Invesco NASDAQ‑100 ESG

ETF description

This ETF aims to provide investors with exposure to large, innovative companies that are part of the Nasdaq‑100 Index, but with an additional focus on environmental, social, and governance (ESG) factors. The Nasdaq‑100 Index is known for including many technology and growth‑oriented companies, often recognized for their market leadership and innovation. However, this ETF filters the companies in the index based on their ESG practices, meaning it includes businesses that meet certain sustainability and ethical standards.

For investors who are interested in high‑growth sectors such as technology, healthcare, and consumer services, this ETF could be appealing. It allows them to participate in the potential growth of some of the largest and most dynamic companies, while also considering how those companies address issues like environmental impact, social responsibility, and corporate governance.

Issuer details

Invesco is one of the world’s largest ETF providers with over US$680 billion globally in ETF assets under management (as at 31 March 2024). It offers over 140 EMEA ETFs spanning regions and strategies across equities, fixed income and commodities.

Its culture of innovation lets it find new opportunities for investors, as well as ways to improve the performance of core ETF exposures.

Index details

The Nasdaq 100 ESG index is designed to reflect the performance of companies in the Nasdaq‑100 Index (the ‘Parent Index’) that meet specific ESG criteria. Companies are evaluated and weighted on the basis of their business activities, controversies and ESG Risk Ratings.

The Reference Index is constructed by first excluding securities that: (1) are involved in adult entertainment, alcohol, arctic oil and gas exploration, recreational cannabis, controversial weapons, gambling, military weapons, nuclear power, oil and gas, oil sands, riot control, shale energy, small arms, thermal coal or tobacco; (2) do not comply with the principles of the UN Global Compact or have a high Sustainalytics controversy score; or (3) have a high Sustainalytics ESG Risk Rating or are not yet rated.

Each of the eligible securities is then assigned a weighting factor based on its respective Sustainalytics ESG Risk Rating Score, which is applied to re‑weight the eligible securities using their market value in the Parent Index to calculate the weighting of the Reference Index. The Reference Index is reconstructed and rebalanced on a quarterly basis.