Invesco has launched a trio of innovation-focused ETFs, which target AI, cybersecurity, and defence innovation.
The new ETFs include the Invesco Artificial Intelligence Enablers UCITS ETF, which targets holdings that contribute to AI growth; the Invesco Cybersecurity UCITS ETF, holding cybersecurity companies; and the Invesco Defence Innovation UCITS ETF, holding companies developing weapons, defensive systems, or other means of border security.
The AI and cybersecurity funds are both classified as SFDR Article 8 while the defence fund is Article 6. All three will have an annual charge of 0.35%
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Invesco’s new range will follow indices created by Kensho, using its natural language processing screen to identify companies that fall within these themes, and then pass to a team of analysts for further assessment. Companies will be sorted into “core” or “noncore” based on if the business is solely focused on the theme or plays a contributing factor. “Core” businesses will be given a heavier weighting.
Kensho will apply an ESG screen to the AI and cybersecurity indices, eliminating businesses that are non-compliant with the United Nations Global Compact, have controversial business activities or score in the bottom 10% of its ESG rating for all in the S&P Global BMI Index.
Gary Buxton, head of EMEA and APAC ETFs at Invesco, said: “While the potential of AI has really captured people’s imagination, solutions for cybersecurity and defence are now gaining traction as threats emerge across the globe.
“For investors, the question is how best to capture these opportunities today and into the future. We chose to work with Kensho for their intelligent approach to applying AI but also their expertise in understanding these rapidly evolving new technologies. Plus, their being part of the S&P Global Index group should provide investors with a higher degree of confidence in the administration.”
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Chris Mellor, head of EMEA ETF equity product management at Invesco, added: “Our new thematic ETFs stand apart on several key factors. First is on cost. At 0.35% per annum, they each have the lowest – or joint lowest – annual charges among competing products. Second is on the expertise of the index provider. Finally, our ETFs emphasise those companies most involved and capable of making the greatest impact for investors.”
