LOGO  

 

Invesco Annual Report to Shareholders

  August 31, 2022

 

  PLW   Invesco 1-30 Laddered Treasury ETF
  PWZ   Invesco California AMT-Free Municipal Bond ETF
  PCEF   Invesco CEF Income Composite ETF
  PHB   Invesco Fundamental High Yield® Corporate Bond ETF
  PFIG   Invesco Fundamental Investment Grade Corporate Bond ETF
       PZA   Invesco National AMT-Free Municipal Bond ETF
  PZT   Invesco New York AMT-Free Municipal Bond ETF
  PGX   Invesco Preferred ETF
  BAB   Invesco Taxable Municipal Bond ETF
  CLTL   Invesco Treasury Collateral ETF
  VRP   Invesco Variable Rate Preferred ETF
  PVI   Invesco VRDO Tax-Free ETF


 

Table of Contents

 

The Market Environment      3  
Management’s Discussion of Fund Performance      5  
Liquidity Risk Management Program      36  
Schedules of Investments   

Invesco 1-30 Laddered Treasury ETF (PLW)

     37  

Invesco California AMT-Free Municipal Bond ETF (PWZ)

     39  

Invesco CEF Income Composite ETF (PCEF)

     45  

Invesco Fundamental High Yield® Corporate Bond ETF (PHB)

     48  

Invesco Fundamental Investment Grade Corporate Bond ETF (PFIG)

     52  

Invesco National AMT-Free Municipal Bond ETF (PZA)

     63  

Invesco New York AMT-Free Municipal Bond ETF (PZT)

     81  

Invesco Preferred ETF (PGX)

     84  

Invesco Taxable Municipal Bond ETF (BAB)

     89  

Invesco Treasury Collateral ETF (CLTL)

     106  

Invesco Variable Rate Preferred ETF (VRP)

     107  

Invesco VRDO Tax-Free ETF (PVI)

     113  
Statements of Assets and Liabilities      116  
Statements of Operations      118  
Statements of Changes in Net Assets      120  
Financial Highlights      124  
Notes to Financial Statements      136  
Report of Independent Registered Public Accounting Firm      151  
Fund Expenses      152  
Tax Information      154  
Trustees and Officers      155  
Approval of Investment Advisory and Sub-Advisory Contracts      165  

 

 

  2  

 


 

The Market Environment

 

 

 

Domestic Equity

The fiscal year began with increasing volatility and the US stock market saw a selloff through most of September due to increasing concerns of inflation resulting from a spike in oil prices and supply chain shortages causing rising costs. Despite the Consumer Price Index (CPI) increasing monthly from June through September 2021,1 the US Federal Reserve (the Fed) declined to raise interest rates at its September 2021 Federal Open Market Committee meeting.

Equity markets saw continued volatility in the fourth quarter of 2021 amid record inflation and the emergence of a new COVID-19 variant. Pandemic-related supply chain disruption and labor shortages intensified during the quarter, resulting in broadly higher input costs for companies and consumers alike. Additionally, the price of oil rose to nearly $85 per barrel in October,2 causing higher gas prices for consumers, and pushing energy stocks higher. The CPI reported for November increased 0.8%, resulting in a 6.8% increase over the prior 12 months, the highest since 1982.1 To combat inflation, the Fed announced a faster pace of “tapering” at its December meeting, pledging to end its asset purchase program by March 2022. The Fed also announced the potential for three interest rate increases in 2022. With solid corporate earnings and optimism about the COVID-19 Omicron variant reporting milder symptoms, stocks rallied at the 2021 year-end.

Equity markets declined in the first quarter of 2022 amid volatility sparked by Russia’s invasion of Ukraine, rising commodity prices, rampant global inflation and the Fed’s shift toward tighter monetary policy. Russia’s invasion exacerbated inflationary pressures, disrupting already strained supply chains and increasing shortages of oil, gas and raw materials. The price of oil rose sharply, with crude prices reaching their highest price per barrel since 2008.2 The CPI rose by another 7.9% for the 12 months ended February 2022 reaching a 40 year high.1 To combat inflation, the Fed raised the federal funds rate by a one-quarter percentage point in March.

As the war in Ukraine continued and corporate earnings in high-profile names, like Netflix, reported slowing growth and profits, the equity markets sold off for much of April 2022. The downward direction of the equity markets continued for much of the second quarter of 2022 amid record inflation, rising interest rates and an increasing likelihood of a US recession. Driven by higher food and energy prices, the CPI rose by yet another 8.6% for the 12 months ended May 2022 reaching a 40 year high.1 Oil prices peaked near $122 per barrel in early June, resulting in skyrocketing gasoline prices; the national average price reached a record high above $5 per gallon in early June.2 To tame inflation, the Fed raised the benchmark federal funds rate three more times, by 0.50% in May, by 0.75% in June and another 0.75% in July, which were the largest increases in nearly 30 years.3 US equity markets rose in July and much of August until Fed

chairman Jerome Powell’s hawkish comments at Jackson Hole, Wyoming, an economic policy symposium, sparked a sharp selloff at month end. Due to declining energy prices, the CPI rose by 8.5% for the 12 months ending July,1 down slightly from June, but still at multi-decade highs and far above the Fed’s 2% annual inflation target. As a result, the Fed indicated that it would continue taking aggressive action to curb inflation, though such measures could “bring pain to households and businesses.” The remarks deflated investor optimism that the Fed would pause rate hikes in the second half of 2022 and increased the likelihood of a US recession. In this environment, US stocks had negative double-digit returns of (11.23)% for the fiscal year ended August 31, 2022, measured by the S&P 500 Index.4

 

1 

Source: US Bureau of Labor Statistics

2 

Source: Bloomberg LP

3 

Source: US Federal Reserve

4 

Source: Lipper Inc.

Fixed Income

In the fourth quarter of 2021, concerns about inflation heightened as US inflation rose 7%,1 its highest level in nearly 40 years. Though the US Federal Reserve (the Fed) left policy rates unchanged in the quarter, the Fed indicated its accommodative policies were coming to an end in 2022 through a willingness to raise interest rates to combat inflation and the announced reduction of its monthly bond purchase program. Additionally, US interest rate moves and inflation risk significantly affected fixed income valuations during the quarter. The two-year Treasury yield rose moderately from 0.27% to 0.73%, while the 10-year increased slightly from 1.48% to 1.52% during the quarter.2 The yield curve, as measured by the yield differential between two- and 10-year Treasuries, flattened during the quarter.

At the beginning of 2022, geopolitical and economic tensions between Ukraine and Russia culminated with the latter invading Ukrainian territory. World leaders levied sanctions against Russia that had material effects on its fixed income markets, particularly sovereign debt, corporates and levels of liquidity. The Russia-Ukraine war exacerbated inflationary pressures while also exerting downward pressure on economic growth through a surge in commodity/energy prices. Additionally, surges of COVID-19 in China exacerbated supply chain issues and aggravated inflation. During the second quarter of 2022, the two-year Treasury yield rose significantly from 0.78% to 2.28%, while the 10-year increased moderately from 1.63% to 2.32%.2

In the second quarter of 2022, the macro backdrop of tightening financial conditions and slowing economic growth was negative for credit asset classes. Inflation, as measured by the Consumer Price Index, increased further to 9.1%1 and fixed income markets felt the impact of rising interest rates. Bond sectors experienced negative performance ranging from -0.9% (Bloomberg Asset-Backed Securities) to -9.8% (Bloomberg US Corporate High Yield).3 Credit spreads increased across all major credit-sensitive sectors,

 

 

  3  

 


 

The Market Environment (continued)

 

 

 

reflecting anticipation of an economic slowdown and increasing concerns about recession risk, with corporate spreads ending the second quarter above their long-term historical average. The Fed continued its rapid tightening of monetary policy in an effort to combat inflation via higher interest rates while simultaneously engineering a soft landing so as to not push the economy into a recession. The Fed aggressively raised its key fed funds rate during the period, including a 0.50% hike in May, a 0.75% hike in June (the largest since 1994), and an additional 0.75% hike in July to a target range of 2.25-2.50%. We believe that the Fed is unlikely to pivot from its hawkish policies, and we expect the Fed will increase the target range to 3.50-3.75% by the end of the year followed by a 0.50% cut in 2023. While rates remained elevated across all maturities on the yield curve, the two-year Treasury rates increased from 2.92% to 3.45% during the last 2-month period in the fiscal year, while 10-year Treasury rates increased from 3.04% to 3.15% over the same period.2 At the end of the fiscal year, the yield curve remained inverted, which historically has been an indicator of a potential recession.

