You can gain exposure to corporate bonds from issuers meeting strict ESG criteria
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.
Note:
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. 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 https://www.invescomanagementcompany.ie/dub-manco
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:
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.
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.
In collaboration with Invesco’s Quantitative Strategies team, we offer three actively managed fixed income ETFs. In the Euro corporate bond space, we offer two multi-factor ESG ETFs, providing a choice of full maturity or short duration exposure. These ETFs use a factor-based approach to balance yield and ESG integration. The portfolio is generated by combining three factors: Low Volatility – higher credit quality and/or shorter maturity providing more stability; Value – bonds that are cheap relative to similar securities; and Carry – bonds with wider spreads.
Alternatively, for those seeking exposure to ESG solutions in the European government bond space, we offer the EUR Government and Related Green Transition Bond ETF. This ETF seeks to maximise exposure to Green Bonds, subject to exposure and liquidity considerations.
Applicable to all: For complete information on risks, refer to the legal documents. Value fluctuation Credit risk, Interest rates, Debt instruments, Environmental, social and governance.
Invesco EUR Government and Related Green Transition Bond UCITS ETF, Invesco EUR Corporate Bond ESG Multi-Factor UCITS ETF & Invesco EUR Corporate Bond ESG Short Duration Multi-Factor UCITS ETF only: Use of derivatives for investment purposes, Environmental, social and governance.
Invesco EUR Government and Related Green Transition Bond UCITS ETF, Invesco EUR Corporate Bond ESG Multi-Factor UCITS ETF, Invesco EUR Corporate Bond ESG Short Duration Multi-Factor UCITS ETF & Invesco Corporate Bond ESG UCITS ETFs only: Credit risk, Interest rates.
Invesco Quantitative Strategies ESG Global Equity Multi-Factor UCITS ETF, Invesco EUR Corporate Bond ESG Multi-Factor UCITS ETF, Invesco EUR Corporate Bond ESG Short Duration Multi-Factor UCITS ETF only: Currency.
Invesco EUR Government and Related Green Transition Bond UCITS ETF: Securities lending, Green Bond Risk.
Invesco Corporate Bond ESG UCITS ETFs, Invesco Quantitative Strategies ESG Global Equity Multi-Factor UCITS ETF only: Concentration. Investment Risks.
Invesco High Yield Corporate Bond ESG UCITS ETFs only: Non-investment grade securities Risk/High yield debt instruments.
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.
Monthly fixed income update
June saw a resurgence in political risks with a snap election called in France, the upcoming general election for the UK, and the first televised debate between Trump and Biden ahead of the presidential election in the US. Read our latest thoughts on how fixed income markets performed during the month and what we think you should be looking out for in the near term.
Invesco’s Fixed Income ETFs
ETFs can offer convenient access to broad and diversified baskets of bonds at a low cost. Discover our range of fixed income ETFs.
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Value fluctuation - 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.
Credit risk - 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.
Interest rates - Changes in interest rates will result in fluctuations in the value of the fund.
Debt instruments - Debt instruments are exposed to credit risk which relates to the ability of the borrower to repay the interest and capital on the redemption date.
Environmental, social and governance - 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 EUR Government and Related Green Transition Bond UCITS ETF, Invesco EUR Corporate Bond ESG Multi-Factor UCITS ETF & Invesco EUR Corporate Bond ESG Short Duration Multi-Factor UCITS ETF only:
Use of derivatives for investment purposes: This fund may use derivatives for investment purposes. The use of such complex instruments may impact the magnitude and frequency of the fluctuations in the value of the fund.
Environmental, social and governance: 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 EUR Government and Related Green Transition Bond UCITS ETF, Invesco EUR Corporate Bond ESG Multi-Factor UCITS ETF, Invesco EUR Corporate Bond ESG Short Duration Multi-Factor UCITS ETF & Invesco Corporate Bond ESG UCITS ETFs only:
Credit risk: 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.
Interest rates: Changes in interest rates will result in fluctuations in the value of the fund.
Invesco High Yield Corporate Bond ESG UCITS ETFs only:
Non-investment grade securities Risk/High yield debt instruments: 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.
