESG UCITS ETF Dist, GBP Hgd Dist    : The Fund intends to invest in securities of issuers that manage their ESG exposures better relative to their peers. This may affect the Fund’s exposure to certain issuers and cause the Fund to forego certain investment opportunities. The Fund may perform differently to other funds, including underperforming other funds that do not seek to invest in securities of issuers based on their ESG ratings. The Fund might be concentrated in a specific region or sector or be exposed to a limited number of positions, which might result in greater fluctuations in the value of the Fund than for a fund that is more diversified. GBP Hgd Dist: Currency hedging between the base currency of the Fund and the currency of the share class may not completely eliminate the currency risk between those two currencies and may affect the performance of the share class.

    Invesco Global High Yield Corporate Bond ESG UCITS ETF Acc, Dist, GBP PfHdg Dist, EUR PfHdg Acc: This fund may hold a significant amount of debt instruments which are of lower credit quality. This may result in large fluctuations of the value of the ETF as well as impacting its liquidity under certain circumstances. The Fund intends to invest in securities of issuers that manage their ESG exposures better relative to their peers. This may affect the Fund’s exposure to certain issuers and cause the Fund to forego certain investment opportunities. The Fund may perform differently to other funds, including underperforming other funds that do not seek to invest in securities of issuers based on their ESG ratings. It may be difficult for the Fund to buy or sell certain instruments in stressed market conditions. Consequently, the price obtained when selling such instruments may be lower than under normal market conditions. GBP PfHdg Dist, EUR PfHdg Acc: Currency hedging between the base currency of the Fund and the currency of the share class may not completely eliminate the currency risk between those two currencies and may affect the performance of the share class.

Important information

  • This marketing communication is exclusively for use by professional investors in Portugal. It is not intended for and should not be distributed to the public. Investors should read the legal documents prior to investing.

    Data as at 30 May 2024, unless otherwise stated.

    By accepting this material, you consent to communicate with us in English, unless you inform us otherwise.

    This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

    Views and opinions are based on current market conditions and are subject to change.

    Telephone calls may be recorded.

    For information on our funds and the relevant risks, refer to the Key Information Documents/Key Investor Information Documents (local languages) and Prospectus (English, French, German), and the financial reports, available from invesco.eu. A summary of investor rights is available in English from invescomanagementcompany.ie. The management company may terminate marketing arrangements.

    UCITS ETF’s units / shares purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units / shares on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units / shares and may receive less than the current net asset value when selling them.

    Invesco EUR IG Corporate Bond ESG UCITS ETF Dist: “Bloomberg®” and the Bloomberg MSCI Euro Liquid Corporate ESG Weighted Bond Index are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the index (collectively, “Bloomberg”) and have been licensed for use for certain purposes by Invesco. Bloomberg is not affiliated with Invesco, and Bloomberg does not approve, endorse, review, or recommend the Invesco EUR IG Corporate Bond ESG UCITS ETF. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to the Invesco EUR IG Corporate Bond ESG UCITS ETF.

    Invesco GBP Corporate Bond ESG UCITS ETF Dist: “Bloomberg®” and the Bloomberg MSCI Sterling Liquid Corporate ESG Weighted Bond Index are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the index (collectively, “Bloomberg”) and have been licensed for use for certain purposes by Invesco. Bloomberg is not affiliated with Invesco, and Bloomberg does not approve, endorse, review, or recommend the Invesco GBP Corporate Bond ESG UCITS ETF. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to the Invesco GBP Corporate Bond ESG UCITS ETF.

    Invesco USD IG Corporate Bond ESG UCITS ETF Dist, GBP Hgd Dist    : “Bloomberg®” and the Bloomberg MSCI USD Liquid Corporate ESG Weighted Bond Index are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the index (collectively, “Bloomberg”) and have been licensed for use for certain purposes by Invesco. Bloomberg is not affiliated with Invesco, and Bloomberg does not approve, endorse, review, or recommend the Invesco USD IG Corporate Bond ESG UCITS ETF. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to the Invesco USD IG Corporate Bond ESG UCITS ETF.

    Invesco Global High Yield Corporate Bond ESG UCITS ETF Acc, Dist, GBP PfHdg Dist, EUR PfHdg Acc: BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. MSCI is a trademark and service mark of MSCI Inc. (collectively with its affiliates, “MSCI”), used under license. Bloomberg Finance L.P. and its affiliates (collectively, “Bloomberg”), including Bloomberg Index Services Limited, the index administrator (“BISL”), or Bloomberg’s licensors, including MSCI, own all proprietary rights in the Bloomberg MSCI Global High Yield Liquid Corporate ESG Weighted SRI Bond Index. Neither Bloomberg nor MSCI is affiliated with Invesco, and neither Bloomberg nor MSCI approves, endorses, reviews or recommends the Invesco Global High Yield Corporate Bond ESG UCITS ETF. Neither Bloomberg nor MSCI guarantees the timeliness, accurateness or completeness of any data or information relating to Bloomberg MSCI Global High Yield Liquid Corporate ESG Weighted SRI Bond Index, and none shall be liable in any way to Invesco, investors in the Invesco Global High Yield Corporate Bond ESG UCITS ETF or other third parties in respect of the use or accuracy of the Bloomberg MSCI Global High Yield Liquid Corporate ESG Weighted SRI Bond Index or any data included therein.

    For the full objectives and investment policy please consult the current prospectus.

    Invesco Investment Management Limited, Ground Floor, 2 Cumberland Place, Fenian Street, Dublin 2, Ireland. Regulated by the Central Bank in Ireland.

    EMEA3612909/2024