Conclusion from Consultation on Proposed Changes to the Security Selection Criteria for US ex-Real Estate Equity Indexes

Invesco Indexing’s consultation regarding a potential change to the security selection criteria of four Invesco US ex-Real Estate indexes¹ has ended. As previously announced, we proposed to introduce the following exclusionary criteria to these indexes:

1. Exclude the 10% lowest-ranked securities by ESG Score². Securities without an ESG Score would be ineligible for Index inclusion.
2. Exclude the 10% lowest-ranked securities by Governance Score². Securities without a Governance Score would be eligible for Index inclusion.
3. Exclude securities that rank in one of the two worst levels by Controversy Score².  Securities without a Controversy Score would be ineligible for Index inclusion.
4. Exclude securities from the following categories³:

Having considered stakeholder feedback, Invesco Indexing will be implementing the changes as outlined in the consultation. The changes will be effective with the December 2022 rebalance. For any questions, please reach out to a member of the client engagement team at IndexSupport@Invesco.com. 

1 - Invesco US ex-Real Estate Low Volatility Index, Invesco US ex-Real Estate Price Momentum Index, Invesco US ex-Real Estate Quality Index, and Invesco US ex-Real Estate Value Index

2 - Source: Sustainalytics.

3 - The level of involvement necessary for exclusion varies by category, ranging from zero tolerance to 25%.