REG - Invesco Markets II - Notice to Shareholders

Euronext NVAnnouncement

28/03/2025 12:30

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RNS Number : 7272C  Invesco Markets II PLC  28 March 2025

 

 

Invesco Markets II Plc

Ground Floor, 2 Cumberland Place, Fenian Street, Dublin 2, D02 H0V5, Ireland

 

Telephone/Switchboard +44 (0)20 3370 1100 etf.invesco.com

28 March 2025

 

 

NOTICE TO SHAREHOLDERS

 

 

RE: Index methodology changes, and change of fund name and index name

 

 Fund Name (Funds)                                       Share Class                    ISIN
 Invesco EUR IG Corporate Bond ESG UCITS ETF             Dist                           IE00BF51K249
 Invesco GBP Corporate Bond ESG UCITS ETF                Dist                           IE00BKW9SV11
 Invesco Global Corporate Bond ESG UCITS ETF             Dist                           IE000FVQW7E7 IE000P2WSBY0

                                                         GBP PfHdg Acc
 Invesco Global High Yield Corporate Bond ESG UCITS ETF  Acc Dist                       IE0001VDDL68 IE000ZWSN3F7

                                                         EUR PfHdg Acc GBP PfHdg Dist   IE000XG0ZRI7 IE00020C1NS6
 Invesco USD IG Corporate Bond ESG UCITS ETF             Dist                           IE00BF51K025 IE00BJ06C481

                                                         GBP Hdg Dist

 

(each a "Fund" and together the "Funds") Dear Shareholder,

This notice is to inform you of proposed changes to the Funds, each a sub-fund
of Invesco Markets II plc (the "Company"), to meet the requirements of ESMA's
guidelines on funds' names using ESG or sustainability-related terms (the
"Guidelines").

 

1.             Reference Index methodology changes (except Invesco GBP Corporate Bond ESG UCITS ETF)

The Funds currently include "ESG" in their names and, in accordance with the
Guidelines, will be required to (i) meet an 80% threshold linked to the
proportion of investments used to meet the environmental and social
characteristics of the fund; and (ii) incorporate the exclusions referred to
in Article 12(1)(a) - (g) of Commission Delegated Regulation (EU) 2020/1818
(the "PAB exclusions"), from 21 May 2025.

 

To ensure that the Funds can continue to use "ESG" in their names whilst also
seeking to ensure that any changes to the Reference Index used by each Fund
does not negatively impact the performance or tracking error of the Funds
compared to the relevant parent index, it has been determined not to
incorporate PAB exclusions but rather, following consultation, the Index
Provider has determined it appropriate to introduce the following changes to
the methodology for each Reference Index:

·      Incorporating Climate Transition Benchmarks (CTB) criteria by
aligning the existing exclusionary criteria with CTB requirements detailed in
Article 12(1)(a) - (c) of Commission Delegated Regulation (EU) 2020/1818 (the
"Climate Benchmarks Regulation") and including a decarbonisation pathway
aligned with the CTB requirements under the Climate Benchmarks Regulation; and

·      Renaming each Reference Index to make reference to the transition
nature of the Reference Index.

 

As further detailed below, the proposed change of name of each Reference Index
will be reflected in a change of name of each Fund, meaning that each Fund
will use a "transition-related" term. In accordance with the Guidelines, a
fund using a "transition-related" term will be required to: (i) meet an 80%
threshold linked to the proportion of

investments used to meet the environmental and social characteristics of the
fund; (ii) incorporate the CTB exclusions under the Climate Benchmarks
Regulation; and (iii) be on a clear and measurable path to social or
environmental transition. If a fund name uses an ESG-related term as well as a
"transition-related" term, the fund does not need to incorporate the PAB
exclusions.

 

The Manager has reviewed the changes to Reference Indices proposed by the
Index Provider and has determined that the changes are sufficient to meet the
requirements of the Guidelines. As a result of tracking the relevant Reference
Index, each Fund will comply with the Guidelines' requirements for use of a
"transition-related" term in its name.

