The $146 million Invesco Environmental Focus Municipal Fund secured the nod for the ESG fixed income fund of the year, North America award after its recent conversion saw it emphasise the high potential environmental impact of its US muni bond investments.

The fund converted to an environment-focused fund in September 2020, with judges impressed by the comprehensive opportunities sought out by the fund. The fund assesses investments with a "high potential environmental impact" as those likely to result in lower or net-zero emissions, environmental conservation or rehabilitation and increased creation or use of renewable energy.

To select specific issuers, the fund – managed by Tim Benzel, Eddie Bernhdart, Tim O'Reilly, Mark Paris, Galen True and Julius Williams – uses a proprietary process to assess the environmental impact of a muni issuer on a comparative basis. This includes detailed comparisons of the environmental programmes and policies and issuer-level data from each issuer considered.

The objective of the fund opens it to investment opportunities across energy efficiency, mass transit, carbon capture and renewable energy projects from munis at a time when muni sustainable bonds are growing in prominence. According to figures from the Environmental Finance Bond Database, US muni sustainable bond issuance doubled in 2020 to more than $21 billion. Nonetheless, the approach of the fund also opens up opportunities for investment in conventional fixed income instruments from issuers with particularly strong environmental records.