The latest news in investment offerings, financial products and other services relative to wealth advisors and their clients.

US-headquartered investment manager Invesco has launched three thematic exchange traded funds (ETFs) to provide investors access to the long-term trends of artificial intelligence (AI), cybersecurity and defence.

Each of the new ETFs will follow global benchmarks constructed by Kensho, the specialist branch of S&P Global Indices which has expertise in the application of AI and other next generation technologies.

The Invesco Artificial Intelligence Enablers UCITS ETF will target companies which develop and enable the technology, infrastructure, and services propelling the growth and functionality of AI, the firm said in a statement. It is classified as Article 8 under the EU’s Sustainable Finance Disclosure Regulation (SFDR).

The Invesco Cybersecurity UCITS ETF is aimed at firms which protect enterprises and devices from unauthorised access via electronic means; it is also classified as Article 8 under the SFDR.

The Invesco Defence Innovation UCITS ETF, which will look at companies that are developing sophisticated weapons, defensive systems and other solutions for securing borders, is classified as Article 6 under the SFDR.

“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,” Gary Buxton, head of EMEA and APAC ETFs at Invesco, said. “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 for identifying companies with potential exposure to key concepts associated with each theme. Kensho’s analysts also assess each of the companies identified and assigns 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 per cent of the S&P Global BMI Index.  

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 which do not deliver 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.

EFG Asset Management (UK)
EFG Asset Management (UK) has just launched the New Capital - BlueOrchard Global Impact Credit Fund, in collaboration with the specialist impact investment manager BlueOrchard.

Part of the Schroders Group, BlueOrchard focuses on impact investing, which looks at investing in companies which aim to generate financial returns coupled with measurable positive social and /or environmental impact. This is EFG's second product focused on sustainable investing or making sustainable investments, following the launch of the New Capital Climate Transition Equity Fund in 2023, the firm said in a statement. 

The New Capital – BlueOrchard Global Impact Credit Fund, which is an Article 9 fund under the EU’s Sustainable Finance Disclosure Regulation (SFDR), is a global corporate bond fund that invests primarily in bonds labelled as green, social or sustainable, with the use of proceeds being clearly defined and disclosed to investors. In the period from 2016 to end-2023, the issuance of labelled bonds increased by 37 per cent compound annual growth rate (CAGR), as issuers seek to raise capital to fund environmental and social projects.

The new fund launched by EFG Asset Management in partnership with BlueOrchard is a Luxembourg-registered SICAV and will offer daily liquidity via multiple retail and institutional share classes denominated in euros, Swiss francs, dollars and sterling.

“The fund focuses on helping investors align their portfolios with their values while driving substantial progress in environmental and social areas," Philipp Mueller, CEO at BlueOrchard, said.

EFG Asset Management (EFGAM), part of the EFG Group, is an international provider of actively managed investment products and services to financial intermediaries and institutional investors around the world.

EFGAM's proprietary New Capital funds and strategies offer a range of actively managed, specialist strategies across equity, fixed income, alternative and multi-asset within both developed and emerging markets. The strategies are available in a variety of structures including AlFs, CITS, SMAs and UCITS, and are available through vehicles domiciled in Ireland, Luxembourg, Switzerland, Hong Kong and the US.