 

1 

Source: US Bureau of Labor Statistics

2 

Source: US Department of the Treasury

3 

Source: Bloomberg

 

 

  4  

 


 

 

PLW    Management’s Discussion of Fund Performance
   Invesco 1-30 Laddered Treasury ETF (PLW)

 

As an index fund, the Invesco 1-30 Laddered Treasury ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Ryan/NASDAQ U.S. 1-30 Year Treasury Laddered Index (the “Index”). The Fund generally will invest at least 80% of its total assets in the components of the Index.

Strictly in accordance with its guidelines and mandated procedures, Nasdaq, Inc. (the “Index Provider”) oversees the Index, which seeks to measure the potential returns of a theoretical portfolio of U.S. Treasury securities with a yield curve based upon 30 distinct annual maturities. The Index seeks to maintain a continuous maturity laddered portfolio of securities, meaning that its constituent securities are scheduled to mature in a proportional, annual sequential pattern. The Index allows a six-month maturity deviation if securities with a desired maturity date are not available.

The Index includes securities that are U.S. Treasury-auctioned issues with fixed coupon rates that are non-callable. The Fund generally invests in all of the securities comprising its Index in proportion to their weightings in the Index.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (15.99)%. On a net asset value (“NAV”) basis, the Fund returned (15.71)%. During the same time period, the Index returned (15.53)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.

During this same time period, the Bloomberg U.S. Treasury Index (the “Benchmark Index”) returned (10.80)%. The Benchmark Index is an unmanaged index weighted by market capitalization, which is based on the average performance of approximately 300 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the roughly 5-year average duration of the U.S. Treasury market.

Relative to the Benchmark Index, the Fund was most overweight in bonds with maturities between 6-10 years duration and most underweight in bonds with maturities between 0-5 years duration during the fiscal year ended August 31, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during the period can be attributed to the Fund’s overweight allocation to bonds with maturities greater than 5 years.

For the fiscal year ended August 31, 2022, bonds with maturities of 10 years detracted most significantly from the Fund’s return, followed by bonds with maturities of 6 years. No bonds contributed positively to the Fund’s return over the period.

Positions that detracted most significantly from the Fund’s return for the fiscal year ended August 31, 2022 included U.S. Treasury

Bond, 4.50% coupon, due 02/15/2036 (portfolio average weight of 9.40%), and U.S. Treasury Bond, 5.38% coupon, due 02/15/2031 (portfolio average weight 7.60%). No positions contributed positively to the Fund’s return during the period.

 

Duration Breakdown
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Maturing in 0-5 Years      18.00  
Maturing in 6-10 Years      21.61  
Maturing in 11-15 Years      12.81  
Maturing in 16-20 Years      16.39  
Maturing in 21-25 Years      15.51  
Maturing in 26-30 Years      15.53  
Money Market Funds Plus Other Assets Less Liabilities      0.15  
Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Security   
U.S. Treasury Bonds, 4.50%, 02/15/2036      9.44  
U.S. Treasury Bonds, 5.38%, 02/15/2031      7.58  
U.S. Treasury Notes, 2.75%, 02/15/2024      3.69  
U.S. Treasury Bonds, 7.13%, 02/15/2023      3.67  
U.S. Treasury Bonds, 7.63%, 02/15/2025      3.57  
U.S. Treasury Bonds, 6.00%, 02/15/2026      3.55  
U.S. Treasury Notes, 2.75%, 02/15/2028      3.54  
U.S. Treasury Bonds, 6.63%, 02/15/2027      3.52  
U.S. Treasury Notes, 1.50%, 02/15/2030      3.51  
U.S. Treasury Notes, 1.88%, 02/15/2032      3.49  
Total      45.56  

 

*

Excluding money market fund holdings.

 

 

  5  

 


 

Invesco 1-30 Laddered Treasury ETF (PLW) (continued)

 

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
Ryan/NASDAQ U.S. 1-30 Year Treasury Laddered Index     (15.53 )%      (3.82 )%      (11.03 )%      0.30     1.49     1.30     13.83       4.07     81.20
Bloomberg U.S. Treasury Index     (10.80     (2.25     (6.59     0.30       1.52       0.83       8.57         2.67       47.96  
Fund                    
NAV Return     (15.71     (4.06     (11.70     0.06       0.29       1.05       11.06         3.79       74.03  
Market Price Return     (15.99     (4.20     (12.09     (0.01     (0.04     1.01       10.55         3.75       73.07  

 

Fund Inception: October 11, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.25% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund

distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The returns of an index do not represent Fund returns. An investor cannot invest directly in an index. The indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Indexes and Fund Performance History:

 

-

Average Annualized and Cumulative Inception returns for the Fund and indexes are based on the inception date of the Fund.

 

 

  6  

 


 

 

PWZ    Management’s Discussion of Fund Performance
   Invesco California AMT-Free Municipal Bond ETF (PWZ)

 

As an index fund, the Invesco California AMT-Free Municipal Bond ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the ICE BofA California Long-Term Core Plus Municipal Securities Index (the “Index”). The Fund generally will invest at least 80% of its total assets in the components of the Index.

Strictly in accordance with its guidelines and mandated procedures, ICE Data Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is composed of U.S. dollar-denominated, tax-exempt municipal debt publicly issued by California or any U.S. territory and their political subdivisions, in the U.S. domestic market. Such securities are exempt from the federal alternative minimum tax and are considered investment grade based on an average of ratings by S&P Global Ratings, a division of S&P Global Inc., Moody’s Investors Service, Inc. and Fitch Ratings Inc. To be eligible for inclusion in the Index, such securities must have a term of at least 15 years remaining to final maturity, a fixed coupon schedule, and a minimum amount outstanding of $25 million per maturity. The Fund does not purchase all of the securities in the Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (11.66)%. On a net asset value (“NAV”) basis, the Fund returned (11.28)%. During the same time period, the Index returned (11.47)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to the positive effects of the sampling approach employed by the portfolio management team, which was partially offset by the fees and operating expenses incurred by the Fund and costs associated with portfolio rebalancing during the period.

During this same time period, the Bloomberg Municipal Bond 20 Year Index (the “Benchmark Index”) returned (10.90)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 5,800 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of municipal securities with maturities of 17 to 22 years.

Relative to the Benchmark Index, the Fund was most overweight in California bonds and most underweight in New York bonds during the fiscal year ended August 31, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during the period can be attributed to the Fund’s exposure to California bonds.

For the fiscal year ended August 31, 2022, California bonds detracted most significantly from the Fund’s return. Puerto Rico bonds contributed the most to the Fund’s return during the period.