2.             Fund and Reference Index name changes (excluding Invesco GBP Corporate Bond ESG UCITS ETF)

 

It is proposed to amend the name of each Fund to reflect the proposed new name
of its Reference Index, as follows:

 

 Current Index Name                                                              Proposed Index Name
 Bloomberg MSCI Global Liquid Corporate ESG Weighted SRI Sustainable Bond Index  Bloomberg MSCI Global Liquid Corporate Climate Transition ESG Bond Index
 Bloomberg MSCI Euro Liquid Corporate ESG Weighted SRI Index                     Bloomberg MSCI Euro Liquid Corporate Climate Transition ESG Bond Index
 Bloomberg MSCI Global High Yield Liquid Corporate ESG Weighted SRI Bond Index   Bloomberg MSCI Global High Yield Liquid Corporate Climate Transition ESG Bond
                                                                                 Index
 Bloomberg MSCI USD Liquid Corporate ESG Weighted SRI Index                      Bloomberg MSCI USD Liquid Corporate Climate Transition ESG Bond Index

 

 Current Fund Name                                       Proposed Fund Name
 Invesco Global Corporate Bond ESG UCITS ETF             Invesco Global Corporate Bond ESG Climate Transition UCITS ETF
 Invesco EUR IG Corporate Bond ESG UCITS ETF             Invesco EUR IG Corporate Bond ESG Climate Transition UCITS ETF
 Invesco Global High Yield Corporate Bond ESG UCITS ETF  Invesco Global High Yield Corporate Bond ESG Climate Transition UCITS ETF
 Invesco USD IG Corporate Bond ESG UCITS ETF             Invesco USD IG Corporate Bond ESG Climate Transition UCITS ETF

 

3.             Supplement changes to align to index methodology changes (excluding Invesco GBP Corporate Bond ESG UCITS ETF)

 

In addition to reflecting changes to the Funds' and Reference Indices' names
and the description of the Reference Indices in each Supplement, it is
proposed to make the following additional amendments to reflect the
re-positioning of the Funds as being "transition-related":

 

a.     Environmental and social characteristics

 

As the Funds attain their environmental and social characteristics by tracking
their Reference Indices, it is proposed that these characteristics are aligned
with the amended Reference Index methodologies and that they include reference
to the clear and measurable path to environmental transition as required by
the Guidelines, as follows:

 

"The environmental characteristics promoted by the Fund are to gain exposure
to issuers demonstrating a robust ESG (environmental, social and governance)
profile, i.e. issuers with limited/no involvement in certain business
activities, with a more favourable ESG rating compared to similar issuers and
with no involvement in severe ESG controversies, each as detailed below;
whilst also reducing the fund's overall exposure to risks arising from a
transition to a lower- carbon economy, by lowering exposure to carbon
intensive issuers or industries. The Fund achieves this by tracking the
Reference Index, which has a methodology that is aligned with attaining the
environmental and social characteristics promoted by the Fund.

 

The Reference Benchmark is constructed to achieve the minimum standards for an
EU Climate Transition Benchmark, including targeting a reduction of greenhouse
gas (GHG intensity) by at least 7% per annum (the "Decarbonisation Target").
The Fund aims to attain the Decarbonisation Target and will measure its
attainment of this once per year against the anchor date of the Reference
Index (the "Trajectory Anchor Date"). The attaining of the Decarbonisation
Target by the Fund on at least an annual basis is the clear and measurable
path to environmental transition."

As a result of the Funds employing a sampling strategy in tracking their
Reference Indices, the Funds will measure their attainment of the 7%
decarbonisation target referred to in the Climate Benchmarks Regulation on an
annual basis.

