Invesco has announced the launch of its latest ETF, the Invesco MSCI Global North America Climate ETF (KLMN).
Crucially, Invesco reports that KLMN’s launch has broken the global record for funding for a global ETF launch. This launch funding came from Finnish pension issuer Varma, which invested roughly $ 2.4 billion in assets.
KLMN has a net expense ratio of 0.09%. The fund looks to provide similar results to that of the MSCI Global Climate 500 North America Selection Index. The MSCI Global Climate 500 North America Selection Index was designed by MSCI in collaboration with Varna.
“I am grateful to work with MSCI, a leading global index provider, as well as Invesco, one of the world’s largest asset managers, to break new ground on the launch of KLMN,” said Timo Sallinen, Varma’s head of Listed Securities. “Our record-breaking $2.4 billion investment in the North American tilt of KLMN aligns with our investment in the global KLMT ETF, which launched earlier this [year. It provides] us with a flexible way to allocate to our precise geographical and responsible investing needs.”
An Indexed Approach
This MSCI index starts by screening for North American companies that are within the MSCI ACWI Select Climate 500 Index. These MSCI climate indexes target companies that offer less exposure to climate change risks.
Companies within these indexes are scrutinized based on a variety of ESG factors, including carbon and greenhouse gas emissions. Country and sector weighting within these indexes is subject to a cap.
As of October 31, 2024, the MSCI Global Climate 500 North American Index contains 282 constituents. These companies possess market caps that range between about $13.4 billion to $3.4 trillion.
“We are excited to collaborate once again with MSCI and Varma on a newly developed index and ETF that will allow Varma to easily execute a large allocation that aligns precisely with their investment views,” added Brian Hartigan, global head of ETFs & Index Investments. “Invesco is in a rare position to service global, institutional clients who want to leverage the liquidity and efficiency of ETFs to target important allocations in their investment portfolios.”
“There remains demand for targeted ESG strategies and the ETF wrapper is a great vehicle to gain such exposure. It’s great to see Invesco and MSCI partnering on this initiative,” said Todd Rosenbluth, head of research at VettaFi.
With over 230 ETFs listed in the U.S., Invesco has a storied history in piloting a variety of fund strategies. One of the largest Invesco funds, the Invesco S&P 500 Quality ETF (SPHQ), has over $12 billion in assets under management.
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