Positions that contributed most significantly to the Fund’s return included Regents of the University of California Medical Center, 3.50% coupon, due 05/15/2054 (portfolio average weight of 2.30%), and Sacramento (City of), 5.50% coupon, due 08/01/2052 (portfolio average weight of 0.60%). Positions that detracted most significantly from the Fund’s return for the fiscal year ended August 31, 2022, included California (State of) Health Facilities Financing Authority, 4.00% coupon, due 08/15/2050 (portfolio average weight of 2.00%), and Fremont (City of), CA, 4.00% coupon, due 08/01/2046 (portfolio average weight of 0.50%).

 

Revenue Type Breakdown (% of the Fund’s Net Assets)
as of August 31, 2022
 
Ad Valorem Property Tax      28.30  
Health, Hospital, Nursing Home Revenue      14.89  
College & University Revenue      11.25  
Electric Power Revenue      7.94  
Port, Airport & Marina Revenue      6.83  
General Fund      6.62  
Water Revenue      5.14  
Lease Revenue      4.36  
Sewer Revenue      3.69  
Revenue Types Each Less Than 3%      9.61  
Other Assets Less Liabilities      1.37  

 

 

  7  

 


 

Invesco California AMT-Free Municipal Bond ETF (PWZ) (continued)

 

Top Ten Fund Holdings (% of the Fund’s Net Assets)

as of August 31, 2022

 
Security   
Marin (County of), CA Healthcare District (Election of 2013), Series 2017 A, GO Bonds, 5.00%, 08/01/2041      2.89  
San Diego Unified School District (Election of 2012), Series 2017 I, GO Bonds, 5.00%, 07/01/2041      2.58  
California State University, Series 2016 A, Ref. RB, 5.00%, 11/01/2041      2.34  
California (State of) Health Facilities Financing Authority (Stanford Health Care), Series 2020 A, Ref. RB, 4.00%, 08/15/2050      2.27  
Regents of the University of California Medical Center, Series 2022, RB, 3.50%, 05/15/2054      2.23  
Hayward Unified School District (Election of 2018), Series 2022, GO Bonds, 4.00%, 08/01/2050      1.69  
Sacramento (City of), CA Municipal Utility District (Green Bonds), Series 2020 H, RB, 5.00%, 08/15/2050      1.38  
San Francisco (City & County of), CA Airport Commission (San Francisco International Airport), Series 2016, RB, 5.00%, 05/01/2046      1.30  
San Mateo & Foster (Cities of), CA Public Financing Authority (Clean Water Program), Series 2019, RB, 5.00%, 08/01/2049      1.25  
Los Angeles (County of), CA Metropolitan Transportation Authority, Series 2017 A, RB, 5.00%, 07/01/2042      1.25  
Total      19.18  

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
Blended—ICE BofA California Long-Term Core Plus Municipal Securities Index     (11.47 )%      (1.56 )%      (4.61 )%      1.19     6.11     2.68     30.33       3.73     72.47
Bloomberg Municipal Bond 20 Year Index     (10.90     (1.16     (3.45     1.60       8.25       2.80       31.85         4.10       81.87  
Fund                    
NAV Return     (11.28     (1.89     (5.58     0.88       4.50       2.53       28.41         3.31       62.41  
Market Price Return     (11.66     (2.00     (5.89     0.77       3.92       2.48       27.78         3.24       60.66  

 

 

  8  

 


 

Invesco California AMT-Free Municipal Bond ETF (PWZ) (continued)

 

Fund Inception: October 11, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.28% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The

returns of an index do not represent Fund returns. An investor cannot invest directly in an index. The indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Indexes and Fund Performance History:

 

-

The Blended—ICE BofA California Long-Term Core Plus Municipal Securities Index is comprised of the performance of the BofA Merrill Lynch California Insured Long-Term Core Municipal Securities Index, the Fund’s underlying index from Fund inception through the conversion date, May 29, 2009, followed by the performance of the BofA Merrill Lynch California Insured Long-Term Core Plus Municipal Securities Index, the Fund’s underlying index for the period May 29, 2009 until July 8, 2014, followed by the performance of the Index for the period July 8, 2014 through August 31, 2022.

 

-

Average Annualized and Cumulative Inception returns for the Fund and indexes are based on the inception date of the Fund.

 

 

  9  

 


 

 

PCEF    Management’s Discussion of Fund Performance
   Invesco CEF Income Composite ETF (PCEF)

 

As an index fund, the Invesco CEF Income Composite ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S-Network Composite Closed-End Fund IndexSM (the “Index”). The Fund generally will invest at least 90% of its total assets in the components of the Index. The Fund is a “fund of funds,” as it invests its assets in the common shares of funds included in the Index rather than in individual securities.

S-Network Global Indexes, Inc. compiles, maintains and calculates the Index, which is designed to measure the overall performance of a universe of U.S.-listed closed-end funds that are organized under the laws of the United States and are principally engaged in asset management processes designed to produce taxable annual yield. Each closed-end fund must have a stated objective to invest in taxable investment grade fixed-income securities, taxable high yield fixed-income securities or taxable options. The Index may include closed-end funds that are advised by an affiliate of Invesco Capital Management LLC, the Fund’s investment adviser. The Fund generally invests in all of the securities comprising its Index in proportion to their weightings in the Index.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (14.18)%. On a net asset value (“NAV”) basis, the Fund returned (14.04)%. During the same time period, the Index returned (13.96)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period, which were partially offset by income received from the securities lending program in which the Fund participates.

During this same time period, the S&P 500® Index (the “Benchmark Index”) returned (11.23)%. The Benchmark Index is an unmanaged index weighted by market capitalization, which is based on the average performance of approximately 500 equity securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.

Relative to the Benchmark Index, the Fund was most overweight in investment grade and high yield fixed-income closed-end funds during the fiscal year ended August 31, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index can be attributed to the Fund’s fixed-income exposure, which generally underperformed the equity markets during the period.

For the fiscal year ended August 31, 2022, the Highland Income Fund (portfolio average weight of 1.74%) contributed most significantly to the Fund’s return, followed by the BlackRock Energy and Resources Trust (portfolio average weight of 0.58%). Positions that detracted most significantly from the Fund’s return included BlackRock Science & Technology Trust (portfolio average

weight of 1.95%), and Nuveen Preferred & Income Securities Fund (portfolio average weight of 2.42%).

 

Asset Class Breakdown*
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Bonds      40.55  
Option Income      26.23  
Bonds/High Yield      21.92  
Fixed Income      7.90  
Equities      2.23  
Domestic Equity      1.13  
Money Market Funds Plus Other Assets Less Liabilities      0.04  

 

*

Reflects exposure achieved through investments in underlying funds.

 

Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Security   
PIMCO Dynamic Income Fund      4.70  
Eaton Vance Tax-Managed Global Diversified Equity Income Fund      3.03  
PIMCO Dynamic Income Opportunities Fund      2.88  
Nuveen Preferred & Income Securities Fund      2.59  
DoubleLine Income Solutions Fund      2.43  
BlackRock Enhanced Equity Dividend Trust      2.25  
Virtus Dividend, Interest & Premium Strategy Fund      2.23  
Eaton Vance Ltd. Duration Income Fund      2.11  
Highland Income Fund      1.98  
First Trust Intermediate Duration Preferred & Income Fund      1.97  
Total      26.17  

 

*

Excluding money market fund holdings.