 

b.     Sustainable Investment approach

It is proposed to also align the Funds' approach to measuring sustainable
investment with the amended Reference Index methodologies such that the
objective to which sustainable investments will contribute will be "the
objective of reducing exposure to risks arising from a transition to a
lower-carbon economy by lowering exposure to carbon

intensive companies or industries (such risks include increased cost of doing
business, regulatory actions, such as carbon taxes and changes in market
preferences, such as consumers shifting purchases towards low carbon
products)".

 

As a result, the Funds' minimum commitment to sustainable investments will
increase, as follows:

 

 Fund                                             Current       (%       of Fund's NAV)              Proposed (% of Fund's NAV)
 Invesco EUR IG Corporate Bond ESG UCITS ETF      10                                                 80
 Invesco USD IG Corporate Bond ESG UCITS ETF      10                                                 80
 Invesco Global Corporate Bond ESG UCITS ETF      10                                                 80
 Invesco High Yield Corporate Bond ESG UCITS ETF  10                                                 70

 

4.             Invesco GBP Corporate Bond ESG UCITS ETF

 

In relation to Invesco GBP Corporate Bond ESG UCITS ETF, the Index Provider is
not proposing the same changes to the index methodology as outlined and
instead proposes to change the name of the Reference Index to remove reference
to "ESG". It is therefore proposed to amend the Supplement to change the name
of the Fund to reflect the proposed name of the Reference Index, as follows:

 

 Current Index Name                                               Proposed Index Name
 Bloomberg MSCI Sterling Liquid Corporate ESG Weighted SRI Index  Bloomberg MSCI Sterling Liquid Corporate Screened & Tilted Index

 

 Current Fund Name                         Proposed New Fund Name
 Invesco GBP Corporate Bond ESG UCITS ETF  Invesco GBP Corporate Bond Screened & Tilted UCITS ETF

 

The changes will take effect on or around 1 May 2025. Further details of the
changes to the Reference Indices can be found here:
https://assets.bbhub.io/professional/sites/27/Consultation-Results-on-proposed-methodology-changes-for-certain-
Bloomberg-MSCI-Indices.pdf.

 

None of the changes outlined in this notice are expected to have a material
impact on the Funds.

 

Next steps

The Supplements will be amended to reflect the proposed changes on or around 1
May 2025.

 

Should you wish to redeem your shareholding as a result of the changes, you
may do so in accordance with the dealing provisions outlined in the
Prospectus.

 

 

General

Shareholders may obtain the Prospectus, the key investor information document,
the latest annual and semi-annual reports and copies of the constitution of
the Company free of charge from the registered office of the Manager or the
local representatives in the countries where the Company is registered as well
as from the German information agent, Macard Stein & Co AG, Ballindamm 36,
20095 Hamburg, Germany and on the website of the Company - etf.invesco.com or
- limited to the Prospectus, the key investor information documents - on the
website of the relevant stock exchange where the Shares are listed (for Italy,
on the website of Borsa Italiana S.p.a. www.borsaitaliana.it).
(http://www.borsaitaliana.it/) In Switzerland, the Prospectus, the key
investor information documents, the latest annual and semi-annual reports and
copies of the M&A may be obtained free of charge from the Swiss
Representative, Invesco Asset Management (Schweiz) AG, Talacker 34, 8001
Zurich. BNP Paribas Securities Services, Paris, succursale de Zurich,
Selnaustrasse

 

 

Directors: Gary Buxton (British/Irish), Deidre Gormley, Sarah (Katy) Walton
Jones (British), Lisa Martensson (Swedish)

Invesco Markets II plc, registered in Ireland as an open-ended variable
capital umbrella investment company with limited liability and segregated
liability between sub-funds.

 

Registered number: 567964. Registered office: Ground Floor, 2 Cumberland
Place, Fenian Street, Dublin 2, D02 H0V5, Irelan

16, 8002 Zurich will act as the Swiss Paying Agent.

All capitalised terms used in this notice shall bear the same meaning as the
capitalised and defined terms used in the Prospectus and Supplement.

 

 

 

Yours faithfully

 

 

For and on behalf of Invesco Markets II plc

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