Investor demand is behind Invesco’s new sustainably centered additions to its innovation suite, its head of ETFs says.
With the agency’s in style QQQ ETF crossing $200 billion in belongings within the final month, its latest merchandise purpose to grab on two scorching themes: tech and environmental, social and governance investing.
Launched in late October, the Invesco ESG Nasdaq 100 ETF (QQMG) and Invesco ESG Nasdaq Subsequent Gen 100 ETF (QQJG) will function sustainable counterparts to Invesco’s Nasdaq 100 ETF (QQQM) and its Nasdaq Subsequent Gen 100 ETF (QQQJ). QQQM and QQQJ have raised a mixed $4 billion within the final 12 months.
“To keep up optionality, we introduced within the ESG variations of these indexes the place efficiency is extremely aligned with the mom index, so to talk … however firms are rewarded for exhibiting good ESG habits,” Invesco’s head of ETFs and listed methods, Anna Paglia, informed CNBC’s “ETF Edge” on Monday.
The important thing to future progress might be true and correct advertising and marketing, Paglia stated. She added that U.S. ESG merchandise might see the identical explosive progress as in Europe, the place sustainable ETFs and mutual funds now account for 81% of recent flows.
“This can be a market that’s going to proceed to develop as a result of it’s enticing to the institutional viewers and the retail viewers at this time,” she stated.
Given the curiosity, 2021 might show to be the strongest yr for ESG in a very long time, Dave Nadig, chief funding officer and director of analysis at ETF Developments, stated in the identical interview.
“By the point we get to the top of the yr, I think about … one thing like 4 or 5% of the flows may have been into ESG-related merchandise,” Nadig stated. “On the identical time, now we have only a flood of recent merchandise.”
ESG ETF and exchange-traded product launches all over the world raked in a file $119 billion in web inflows within the first 9 months of this yr, in accordance with analysis agency ETFGI.
Although Nadig expects “light-touch regulation” figuring out what does and doesn’t represent ESG down the road, for now, the curiosity is simple.
“A variety of these merchandise are coming to market on the request of establishments which might be making giant allocations,” Nadig stated. “Many of those launches right here have come out of the gate with huge belongings from establishments. So whether or not you as a retail investor are focused on these merchandise is as much as you. The institutional market? They’re voting with their pockets.”
Disclosure: Invesco is the sponsor of CNBC’s “ETF Edge.”
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