 

 

  10  

 


 

Invesco CEF Income Composite ETF (PCEF) (continued)

 

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
S-Network Composite Closed-End Fund IndexSM     (13.96 )%      3.57     11.09     4.02     21.75     5.62     72.83       6.43     118.21
S&P 500® Index     (11.23     12.39       41.98       11.82       74.86       13.08       241.73         12.89       356.85  
Fund                    
NAV Return     (14.04     3.43       10.63       3.76       20.28       5.24       66.62         6.01       107.84  
Market Price Return     (14.18     3.41       10.58       3.72       20.06       5.22       66.39         6.00       107.39  

 

Fund Inception: February 19, 2010

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 1.97% includes the unitary management fee of 0.50% and acquired fund fees and expenses of 1.47%. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder

would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The returns of an index do not represent Fund returns. An investor cannot invest directly in an index. The indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Indexes and Fund Performance History:

 

-

Average Annualized and Cumulative Inception returns for the Fund and indexes are based on the inception date of the Fund.

 

 

  11  

 


 

 

PHB    Management’s Discussion of Fund Performance
   Invesco Fundamental High Yield® Corporate Bond ETF (PHB)

 

As an index fund, the Invesco Fundamental High Yield® Corporate Bond ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the RAFI® Bonds U.S. High Yield 1-10 Index (the “Index”). The Fund generally will invest at least 80% of its total assets in the components that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, Research Affiliates, LLC (the “Index Provider”) or its agent compiles and calculates the Index, which is designed to measure the performance of U.S. dollar-denominated high yield corporate bonds that are SEC-registered securities, Rule 144A securities under the Securities Act of 1933 (the “Securities Act”), or Section 3(a)(2) securities under the Securities Act with registration rights (issued after July 31, 2013) and whose issuers are public companies domiciled in the United States.

The Index selects and weights securities based on the Fundamental Index® approach developed by the Index Provider that uses four fundamental factors of company size: book value of assets, gross sales, gross dividends and cash flow. Only non-convertible, non-exchangeable, non-zero, fixed coupon high- yield corporate bonds qualify for inclusion in the Index. The Fund does not purchase all of the securities in the Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (10.06)%. On a net asset value (“NAV”) basis, the Fund returned (9.55)%. During the same time period, the Index returned (9.10)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.

During this same time period, the Bloomberg U.S. Corporate High Yield Index (the “Benchmark Index”) returned (10.60)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 2,100 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the broad-based U.S. high-yield corporate bond market.

Relative to the Benchmark Index, the Fund was most overweight in the financials sector and most underweight in the consumer discretionary sector during the fiscal year ended August 31, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s security selection within the communication services sector.

For the fiscal year ended August 31, 2022, the consumer discretionary sector detracted most significantly from the Fund’s return, followed by the communication services and industrials

sectors, respectively. No sectors contributed positively to the Fund’s return during the period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included CoreCivic, Inc., 8.25% coupon, due 04/15/2026 an industrial company (portfolio average weight of 0.64%), and Royal Caribbean Cruises Ltd., 5.25% coupon, due 11/15/2022, a consumer discretionary company (portfolio average weight of 0.61%). Positions that detracted most significantly from the Fund’s return for the fiscal year ended August 31, 2022, included Ford Motor Co., 3.25% coupon, due 02/12/2032, a consumer discretionary company (portfolio average weight of 1.22%), and Dish DBS Corp., 5.13% coupon, due 06/01/2029, a communication services company (portfolio average weight of 0.56%).

 

Sector Breakdown
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Consumer Discretionary      24.10  
Industrials      13.94  
Communication Services      11.04  
Materials      8.62  
Information Technology      8.39  
Energy      8.19  
Financials      6.42  
Utilities      5.92  
Real Estate      5.70  
Health Care      5.18  
Consumer Staples      1.04  
Money Market Funds Plus Other Assets Less Liabilities      1.46  
Credit Quality Rating (S&P)*
(% of the Fund’s Net Assets)
as of August 31, 2022
 
BBB      15.52  
BB      67.68  
B      13.90  
CCC      0.50  
Not Rated      0.94  
Money Market Funds Plus Other Assets Less Liabilities      1.46  

 

*

Source: Standard & Poor’s. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to C (lowest); ratings are subject to change without notice. “Not Rated” indicates the debtor was not rated, and should not be interpreted as indicating low quality. For more information on Standard & Poor’s rating methodology, please visit spglobal.com/ratings/en/ and select “Understanding Credit Ratings” under About Ratings on the homepage.

 

 

  12  

 


 

Invesco Fundamental High Yield® Corporate Bond ETF (PHB) (continued)

 

Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Security   
Centene Corp., 4.63%, 12/15/2029      2.11  
United Airlines Holdings, Inc., 4.88%, 01/15/2025      1.87  
Ford Motor Credit Co. LLC, 3.38%, 11/13/2025      1.72  
Ally Financial, Inc., 5.75%, 11/20/2025      1.71  
Sprint Corp., 7.88%, 09/15/2023      1.45  
Charter Communications Operating LLC/Charter Communications Operating Capital Corp., 4.91%, 07/23/2025      1.39  
Ford Motor Co., 3.25%, 02/12/2032      1.38  
TransDigm, Inc., 5.50%, 11/15/2027      1.34  
Sprint Capital Corp., 6.88%, 11/15/2028      1.34  
DPL, Inc., 4.13%, 07/01/2025      1.33  
Total      15.64  

 

*

Excluding money market fund holdings.

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
Blended—RAFI® Bonds U.S. High Yield 1-10 Index     (9.10 )%      1.01     3.06     2.64     13.90     4.08     49.18       4.53     92.63
Bloomberg US Corporate High Yield Index     (10.60     1.03       3.11       2.58       13.60       4.51       55.41         6.17       142.58  
Fund                    
NAV Return     (9.55     0.15       0.46       1.84       9.53       3.22       37.23         2.97       54.28  
Market Price Return     (10.06     0.00       0.00       1.73       8.93       3.14       36.24         2.78       50.10  

 

 

  13  

 


 

Invesco Fundamental High Yield® Corporate Bond ETF (PHB) (continued)

 

Fund Inception: November 15, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.50% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The returns of an index do not represent Fund returns. An investor cannot invest directly in an index. The indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Indexes and Fund Performance History:

 

-

Average Annualized and Cumulative Inception returns for the Fund and indexes are based on the inception date of the Fund.

 

-

The Blended-RAFI® Bonds U.S. High Yield 1-10 Index is comprised of the performance of the Wells Fargo® High Yield Bond Index, the Fund’s previous index, from Fund inception through the conversion date, August 2, 2010, followed by the performance of the Index starting at the conversion date through August 31, 2022.

 

 

  14  

 


 

 

PFIG    Management’s Discussion of Fund Performance
   Invesco Fundamental Investment Grade Corporate Bond ETF (PFIG)

 

As an index fund, the Invesco Fundamental Investment Grade Corporate Bond ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the RAFI® Bonds U.S. Investment Grade 1-10 Index (the “Index”). The Fund generally will invest at least 80% of its total assets in the components of the Index.

Strictly in accordance with its guidelines and mandated procedures, Research Affiliates, LLC (the “Index Provider”) or its agent compiles and calculates the Index, which is designed to measure the performance of U.S. dollar-denominated investment grade corporate bonds that are SEC-registered securities, or Rule 144A securities under the Securities Act of 1933 (the “Securities Act”), or Section 3(a)(2) securities under the Securities Act with registration rights (issued after July 31, 2013) and whose issuers are public companies domiciled in the United States. The Index selects and weights securities based on the Fundamental Index® approach developed by the Provider that uses four fundamental factors of company size: book value of assets, gross sales, gross dividends and cash flows. Only non-convertible, non-exchangeable, non-zero, fixed coupon investment grade corporate bonds qualify for inclusion in the Index. The Fund does not purchase all of the securities in the Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (10.39)%. On a net asset value (“NAV”) basis, the Fund returned (10.10)%. During the same time period, the Index returned (9.93)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to the fees and operating expenses that the Fund incurred during the period.

