Five new ETFs seeks to give investors exposure to reliable dividends with an ESG overlay
Five new exchange-traded funds (ETFs) with an Environmental, Social, and Governance (ESG) overlay have just been introduced by Invesco Canada Ltd. These will give investors exposure to stocks with a track record of continuous dividend growth.
In addition to having NEI Investments' ESG monitoring, the new index ETFs will follow several S&P Dividend Aristocrat Indices. The launch broadens and deepens Invesco's defensive ETF strategies in Canada and offers more ETF options to assist customers in achieving specific investment objectives considering the current market conditions.
"Our expanded dividend ETF line-up aims to provide more choices to investors looking for access to higher risk-adjusted returns with an additional opportunity to buffer against market volatility. The new Invesco Dividend Aristocrats ETFs will also be the first products Invesco Canada offers with an ESG-tilt on a dividend income strategy," said Pat Chiefalo, Senior Vice President, Head of ETFs & Index Strategies, Canada.
Invesco S&P US Dividend Aristocrats ESG Index ETF and Invesco S&P International Developed Dividend Aristocrats ESG Index ETF, two of the five ETFs premiering today, will each contain a series of CAD Hedged Units.
The five newly introduced ETFs provide three different areas of dividend income exposure.
The Invesco S&P/TSX Canadian Dividend Aristocrats ESG Index ETF (ICAE), which tracks the S&P/TSX Canadian ESG Dividend Aristocrats FMC Weighted Index, invests primarily in TSX-listed securities that have grown regular cash dividends in four of the last five years and have not cut such payments in any year, as well as satisfying specified ESG requirements.
The Invesco S&P US Dividend Aristocrats ESG Index ETF (IUAE) uses the S&P ESG High Yield Dividend Aristocrats FMC Weighted Index as its benchmark. Both IUAE and the Canadian-hedged IUAE.F invest mostly in US-listed stocks that have grown total dividends per share annually for at least 20 years while also satisfying certain ESG requirements.
The third approach tracks the S&P International Developed Ex-North America & Korea ESG Dividend Aristocrats FMC Weighted Index and can be acquired through the Invesco S&P International Developed Dividend Aristocrats ESG Index ETF (IIAE). In developed economies in Europe, the Middle East, Africa, and Asia Pacific that fulfill strict ESG-criteria, IIAE and the Canadian-hedged IIAE.F will invest in securities of the top dividend paying firms with a policy of raising or maintaining dividends for at least 10 years.
"These indices incorporate dividend-based strategies which reflect the ongoing market sentiment and growing trend of what's often viewed as a traditional barometer of companies' financial health combined with sustainability considerations," said Bruce Schachne, Chief Commercial Officer at S&P Dow Jones Indices.