Invesco relaunches Pan European Structured Equity Fund with ESG focus
Invesco has relaunched the Invesco Pan European Structured Equity Fund which will now have ESG embedded in its strategy and will be renamed the Invesco Sustainable Pan European Structured Equity Fund to reflect this change.
The Invesco Pan European Structured Equity Fund, which has been managed within the European Low Volatility strategy for 15 years, has aimed to achieve long-term capital appreciation by investing at least two thirds of its total assets in a diversified portfolio of European equities.
However, the newly named Invesco Sustainable Pan European Structured Equity Fund, which is managed by Thorsten Paarmann and Alexander Uhlmann in Frankfurt, will have embedded explicit ESG (environmental, social and governance) criteria into the existing factor-based style for which the strategy is known. The Fund will take a quantitative approach to investing inside an ESG framework with the aim to achieve superior risk-adjusted returns, from intended factors Momentum, Quality, Value and Low Volatility.
The approach will involve a strict application of ESG metrics, leading to the exclusion of around 40 per cent of ESG laggards from the managers’ investment universe. It will exclude stocks engaged in controversial activities, such as those involved in fossil energy sources, weapons and nuclear power, and also apply best-in-class screening to highlight energy transition measures for the stocks making the most progress in this area. A focus on greenhouse gas intensity reduction relative to the benchmark also means the Fund has a greener footprint and reduces the risk of stranded assets, such as pure-play energy stocks. This will result in a large-cap blend Fund, providing equity market exposure in an ESG framework, which will meet the Article 8 Sustainable Finance Disclosure Regulation classification.
Thorsten Paarmann and Alexander Uhlmann will be supported by the Invesco Quantitative Strategies team who have been offering ESG integration in products for over 20 years and have integrated it in all layers of the investment process since 2018.
Thorsten Paarman fund manager, says: “Research and evolution is at the heart of what we do at Invesco Quantitative Strategies (IQS) and has been for more than 30 years. As our research deepens, we constantly evolve alongside our clients, believing there are new risks and opportunities that can provide better protection to the Fund. This is why we’ve made the decision to make changes to the Fund’s strategy and to embed ESG criteria explicitly into the existing process.”
Invesco recognises that ESG matters greatly to many of our clients, communities and stakeholders. And it matters to us. Our fundamental belief is that ESG investing is an essential part of the solution to a sustainable future. Learn more about how we are acting on this belief, here.
Invesco has committed to supporting and adhering to the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, and we are investing in companies that are allocating capital towards the energy transition.