During this same time period, the Bloomberg U.S. Corporate Index (the “Benchmark Index”) returned (14.91)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 7,300 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the broad-based U.S. corporate bond market.

Relative to the Benchmark Index, the Fund was most overweight in the real estate sector and most underweight in the financials sector during the fiscal year ended August 31, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to its security selection within the financials sector.

For the fiscal year ended August 31, 2022, the financials sector detracted most significantly from the Fund’s return, followed by the information technology and health care sectors, respectively. No sector contributed positively to the Fund’s return during the period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Brighthouse Financial, Inc., 5.63% coupon, due 05/15/2030, a financials company (portfolio average weight of 0.10%), and HCA, Inc., 5.38% coupon, due 02/01/2025, a health care company (portfolio average weight of 0.14%). Positions that detracted most significantly from the Fund’s return for the fiscal year ended August 31, 2022, included General Electric Co., 6.75% coupon, due 03/15/2032, a financials company (portfolio average weight of 0.30%), and Apple Inc., 1.65% coupon, due 02/08/2031, an information technology company (portfolio average weight of 0.51%).

 

Sector Breakdown
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Financials      18.93  
Information Technology      11.97  
Health Care      10.36  
Industrials      10.21  
Consumer Staples      10.01  
Consumer Discretionary      9.41  
Utilities      7.10  
Real Estate      5.88  
Energy      5.67  
Communication Services      4.89  
Materials      4.60  
Money Market Funds Plus Other Assets Less Liabilities      0.97  
Credit Quality Rating (S&P)*
(% of the Fund’s Net Assets)
as of August 31, 2022
 
AAA      1.55  
AA      8.12  
A      33.10  
BBB      56.26  
Money Market Funds Plus Other Assets Less Liabilities      0.97  

 

*

Source: Standard & Poor’s. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to C (lowest); ratings are subject to change without notice. “Not Rated” indicates the debtor was not rated, and should not be interpreted as indicating low quality. For more information on Standard & Poor’s rating methodology, please visit spglobal.com/ratings/en/ and select “Understanding Credit Ratings” under About Ratings on the homepage.

 

 

  15  

 


 

Invesco Fundamental Investment Grade Corporate Bond ETF (PFIG) (continued)

 

Top Ten Fund Holdings* (% of the Fund’s Net Assets)
as of August 31, 2022
       
Security   
Microsoft Corp., 3.30%, 02/06/2027      0.79  
JPMorgan Chase & Co., 2.95%, 10/01/2026      0.56  
Apple, Inc., 1.65%, 02/08/2031      0.51  
AT&T, Inc., 4.25%, 03/01/2027      0.51  
Exxon Mobil Corp., 2.61%, 10/15/2030      0.49  
Bank of America Corp., 3.25%, 10/21/2027      0.49  
General Electric Co., 6.75%, 03/15/2032      0.48  
American International Group, Inc., 3.90%, 04/01/2026      0.48  
Walmart, Inc., 1.80%, 09/22/2031      0.47  
Exxon Mobil Corp., 3.04%, 03/01/2026      0.47  
Total      5.25  

 

*

Excluding money market fund holdings.

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
RAFI® Bonds U.S. Investment Grade 1-10 Index     (9.93 )%      (0.68     (2.02     1.29     6.63     2.08     22.82       2.55     31.72
Bloomberg U.S. Corporate Index     (14.91     (2.12     (6.22     1.02       5.22       2.32       25.82         3.02       38.61  
Fund                    
NAV Return     (10.10     (0.91     (2.72     1.04       5.31       1.81       19.67         2.20       26.86  
Market Price Return     (10.39     (0.98     (2.90     0.94       4.80       1.75       18.91         2.18       26.66  

 

 

 

  16  

 


 

Invesco Fundamental Investment Grade Corporate Bond ETF (PFIG) (continued)

 

Fund Inception: September 15, 2011

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.22% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund

distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The returns of an index do not represent Fund returns. An investor cannot invest directly in an index. The indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Indexes and Fund Performance History:

 

-

Average Annualized and Cumulative Inception returns for the Fund and indexes are based on the inception date of the Fund.

 

 

  17  

 


 

 

PZA    Management’s Discussion of Fund Performance
   Invesco National AMT-Free Municipal Bond ETF (PZA)

 

As an index fund, the Invesco National AMT-Free Municipal Bond ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the ICE BofA National Long-Term Core Plus Municipal Securities Index (the “Index”). The Fund generally will invest at least 80% of its total assets in the components of the Index.

Strictly in accordance with its guidelines and mandated procedures, ICE Data Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is composed of U.S. dollar-denominated, tax-exempt municipal debt publicly issued by U.S. states and territories and their political subdivisions, in the U.S. domestic market. Such securities are exempt from the federal alternative minimum tax and are considered investment grade based on an average of ratings by S&P Global Ratings, a division of S&P Global Inc., Moody’s Investors Service, Inc. and Fitch Ratings Inc. To be eligible for inclusion in the Index, such securities must have a term of at least 15 years remaining to final maturity, a fixed coupon schedule, and a minimum amount outstanding of $25 million per maturity. The Fund does not purchase all of the securities in the Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (12.42)%. On a net asset value (“NAV”) basis, the Fund returned (12.21)%. During the same time period, the Index returned (12.16)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period, which were partially offset by the positive effect of the sampling approach employed by the portfolio management team.

During this same time period, the Bloomberg Municipal Bond 20 Year Index (the “Benchmark Index”) returned (10.90)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 5,800 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of municipal securities with maturities of 17 to 22 years.

Relative to the Benchmark Index, the Fund was most overweight in Massachusetts bonds and most underweight in California bonds during the fiscal year ended August 31, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during the period can be attributed to differences in state weightings relative to the Benchmark Index, as well as fees and trading costs incurred by the Fund.

For the fiscal year ended August 31, 2022, New York bonds detracted most significantly from the Fund’s return, followed by California bonds. Puerto Rico bonds contributed most significantly to the Fund’s return during the period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Harris County Texas Cultural, 4.13% coupon, due 07/01/2052 (portfolio average weight of 0.40%), and Ysleta Texas Independent School District, 4.25% coupon, due 08/15/2056 (portfolio average weight of 0.40%). Positions that detracted most significantly from the Fund’s return included Colorado Health Facilities, 3.00% coupon, due 11/15/2051 (portfolio average weight of 0.60%), and Colorado Health Facilities, 4.00% coupon, due 11/15/2050 (portfolio average weight of 0.90%).

