Invesco Global Active ESG Equity UCITS ETF

Investment rationale

This fund is an actively managed global equity UCITS ETF designed to seek superior risk-adjusted returns over the long term versus global equity markets while applying defined ESG criteria. It has a summary risk indicator of 4 out of 7 and a recommended holding period of 5 years, which positions it for investors seeking long-term capital growth and who accept medium risk with no capital protection. The share class is accumulating, so income is reinvested to grow capital. It combines active stock selection, ESG screening, and factor exposure to value, quality and momentum.

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How the strategy works

The fund’s objective is to achieve a long-term return in excess of the MSCI World Index by investing in an actively managed portfolio of global equities that meets defined environmental, social and governance criteria. It invests in shares of companies from developed markets worldwide, with eligible stocks screened using exclusion criteria tied to controversial business activities or ESG controversies and a best-in-class approach within each industry. The MSCI World Index also informs portfolio construction: it is used to assess expected risk and returns, and the fund applies tracking-error targets and limits on sector, country and individual-stock exposure. The fund is actively managed and does not seek to track the index. The fund is USD-denominated, unhedged, may use derivatives to manage risk, reduce costs or generate additional capital or income, may engage in securities lending, and this share class accumulates income; the recommended holding period is 5 years.

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Investment philosophy

• The portfolio starts with a developed-market global equity universe, and eligible stocks are screened for compliance with the fund’s ESG criteria, including exclusion criteria based on controversial business activities or ESG controversies and a best-in-class selection within industries.

• Stocks that pass the ESG screen are scored on three stated investment factors: value, quality and momentum; value refers to companies perceived to be inexpensive versus market averages, quality to stronger balance sheets, and momentum to historical share price performance or earnings growth exceeding market averages.

• The fund holds a sub-set of these stocks selected through an optimisation process that seeks to maximise exposure to those factors while targeting a risk profile consistent with the investment objective; the quantitative investment model uses mathematical, logical and statistical techniques for stock selection.

• The portfolio construction process also aims to reduce revenue-based carbon emissions intensity by at least 50% versus the benchmark and implements a self-decarbonisation constraint targeting a 7% year-on-year reduction in funded carbon emissions intensity; holdings are rebalanced monthly.

• As of 31 August 2026, the fund held 209 securities, with 70.7% in the United States and 8.1% in Japan; sector weights were led by information technology at 29.7%, financials at 21.7% and industrials at 14.5%, while the largest holdings were NVIDIA at 6.17%, Alphabet Class A at 4.35% and Microsoft at 3.42%.

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Distinctive features

The fund combines active management with an ETF structure and an ongoing charge of 0.30% per year. Its approach integrates ESG screening with a quantitative multi-factor process focused on value, quality and momentum, rather than simply tracking an ESG index. It also includes explicit carbon objectives in portfolio construction, targeting at least a 50% reduction in revenue-based carbon intensity versus the benchmark and a 7% annual self-decarbonisation pathway. At 31 August 2026, the fund had USD 3,453.89 million in assets and held 209 stocks, providing broad developed-market equity exposure through an actively managed portfolio.

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Risks

The fund has a summary risk indicator of 4 out of 7, described as a medium risk class, and it does not provide capital protection, so investors could lose some or all of their investment. The value of equities and equity-related securities can be affected by issuer results and by general and regional economic and market conditions, which can cause fluctuations in fund value. Currency risk is present because the fund is unhedged and its performance may be adversely affected by exchange-rate movements between the fund’s USD base currency and the currencies to which it is exposed. Additional named risks include securities lending counterparty risk, specifically the borrower failing to return securities and collateral being hard to sell after default, as well as the risk that ESG criteria restrict issuer exposure and cause the fund to forgo opportunities or underperform funds that do not use ESG ratings.

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Asset manager

The fund is a sub-fund of Invesco Markets II plc and is managed by Invesco Investment Management Limited, part of the Invesco Group. The investment manager is Invesco Capital Management LLC. The fund is domiciled in Ireland and is authorised in Ireland, with Invesco Investment Management Limited regulated by the Central Bank of Ireland.

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