Invesco, a leading asset management firm, has expanded its lineup of thematic exchange traded funds (ETFs) with the introduction of three new strategies, focusing on the burgeoning sectors of artificial intelligence (AI), cyber security, and defence. These ETFs are aligned with the benchmarks created by Kensho, a division of S&P Global Indices known for leveraging AI and other technological innovations.
The launch of the Invesco Artificial Intelligence Enablers, Cybersecurity, and Defence Innovation Ucits ETFs reflects a growing trend among asset managers to cater to investor demand for exposure to cutting-edge industries. Kensho plays a pivotal role in constructing the indices by employing natural language processing technologies to sift through companies for potential alignment with each thematic focus.
To qualify for inclusion in these indices, companies are evaluated by Kensho's analysts and categorised into "core" and "non-core". Core companies derive a significant portion of their operations and revenue from products and services closely associated with the chosen themes. In contrast, non-core companies are those that participate in the broader ecosystem by providing essential inputs, yet do not necessarily market the final products.
Invesco’s AI enablers strategy targets companies advancing the technology, infrastructure, and services that facilitate the evolution and implementation of AI. The cyber security ETF aims to invest in companies safeguarding enterprises and devices against unauthorised electronic access. Meanwhile, the defence ETF offers an outlet for investing in firms developing advanced weaponry, defensive systems, and solutions dedicated to national security.
Both the AI enablers and cyber security ETFs incorporate environmental, social, and governance (ESG) criteria, screening out companies that either partake in contentious business activities, fail to adhere to the UN Global Compact principles, or possess ESG scores ranked within the lowest 10 per cent of the S&P Global BMI Index.
Gary Buxton, who heads ETFs for regions including Europe, the Middle East, and Africa, and Asia-Pacific at Invesco, expressed their decision to collaborate with Kensho, highlighting their expertise in the judicious application of AI and understanding complex technologies. Buxton noted that affiliation with S&P Global Index instills investor confidence in these products.
Chris Mellor, the group’s head of ETF equity product management for the EMEA region, indicated that the new ETFs are uniquely distinguishable, offering investors opportunities in rapidly evolving sectors. Each ETF is subject to an annual charge of 0.35 per cent, making them competitively priced within the sector.
This strategic step by Invesco illustrates an adaptive approach to the dynamically shifting trends within global markets and the increasing appetite for investment in innovative technologies and solutions geared towards contemporary challenges in security and defence.
Source: Noah Wire Services