 

Revenue Type Breakdown (% of the Fund’s Net Assets)
as of August 31, 2022
 
Health, Hospital, Nursing Home Revenue      18.47  
Ad Valorem Property Tax      15.80  
College & University Revenue      9.78  
Water Revenue      8.76  
Highway Tolls Revenue      7.56  
Sales Tax Revenue      6.66  
Income Tax Revenue      5.44  
Lease Revenue      4.94  
Miscellaneous Revenue      4.69  
Electric Power Revenue      3.89  
Port, Airport & Marina Revenue      3.53  
Revenue Types Each Less Than 3%      9.48  
Other Assets Less Liabilities      1.00  

 

 

  18  

 


 

Invesco National AMT-Free Municipal Bond ETF (PZA) (continued)

 

Top Ten Fund Holdings
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Security   
Los Angeles (County of), CA Metropolitan Transportation Authority (Green Bonds), Series 2020 A, RB, 5.00%, 06/01/2037      1.03  
Colorado (State of) Health Facilities Authority (Adventhealth Obligated Group), Series 2021 A, Ref. RB, 4.00%, 11/15/2050      0.94  
San Diego Unified School District, Series 2020 M-2, GO Bonds, 4.00%, 07/01/2050      0.68  
Los Angeles (County of), CA Public Works Financing Authority, Series 2016 D, RB, 5.00%, 12/01/2045      0.60  
Massachusetts (Commonwealth of), Series 2019 A, GO Bonds, 5.25%, 01/01/2044      0.59  
Colorado (State of) Health Facilities Authority (Adventhealth Obligated Group), Series 2021 A, Ref. RB, 3.00%, 11/15/2051      0.57  
Licking Heights Local School District, Series 2022, GO Bonds, 5.50%, 10/01/2059      0.56  
Ohio (State of) Water Development Authority (Water Pollution Control Loan Fund), Series 2019 B, RB, 5.00%, 12/01/2044      0.55  
Grand Parkway Transportation Corp., Series 2018 A, RB, 5.00%, 10/01/2043      0.54  
Chicago (City of), IL Transit Authority, Series 2017, RB, 5.00%, 12/01/2051      0.53  
Total      6.59  

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
Blended—ICE BofA National Long-Term Core Plus Municipal Securities Index     (12.16 )%      (1.56 )%      (4.60 )%      1.24     6.38     2.77     31.48       3.79     74.00
Bloomberg Municipal Bond 20 Year Index     (10.90     (1.16     (3.45     1.60       8.25       2.80       31.85         4.10       81.87  
Fund                    
NAV Return     (12.21     (2.13     (6.27     0.73       3.68       2.24       24.84         3.27       61.46  
Market Price Return     (12.42     (2.22     (6.52     0.70       3.53       2.21       24.43         3.20       59.73  

 

 

 

  19  

 


 

Invesco National AMT-Free Municipal Bond ETF (PZA) (continued)

 

Fund Inception: October 11, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.28% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The

returns of an index do not represent Fund returns. An investor cannot invest directly in an index. The indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Indexes and Fund Performance History:

 

-

The Blended-ICE BofA National Long-Term Core Plus Municipal Securities Index is comprised of the performance of the BofA Merrill Lynch National Insured Long-Term Core Municipal Securities Index, the Fund’s underlying index from Fund inception through the conversion date, May 29, 2009, followed by the performance of the BofA Merrill Lynch National Insured Long-Term Core Plus Municipal Securities Index, the Fund’s underlying index for the period May 29, 2009 through July 8, 2014, followed by the performance of the Index for the period July 8, 2014 through August 31, 2022.

 

-

Average Annualized and Cumulative Inception returns for the Fund and indexes are based on the inception date of the Fund.

 

 

  20  

 


 

 

PZT    Management’s Discussion of Fund Performance
   Invesco New York AMT-Free Municipal Bond ETF (PZT)

 

As an index fund, the Invesco New York AMT-Free Municipal Bond ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the ICE BofA New York Long-Term Core Plus Municipal Securities Index (the “Index”). The Fund generally will invest at least 80% of its total assets in the components of the Index.

Strictly in accordance with its guidelines and mandated procedures, ICE Data Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is composed of U.S. dollar-denominated, tax-exempt municipal debt publicly issued by New York or any U.S. territory and their political subdivisions in the U.S. domestic market. Such securities are exempt from the federal alternative minimum tax and are considered investment grade based on an average of ratings by S&P Global Ratings, a division of S&P Global Inc., Moody’s Investors Service, Inc. and Fitch Ratings Inc. To be eligible for inclusion in the Index, such securities must have a term of at least 15 years remaining to final maturity, a fixed coupon schedule, and a minimum amount outstanding of $25 million per maturity. The Fund does not purchase all of the securities in the Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (12.49)%. On a net asset value (“NAV”) basis, the Fund returned (12.55)%. During the same time period, the Index returned (12.68)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to the positive effect of the sampling approach employed by the portfolio management team, which was partially offset by fees and operating expenses that the Fund incurred during the period.

During this same time period, the Bloomberg Municipal Bond 20 Year Index (the “Benchmark Index”) returned (10.90)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 5,800 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the market for municipal securities with maturities of 17 to 22 years.

Relative to the Benchmark Index, the Fund was most overweight in New York bonds and most underweight in California bonds during the fiscal year ended August 31, 2022. The majority of the Fund’s underperformance, on a NAV basis, relative to the Benchmark Index during the period can be attributed to overweight allocation to New York bonds.

For the fiscal year ended August 31, 2022, New York bonds detracted most significantly from the Fund’s return. Guam bonds were the only contributor to the Fund’s return during the period.

Positions that detracted most significantly from the Fund’s return for the fiscal year ended August 31, 2022, included New York

(State of) Dormitory Authority, 4.00% coupon, due 02/15/2044 (portfolio average weight of 3.30%), and New York (City of), NY Industrial Development Agency, 3.00% coupon, due 03/01/2049 (portfolio average weight of 1.30%). Positions that contributed most significantly to the Fund’s return included New York (City of), NY Municipal Water Finance Authority, 4.00% coupon, due 06/15/2051 (portfolio average weight of 2.10%), and MTA Hudson Rail Yards Trust Obligations, 5.00% coupon, due 11/15/2051 (portfolio average weight of 1.10%).

 

Revenue Type Breakdown (% of the Fund’s Net Assets)
as of August 31, 2022
 
Income Tax Revenue      16.28  
Water Revenue      13.52  
Miscellaneous Revenue      11.30  
Electric Power Revenue      11.08  
Highway Tolls Revenue      8.21  
Ad Valorem Property Tax      6.94  
College & University Revenue      5.99  
Health, Hospital, Nursing Home Revenue      5.42  
Port, Airport & Marina Revenue      4.27  
Lease Revenue      3.67  
Hotel Occupancy Tax      3.48  
Revenue Types Each Less Than 3%      7.05  
Other Assets Less Liabilities      2.79  

 

 

  21  

 


 

Invesco New York AMT-Free Municipal Bond ETF (PZT) (continued)

 

Top Ten Fund Holdings
(% of the Fund’s Net Assets)
as of August 31, 2022
       
Security   
New York (State of) Dormitory Authority (Bidding Group 3), Series 2017 B, Ref. RB, 4.00%, 02/15/2044      3.32  
New York (State of) Power Authority (Green Transmission), Series 2022, RB, 4.00%, 11/15/2052      3.31  
Triborough Bridge & Tunnel Authority, Series 2021 C-1A, RB, 4.00%, 05/15/2046      2.47  
Battery Park (City of), NY Authority (Sustainability Bonds), Series 2019, RB, 5.00%, 11/01/2049      2.38  
Triborough Bridge & Tunnel Authority (MTA Bridges & Tunnels), Series 2021 A, RB, 5.00%, 11/15/2051      2.31  
New York (City of), NY Municipal Water Finance Authority, Series 2021 AA-1, RB, 4.00%, 06/15/2051      2.06  
New York (State of) Utility Debt Securitization Authority, Series 2017, RB, 5.00%, 12/15/2038      1.91  
New York (City of), NY, Series 2019 B-1, GO Bonds, 5.00%, 10/01/2039      1.88  
New York (City of), NY Municipal Water Finance Authority, Series 2021 AA-1, RB, 5.00%, 06/15/2048      1.88  
Long Island (City of), NY Power Authority, Series 2016 B, Ref. RB, 5.00%, 09/01/2041      1.86  
Total      23.38  

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
Blended—ICE BofA New York Long-Term Core Plus Municipal Securities Index     (12.68 )%      (2.03 )%      (5.97 )%      0.82     4.14     2.45     27.44       3.41     64.67
Bloomberg Municipal Bond 20 Year Index     (10.90     (1.16     (3.45     1.60       8.25       2.80       31.85         4.10       81.87  
Fund                    
NAV Return     (12.55     (1.96     (5.75     0.83       4.21       2.12       23.36         2.93       53.81  
Market Price Return     (12.49     (1.98     (5.82     0.86       4.35       2.11       23.20         2.87       52.36  

 

 

  22  

 


 

Invesco New York AMT-Free Municipal Bond ETF (PZT) (continued)

 

Fund Inception: October 11, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.28% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The

returns of an index do not represent Fund returns. An investor cannot invest directly in an index. The indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Indexes and Fund Performance History:

 

-

The Blended-ICE BofA New York Long-Term Core Plus Municipal Securities Index is comprised of the performance of the BofA Merrill Lynch New York Insured Long-Term Core Municipal Securities Index, the Fund’s underlying index from Fund inception through the conversion date, May 29, 2009, followed by the performance of the BofA Merrill Lynch New York Insured Long-Term Core Plus Municipal Securities Index, the Fund’s underlying index for the period May 29, 2009 through July 8, 2014, followed by the performance of the Index for the period July 8, 2014 through August 31, 2022.

