ETFs
Invesco launches climate-focused global equity ETF
KLMT aims to give investors access to investment results similar to those of the MSCI AWI Select Climate 500 Index. The fund has a low net expense ratio of 0.10%.
The MSCI AWI Select Climate 500 Index is a subset of the MSCI AWI Index. This climate-focused index tracks approximately 500 global equity companies within the MSCI AWI that have specific climate and environmental criteria. As of May 31, 2024, the fund’s prospectus indicates that the market capitalization of the index’s constituents was between approximately $5 trillion and $3 trillion.
By considering which assets to include, the index aims to minimize exposure to physical and transition risks related to climate change. This includes assets that meet annual revenue-related greenhouse gas emissions reduction targets. Qualified securities must also achieve an overall weighting for approved carbon emissions reduction targets.
To track the underlying index, KLMT uses a full replication methodology. In doing so, the fund will invest in virtually all index constituents, in proportion to the index weighting.
KLMT will only focus the fund’s investments to the same extent as the MSCI AWI Select Climate 500 Index. As of May 31, 2024, the index had particular exposure to the information technology sector. However, the fund’s prospectus notes that KLMT’s overall investments and concentrations are likely to change over time.
“Invesco is at the forefront of ETF innovation. It’s great to see them expand their robust lineup of clean energy ETFs with a new climate-focused offering that allows investors to capitalize on the ongoing energy transition,” added Kirsten Chang, senior industry analyst at VettaFi.
With the launch of KLMT, Invesco has more than 220 U.S.-listed ETFs. In total, these funds represent more than $500 billion in assets under management.