The index is constructed by first excluding securities in industries such as adult entertainment, alcohol, article oil and gas exploration, among more; then removing those that do no comply with the principles of the UN Global Compact or have a high controversy score and finally removing those that have a high ESG risk rating.
Each eligible security is then reweighted by a factor of its market capitalisation and Sustainalytics ESG Risk Rating Score. The index is reconstructed and rebalanced quarterly.
In its latest construction only six stocks were removed from the parent index. Invesco said the weighting methodology “improved the already low ESG Risk Rating by 10%”.
The SFDR Article 8 ETF will have an ongoing charge of 0.25%.
Anna Paglia, global head of ETFs and indexed strategies at Invesco, said: “Invesco has been fortunate to work in lockstep with Nasdaq for over two decades, finding beneficial ways to bring investors all over the globe access to Nasdaq-listed companies.
“Today’s launch celebrates 15 years since we began working with Nasdaq on ESG products. We are confident that the new Invesco NESG will bridge innovation and ESG to help investors meet their investment outcomes.”
NESG is the third ETF launched by Invesco this year offering investors access to Nasdaq’s innovation-led indices. This March, Invesco launched its Nasdaq Next Generation 100 UCITS ETF and a swaps-based version of the flagship EQQQ Nasdaq-100 UCITS ETF, which was launched in 2002 and now has $6.3bn of assets under management.