It tracks the MSCI Global Climate 500 North America Select Index and holds roughly 280 US and Canadian large- and mid-cap stocks that meet carbon reduction performance and greenhouse gas emission criteria. It is managed with a full replication approach, investing most of its assets in the index constituents.

It suits long-term investors who are interested in the climate transition theme but still want a broadly diversified North American portfolio.

Invesco launched it in 2024 as a passively managed (index-tracking) ETF.

The fund holds US and Canadian large- and mid-cap stocks that pass carbon emission reduction and greenhouse gas intensity criteria, weighted by market capitalization. The core of the strategy is to apply climate-based screening while maintaining broad North American market exposure without sector concentration.

• Company selection based on carbon reduction performance (not a simple exclusion approach)
• Low-cost, fully replicated passive strategy

Assets under management (AUM) stand at $2.5B, and the Expense Ratio is 0.09% per year.

Its expense burden is lower than that of similar-category funds such as ESGU and SUSA, and its North America-only climate screening sets it apart from global climate ETFs.

Because large North American technology and communication stocks make up the top weightings, the fund is closely correlated with the performance of those sectors. Even with climate screening applied to its holdings, the large Big Tech weighting means it behaves more like a broad large-cap ETF than a pure climate theme fund.

As institutional and retail interest in climate and environmental themes grows, inflows into ETFs centered on companies that meet carbon reduction requirements have continued steadily. However, as a newer product compared with broad market ETFs, its cumulative assets remain relatively limited.

Low fees and broad diversification are its strengths, while Big Tech concentration and the liquidity limits that come with being a new product are its weaknesses.

Similar ETFs shown in the table include ESGD (iShares, developed markets), ESGE (emerging markets), and VSGX (Vanguard's global climate strategy), while KLMT is Invesco's global climate product. CRBN is iShares' low-carbon transition ETF and is compared within the same climate category. As direct alternatives for a North American climate theme, investors can also consider ESGU, which is based on environmental, social, and governance factors, and SUSA, which uses corporate sustainability scores. Both ETFs are more mature in terms of fund size and trading liquidity.

These are the key items to review before investing in KLMN. Although it is an ETF that integrates climate criteria, investors should understand its Big Tech concentration and new-product characteristics in advance.

Because of its Big Tech tilt, the fund may show volatility closer to that of a large-cap ETF than a climate theme fund. As a new product, its trading liquidity and bid-ask spread need to be checked against mature ETFs, and the portfolio composition may change if the index methodology is revised.

It can be considered a low-cost option for investors who want both North American large- and mid-cap diversification and integrated climate criteria. If you need purer exposure to the climate theme, compare CRBN and KLMT as well, and if trading liquidity matters, it is sensible to consider mature products such as ESGU and SUSA first.