Stockholm (NordSIP) – Global asset management firm Invesco, has partnered with Finnish pension insurer Varma to launch the Invesco MSCI Global Climate 500 ETF (KLMT). The ETF tracks the performance of an index developed by MSCI together with Varma that tracks the performance of companies that have made efforts to lower their greenhouse gas emissions.
“We are very pleased to work alongside Invesco, one the world’s biggest asset managers, and MSCI, a leading global index provider, to create an ETF tailored to Varma’s systematic investment preferences,” says Timo Sallinen, Varma’s Head of Listed Securities. “Our $1.6 billion investment in KLMT will help us meet our principles for responsible investing and gives us more flexibility for investing our €61 billion assets.”
Partnering With Invesco
The sustainable ETF market has grown substantially recently, reaching US$422 billion in assets under management in 2023 according to Institutional Shareholder Services (ISS). Not every “off-the-shelf” ETF can offer large, experienced investors the precise exposure needed. With KLMT, Invesco sought to offer Varma a lower-cost, passively managed ETF that meets the exact investment mandate set by the Finnish pension insurer.
KLMT tracks the MSCI ACWI Select Climate 500 Index, an index comprised of shares of global companies that meet certain environmental and climate criteria relative to their peers, including a track record of reducing greenhouse gas and carbon emissions. The index is constructed by selecting the constituents from the market capitalization weighted MSCI ACWI ex Select Countries Index.
“The launch of KLMT is clear indication that sophisticated institutions are increasing their usage of ETFs for a variety of functions. We are excited to collaborate with MSCI to address the needs of one such investor and provide Varma with a US ETF that offers the precise strategy needed for their portfolio,” says Brian Hartigan, Global Head of ETFs & Indexed Investments. “Invesco is one of the few global asset managers capable of servicing clients who want customizable, cross-regional ETFs for exacting exposures.”
Partnering with MSCI
MSCI and Varma worked together to design the index, to ensure it captures constituents with one or more greenhouse gas emissions reduction targets that fit into Varma’s precise investment parameters with respect to energy transition.
“We are excited that Varma and Invesco have chosen the MSCI ACWI Select Climate 500 Index as the benchmark for the new Invesco MSCI Global Climate 500 ETF,” said Christine Berg, Head of Client Coverage, Americas at MSCI. “This is a great example of how custom indexes can be used to support the unique views of large institutional investors.”
KLMT begins trading on the New York Stock Exchange with US$1.6 billion in assets from Finnish pension insurer, Varma.
