Invesco launches three thematic ETFs capturing powerful long-term trends

Invesco is launching three thematic ETFs to provide investors targeted access to the powerful long-term trends of artificial intelligence (AI), cybersecurity and defence. Each of the new Invesco ETFs will follow innovative global benchmarks constructed by Kensho, the specialist branch of S&P Global Indices with expertise in the application of AI and other next generation technologies.

• The Invesco Artificial Intelligence Enablers UCITS ETF will target companies that are focused on developing and enabling the technology, infrastructure, and services propelling the growth and functionality of AI.
• The Invesco Cybersecurity UCITS ETF will target companies that are focused on protecting enterprises and devices from unauthorised access via electronic means.
• The Invesco Defence Innovation UCITS ETF will target companies that are developing sophisticated weapons, defensive systems and other solutions for securing borders.

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.”

Each index is constructed from a global universe of stocks. Kensho uses natural language processing (“NLP”) as an initial screen to identify companies with potential exposure to key concepts associated with each theme. Kensho’s analysts further assess each of the companies identified and assign theme exposures accordingly.

The indices for the Artificial Intelligence Enablers and Cybersecurity themes apply ESG screens to remove companies that either are involved in certain controversial business activities, do not comply with the principles of the United Nations Global Compact or have ESG scores that fall into the bottom 10% of the S&P Global BMI Index. 

Chris Mellor, Head of EMEA ETF Equity Product Management at Invesco, explained: “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.”

The eligible companies identified and assessed by Kensho’s analysts are separated into two categories. Companies classified as “Core” are those with a significant portion of their business operations and/or revenues deriving from products and services aligned with the theme. “Non-Core” companies are those operating across the broader value chain of the theme providing vital inputs such as critical subcomponents to the end-products aligned to the theme, but not focusing on delivering these end-products themselves.

An overweight factor is applied to the group of Core securities to enhance the overall exposure to these stocks and emphasise pure play innovation. Within each group, companies are equally weighted subject to diversification and liquidity constraints.

These three new ETFs expand Invesco’s thematic offerings, which include ETFs targeting global blockchain, biotech and clean energy technologies.

ETF details