 

-

Average Annualized and Cumulative Inception returns for the Fund and indexes are based on the inception date of the Fund.

 

 

  23  

 


 

 

PGX    Management’s Discussion of Fund Performance
   Invesco Preferred ETF (PGX)

 

As an index fund, the Invesco Preferred ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the ICE BofA Core Plus Fixed Rate Preferred Securities Index (the “Index”). The Fund generally will invest at least 80% of its total assets in the components of the Index.

Strictly in accordance with its guidelines and mandated procedures, ICE Data Indices, LLC (the “Index Provider”) selects securities for the Index, which is a market capitalization-weighted index designed to measure the total return performance of the fixed-rate U.S. dollar- denominated preferred securities market. The Index includes both traditional and other preferred securities. Unlisted preferred securities are excluded from the Index, but unlisted senior or subordinated debt- like securities are eligible for inclusion. The Index may include Rule 144A securities. Securities are selected for the Index using a rules-based methodology. Qualifying securities must be rated at least B3 (based on an average of ratings by Moody’s Investors Services, Inc. (“Moody’s”), S&P Global Ratings, a division of S&P Global Inc. (“S&P”) and Fitch Ratings, Inc. (“Fitch”)) and must have an investment grade country risk profile (based on an average of Moody’s, S&P and Fitch foreign currency long-term sovereign debt ratings). The Fund does not purchase all of the securities in the Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (13.91)%. On a net asset value (“NAV”) basis, the Fund returned (13.85)%. During the same time period, the Index returned (13.60)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.

During this same time period, the S&P U.S. Preferred Stock Index (the “Benchmark Index”) returned (12.94)%. The Benchmark Index is an unmanaged index weighted by modified market capitalization, which is based on the average performance of approximately 300 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the preferred stock market, which includes convertible preferred stocks.

Relative to the Benchmark Index, the Fund was most overweight in the energy sector and most underweight in the real estate sector during the fiscal year ended August 31, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during the period can be attributed to its security selection within the financials sector.

For the fiscal year ended August 31, 2022, the financials sector detracted most significantly from the Fund’s return, followed by the real estate sector. No sector contributed positively to the Fund’s return during the period.

Positions that detracted most significantly from the Fund’s return for the fiscal year ended August 31, 2022, included JPMorgan Chase & Co., Series MM, Pfd., 4.20%, a financials company (portfolio average weight 1.42%), and Wells Fargo & Co., Series Z, Pfd., 4.75%, a financials company (portfolio average weight 1.43%). Positions that contributed most significantly to the Fund’s return included DCP Midstream L.P., Series B, Pfd., 7.88%, an energy company (portfolio average weight 0.12%), and Nustar Logistics L.P., Series B, Pfd., 7.65%, an energy company (portfolio average weight 0.21%).

 

Sector Breakdown
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Financials      67.88  
Utilities      10.36  
Real Estate      8.22  
Communication Services      6.83  
Consumer Discretionary      3.32  
Sector Types Each Less Than 3%      3.04  
Money Market Funds Plus Other Assets Less Liabilities      0.35  
Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Security   
Citigroup, Inc., Series K, Pfd., 6.88%      1.78  
JPMorgan Chase & Co., Series DD, Pfd., 5.75%      1.39  
Wells Fargo & Co., Series Q, Pfd., 5.85%      1.39  
Wells Fargo & Co., Series Z, Pfd., 4.75%      1.36  
JPMorgan Chase & Co., Series LL, Pfd., 4.63%      1.35  
JPMorgan Chase & Co., Series MM, Pfd., 4.20%      1.35  
JPMorgan Chase & Co., Series EE, Pfd., 6.00%      1.31  
Bank of America Corp., Series KK, Pfd., 5.38%      1.29  
Bank of America Corp., Series GG, Pfd., 6.00%      1.22  
AT&T, Inc., Series C, Pfd., 4.75%      1.18  
Total      13.62  

 

*

Excluding money market fund holdings.

 

 

 

  24  

 


 

Invesco Preferred ETF (PGX) (continued)

 

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
Blended—ICE BofA Core Plus Fixed Rate Preferred Securities Index     (13.60 )%      (0.91 )%      (2.71 )%      1.63     8.40     4.31     52.49       3.53     65.74
S&P U.S. Preferred Stock Index     (12.94     0.74       2.23       2.22       11.61       4.34       52.97         4.67       94.65  
Fund                    
NAV Return     (13.85     (1.15     (3.41     1.35       6.92       3.99       47.95         2.99       53.57  
Market Price Return     (13.91     (1.24     (3.67     1.36       6.98       3.97       47.53         2.87       51.06  

 

Fund Inception: January 31, 2008

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.51% includes the unitary management fee of 0.50% and acquired fund fees and expenses of 0.01%. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The returns of an index do not represent Fund returns. An investor cannot invest directly in an index. The indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Indexes and Fund Performance History:

 

-

Average Annualized and Cumulative Inception returns for the Fund and indexes are based on the inception date of the Fund.

 

-

The Blended-ICE BofA Core Plus Fixed Rate Preferred Securities Index is comprised of the performance of The BofA Merrill Lynch Core Fixed Rate Preferred Securities Index, the Fund’s previous underlying index, from Fund inception through the conversion date, April 1, 2012, followed by the performance of the Index starting from the conversion date through August 31, 2022.

 

 

  25  

 


 

 

BAB    Management’s Discussion of Fund Performance
   Invesco Taxable Municipal Bond ETF (BAB)

 

As an index fund, the Invesco Taxable Municipal Bond ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the ICE BofA US Taxable Municipal Securities Plus Index (the “Index”). The Fund generally will invest at least 80% of its total assets in securities that comprise the Index.

ICE Data Indices, LLC (the “Index Provider”), oversees the Index, which is designed to measure the performance of U.S. dollar denominated taxable municipal debt publicly issued by U.S. states and territories, and their political subdivisions, in the U.S. market.

Securities eligible for inclusion in the Index must have: (i) at least 18 months to final maturity at the time of issuance, (ii) at least one year remaining term to final maturity, (iii) a fixed coupon schedule, including zero coupon bonds, and (iv) an investment grade rating (based on an average of ratings by Moody’s Investors Services, Inc., S&P Global Ratings, a division of S&P Global Inc. and Fitch Ratings, Inc.). Component securities also must have a minimum amount outstanding that varies according to the bond’s initial term to final maturity at time of issuance: maturities between 1-5 years must have at least $10 million outstanding; maturities between 5-10 years must have at least $15 million outstanding; and maturities of 10 years or more must have at least $25 million outstanding. The Index excludes Rule 144A securities and securities in default. However, it may include bonds eligible to participate in the Build America Bond program created under the American Recovery and Reinvestment Act of 2009 or other legislation providing for the issuance of taxable municipal securities on which the issuer receives federal support of the interest paid (“Build America Bonds”). Unlike most other municipal obligations, interest received on Build America Bonds is subject to federal and state income tax. The Index does not include bonds that, under the Build America Bond program, are eligible for tax credits. Build America Bonds must have at least $1 million outstanding to be eligible for inclusion in the Index.

