Invesco launches solar ETF
Invesco announces the launch of an ETF focused on global companies that are leading the world in solar energy technology. The Invesco Solar Energy UCITS ETF will track the performance of the MAC Global Solar Energy Index, which was developed by leading solar industry experts and is now administered and calculated by S&P Dow Jones Indices.
Gary Buxton, Head of EMEA ETFs and Indexed Strategies at Invesco, says: “Leaders of the major economies of the world may not agree on many things, but they are united in tackling climate change. With the goal of reaching net zero carbon emissions in the next few decades, plans set out by the governments of the US, UK, EU and China all involve a substantial increase in their capacity to generate electricity from renewable energy. Their ambitious plans become realistic when you consider the economics with solar energy on track to soon become the lowest-cost electricity in history.”
Richard Asplund, Managing Director at MAC Solar Index, says: “We have been working with Invesco for 13 years and are excited they are bringing our solar index to investors in Europe. The index methodology is fundamentally the same as when we created it in 2008. It is designed to track the performance of companies globally within the solar energy industry, with diversified exposure to all solar technologies, the entire value chain and related solar equipment. The biggest change has been in our universe. For example, solar tracking systems have been around for decades, but the companies are only now appearing in our index as the technology becomes more cost effective.”
The MAC Global Solar Energy Index focusses on companies deriving a significant amount of their revenues from (a) producing solar power equipment including tracking systems, inverters, batteries and other energy storage systems, (b) supplying raw materials, components or services to solar producers or developers, or (c) solar power system installation, development, integration, maintenance or finance. The index is weighted by modified market capitalisation, which adjusts each company’s weight based on the proportion of its revenues that are derived from solar businesses. The ongoing charge is 0.69 per cent.
Chris Mellor, Head of EMEA ETF Equity and Commodity Product Management at Invesco, says: “In following this index, our ETF will be investing in companies globally across the solar industry value chain but emphasising those with significant revenues from solar-related activities. Pure-play solar companies will be given increased weighting, while those earning less than a third of their total revenues from solar – or any from fossil fuels – will be removed completely. Constituent stocks must also meet strict liquidity, tradability and governance thresholds.”
This new ETF follows the launch earlier this year of the Invesco Global Clean Energy UCITS ETF. Invesco considers these clean-energy-focused ETFs to be important components of its commitment to delivering responsible and sustainable solutions for investors. Invesco’s 15-strong range of ESG-focused UCITS ETFs has assets under management of approximately USD3 billion.