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Invesco Launches $1.6B MSCI Global Climate 500 ETF with Varma

Invesco Launches $1.6B MSCI Global Climate 500 ETF with Varma

Listen to this story:
  • Invesco’s new ETF, KLMT, starts trading with a $1.6 billion investment from Varma.
  • KLMT targets climate-focused investments, tracking the MSCI ACWI Select Climate 500 Index.
  • The ETF reflects a growing institutional interest in customizable, sustainable investment solutions.

Invesco Ltd. has launched the Invesco MSCI Global Climate 500 ETF (KLMT) with a substantial $1.6 billion investment from Finnish pension insurer Varma. This ETF aims to address the increasing institutional demand for sustainable and climate-focused investments, offering a precise, lower-cost option for large investors.

The launch of KLMT is a clear indication that sophisticated institutions are increasing their usage of ETFs for a variety of functions, said Brian Hartigan, Global Head of ETFs & Indexed Investments. 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.

Institutional interest in ETFs continues to grow as many large, experienced investors recognize that the unique attributes of an ETF—tax efficiency, liquidity, and cost-effectiveness—can fill a specific need in their portfolios. ETFs can often provide liquidity in more nuanced areas of the market that might require expertise to manage efficient exposure.

KLMT is a great example of Invesco’s ability to work with global partners to create a lower-cost, passively managed ETF that meets the exact investment mandate set forth by Varma.

We are very pleased to work alongside Invesco, one of the world’s biggest asset managers, and MSCI, a leading global index provider, to create an ETF tailored to Varma’s systematic investment preferences, said 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.”

KLMT seeks to track the MSCI ACWI Select Climate 500 Index, comprising securities of global companies that meet certain environmental and climate criteria, including a track record of reducing greenhouse gas and carbon emissions. MSCI and Varma worked together to design the index to ensure it captures constituents with greenhouse gas emissions reduction targets that fit into Varma’s precise investment parameters regarding energy transition.

Related Article: BNP Paribas Asset Management Launches Global Equity SRI PAB ETF, Expanding Climate Fund Range

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.

Varma’s investment experience may not be representative of other customers’ investment experience and is not a guarantee of future performance or success.


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