Stay up so far with free updates
Simply log in Exchange-traded funds myFT Digest – delivered straight to your inbox.
Latest news on ETFs
Visit our ETF Hub to learn more and explore our detailed data and comparison tools
Invesco has expanded its offering of thematic exchange-traded funds by introducing strategies focused on artificial intelligence, cybersecurity and defense trends.
The Invesco Artificial Intelligence Enablers, Cybersecurity and Defense Innovation Ucits ETFs follow benchmarks created by Kensho, a division of S&P Global Indices with expertise in the applying of AI and other technologies.
To create the three global indices, Kensho uses natural language processing as an initial screening to discover corporations which may be exposed to key concepts related to every topic. Its analysts further evaluate each of the identified corporations and assign theme exposures accordingly.
Eligible corporations are divided into “core” and “non-core” corporations, with the previous being those whose “significant slice of their operations and/or revenue comes from services and products aligned with the theme,” in accordance with Invesco.
This article was previously published by Ignite European FT Group title.
Companies within the latter category are those who operate along the topic's broader value chain and supply “vital inputs” but don’t concentrate on providing the top products themselves.
Invesco said the AI Enablers strategy would goal corporations focused on “developing and enabling” the technology, infrastructure and services that drive the expansion and functionality of AI.
Meanwhile, the cybersecurity ETF would spend money on corporations that “electronically protect businesses and devices from unauthorized access.”
The defense-focused fund would offer exposure to corporations developing “advanced weapons, defense systems and other border security solutions,” the asset manager added.
The AI Enablers and Cybersecurity indices apply environmental, social and governance screenings to exclude corporations which might be either involved in certain controversial business activities, don’t adhere to the principles of the UN Global Compact or Having ESG scores in the underside 10 percentage points of the S&P Global BMI Index.
Gary Buxton, head of ETFs for Europe, Middle East and Africa and Asia Pacific at Invesco, said the fund group “selected to work with Kensho because they’ve a wise approach to applying AI, but in addition because they’ve expertise to know these rapidly evolving “recent technologies”.
“In addition, its membership within the S&P Global Index group should provide investors with the next level of confidence in its management.
“While the potential of AI has truly captured people’s imaginations, cybersecurity and defense solutions at the moment are gaining traction as threats emerge around the globe,” he added.
According to Chris Mellor, the group's EMEA head of ETF equity product management, the three recent launches “differ from one another in several key aspects”.
An annual fee of 0.35 percent is charged for every ETF.