Invesco Quantitative Strategies ESG Global Equity Multi-Factor UCITS ETF, Invesco Quantitative Strategies Global Equity Low Volatility Low Carbon UCITS ETF, Invesco EUR Corporate Bond ESG Multi-Factor UCITS ETF, Invesco EUR Corporate Bond ESG Short Duration Multi-Factor UCITS ETF only
Currency: The Fund’s performance may be adversely affected by variations in the exchange rates between the base currency of the Fund and the currencies to which the Fund is exposed.
Invesco EUR Government and Related Green Transition Bond UCITS ETF:
Securities lending: The Fund may be exposed to the risk of the borrower defaulting on its obligation to return the securities at the end of the loan period and of being unable to sell the collateral provided to it if the borrower defaults.
Green Bond Risk: The Fund invests in Green Bonds which means the Fund will be more affected by the performance of Green Bonds than a fund that is more diversified across the bond market. The market for Green Bonds and related regulation is evolving. The current accepted market standard definitions of “green” may change over time and in such event, the Fund may change the definition of Green Bonds that is applied by the Fund.
Invesco Corporate Bond ESG UCITS ETFs, Invesco Quantitative Strategies ESG Global Equity Multi-Factor UCITS ETF only:
Concentration: 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.
Data as at 30 April 2024, unless otherwise stated.
By accepting this material, you consent to communicate with us in English, unless you inform us otherwise. Views and opinions are based on current market conditions and are subject to change. 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 www.invesco.eu. A summary of investor rights is available in English from www.invescomanagementcompany.ie. The management company may terminate marketing arrangements.
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.
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.
For the full objectives and investment policy please consult the current prospectus.
German investors may obtain the offering documents free of charge in paper or electronic form from the issuer or from the German information and paying agent (Marcard, Stein & Co AG, Ballindamm 36, 20095 Hamburg, Germany).
The publication of the supplement in Italy does not imply any judgment by CONSOB on an investment in a product. The list of products listed in Italy, and the offering documents for and the supplement of each ETF are available: (i) at etf.invesco.com (along with the audited annual report and the unaudited half-year reports); and (ii) on the website of the Italian Stock Exchange borsaitaliana.it.
No action has been taken or will be taken in Israel that would permit a public offering of the Fund or distribution of this document to the public. This Fund has not been approved by the Israel Securities Authority (the ISA). The Fund shall only be sold in Israel to an investor of the type listed in the First Schedule to the Israeli Securities Law, 1968, who in each case have provided written confirmation that they qualify as Sophisticated Investors, and that they are aware of the consequences of such designation and agree thereto and further that the Fund is being purchased for its own account and not for the purpose of re-sale or distribution other than, in the case of an offeree which is an Sophisticated Investor, where such offeree is purchasing product for another party which is an Sophisticated Investor. This document may not be reproduced or used for any other purpose, nor be furnished to any other person other than those to whom copies have been sent. Nothing in this document should be considered investment advice or investment marketing as defined in the Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 1995 (“the Investment Advice Law”). Neither Invesco Ltd. nor its subsidiaries are licensed under the Investment Advice Law, nor does it carry the insurance as required of a licensee thereunder. This document does not constitute an offer to sell or solicitation of an offer to buy any securities or fund units other than the fund offered hereby, nor does it constitute an offer to sell to or solicitation of an offer to buy from any person in any state or other jurisdiction in which such offer or solicitation would be unlawful, or in which the person making such offer or solicitation is not qualified to do so, or to a person to whom it is unlawful to make such offer or solicitation
This product is offered in Belgium under the Public Offer Exemption. This material is intended only for professional investors and may not be used for any other purpose nor passed on to any other investor in Belgium.
Switzerland: Issued by Invesco Asset Management (Schweiz) AG, Talacker 34, 8001 Zurich, Switzerland. The representative and paying agent in Switzerland is BNP PARIBAS, Paris, Zurich Branch, Selnaustrasse 16 8002 Zürich. The Prospectus, Key Information Document, and financial reports may be obtained free of charge from the Representative. The ETFs are domiciled in Ireland.
EMEA3566090/2024