The Index uses a capitalization weighted methodology, weighting the Index’s constituent bonds using a factor that equals their current amount outstanding multiplied by their market price, plus accrued interest. The Fund does not purchase all of the securities in the Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (16.23)%. On a net asset value (“NAV”) basis, the Fund returned (16.38)%. During the same time period, the Index returned (15.36)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index due to fees and operating expenses that the Fund incurred during the period, as well as costs associated with portfolio rebalancing, sampling, and trading.

During this same time period, ICE BofA U.S. Corporate Master Index returned (14.51)% and the Bloomberg U.S. Aggregate Bond Index returned (11.52)% (each, a “Benchmark Index” and, collectively the “Benchmark Indices”). The Benchmark Indices are unmanaged indices weighted by market capitalization and based on the average performance of approximately 9,600 securities and 12,700 securities, respectively. These Benchmark Indices were selected for their recognition in the marketplace, and their performance comparisons are a useful measure for investors as broad representations of the market for investment grade corporate debt with at least one year to maturity, and the market for U.S. investment grade, fixed-rate bonds, respectively.

Relative to each Benchmark Index, the majority of the Fund’s underperformance during the period can be attributed to the Fund’s overweight allocation to California.

For the fiscal year ended August 31, 2022, California bonds detracted most significantly from the Fund’s return, followed by New York bonds and Texas bonds, respectively. No state contributed positively to the Fund’s return during the period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included New York (State of) Dormitory Authority, 5.97% coupon, due 07/01/2042 (portfolio average weight of 0.02%), and Dallas (City of), TX Independent School District, 6.45% coupon, due 02/15/2035 (portfolio average weight of 0.26%). Positions that detracted most significantly from the Fund’s return for the fiscal year ended August 31, 2022, included California (State of), 7.55% coupon, due 04/01/2039 (portfolio average weight of 1.39%), and California (State of), 7.50% coupon, due 04/01/2034 (portfolio average weight of 1.17%).

 

Revenue Type Breakdown (% of the Fund’s Net Assets)
as of August 31, 2022
 
Ad Valorem Property Tax      20.54  
College & University Revenue      14.55  
Port, Airport & Marina Revenue      8.64  
Miscellaneous Revenue      7.62  
Electric Power Revenue      6.58  
General Fund      6.38  
Lease Revenue      5.47  
Water Revenue      5.17  
Sales Tax Revenue      5.08  
Health, Hospital, Nursing Home Revenue      4.01  
Highway Tolls Revenue      3.49  
Revenue Types Each Less Than 3%      11.4  
Money Market Funds Plus Other Assets Less Liabilities      1.07  

 

 

  26  

 


 

Invesco Taxable Municipal Bond ETF (BAB) (continued)

 

Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Security   
California (State of), Series 2009, GO Bonds, 7.55%, 04/01/2039      1.37  
New York & New Jersey (States of) Port Authority, Series 2020 AAA, RB, 1.09%, 07/01/2023      1.28  
Fort Lauderdale (City of), FL, Series 2020, Ref. RB, 0.75%, 01/01/2024      1.18  
California (State of), Series 2009, GO Bonds, 7.50%, 04/01/2034      1.15  
California (State of), Series 2009, GO Bonds, 7.30%, 10/01/2039      0.98  
New York (City of), NY, Subseries 2019 A-2, GO Bonds, 2.13%, 08/01/2024      0.79  
Allegheny (County of), PA, Series 2020 C-79, Ref. GO Bonds, 2.09%, 11/01/2033      0.79  
University of California, Series 2020 BG, RB, 1.32%, 05/15/2027      0.78  
University of California, Series 2019 BD, RB, 3.35%, 07/01/2029      0.78  
American Municipal Power, Inc. (Combined Hydroelectric), Series 2010 B, RB, 8.08%, 02/15/2050      0.76  
Total      9.86  

 

*

Excluding money market fund holdings.

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
Blended—ICE BofA US Taxable Municipal Securities Plus Index     (15.36 )%      (2.43 )%      (7.11 )%      1.45     7.46     3.22     37.25       5.31     93.73
ICE BofA U.S. Corporate Master Index     (14.51     (1.93     (5.69     1.11       5.69       2.41       26.88         3.79       60.96  
Bloomberg U.S. Aggregate Bond Index     (11.52     (2.00     (5.87     0.52       2.62       1.35       14.36         2.38       35.12  
Fund                    
NAV Return     (16.38     (3.19     (9.26     1.10       5.62       2.94       33.60         5.12       89.27  
Market Price Return     (16.23     (3.34     (9.70     1.06       5.39       2.93       33.44         5.08       88.48  

 

 

  27  

 


 

Invesco Taxable Municipal Bond ETF (BAB) (continued)

 

Fund Inception: November 17, 2009

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.28% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The returns of an index do not represent Fund returns. An investor cannot invest directly in an index. The indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Indexes and Fund Performance History:

 

-

Average Annualized and Cumulative Inception returns for the Fund and indexes are based on the inception date of the Fund.

 

-

The Blended-ICE BofA US Taxable Municipal Securities Plus Index is comprised of the performance of the ICE BofAML Build America Bond Index, the Fund’s previous underlying index, from Fund inception through the conversion date, May 31, 2017, followed by the performance of the Index starting at the conversion date through August 31, 2022.

 

 

  28  

 


 

 

CLTL    Management’s Discussion of Fund Performance
   Invesco Treasury Collateral ETF (CLTL)

 

As an index fund, the Invesco Treasury Collateral ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the ICE U.S. Treasury Short Bond Index (the “Index”). The Fund generally will invest at least 80% of its total assets in the components of the Index.

The Index is designed to measure the performance of U.S. Treasury Obligations with a maximum remaining maturity of less than 12 months. “U.S. Treasury Obligations” refer to securities issued or guaranteed by the U.S. Treasury where the payment of principal and interest is backed by the full faith and credit of the U.S. government. They include U.S. Treasury notes, bills and bonds. The Fund expects to invest 100% of its total assets in cash and U.S. Treasury Obligations with a maximum remaining maturity of less than 12 months. The Index includes all publicly-issued, non-convertible U.S. Treasury Obligations that: (i) are issued in U.S. dollars, (ii) have a minimum remaining maturity of at least one month and a maximum remaining maturity of less than 12 months at the time of rebalance, (iii) have a fixed coupon schedule, and (iv) have a minimum amount outstanding of $300 million.

The Index excludes inflation-linked securities, floating rate notes, any government agency debt issued with or without a government guarantee and Separate Trading of Registered Interest and Principal of Securities (“STRIPS”). The Index uses a market value-weighted methodology. The Fund does not purchase all of the securities in the Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective. In managing the Fund, Invesco Advisers, Inc., the sub-adviser, selects component securities that are expected to have, in the aggregate, investment characteristics, risk factors and liquidity measures that are similar to, and therefore are representative of, the Index.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned 0.18%. On a net asset value (“NAV”) basis, the Fund returned 0.15%. During the same time period, the Index returned 0.09%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to the positive effect of the sampling approach employed by the portfolio management team, which was partially offset by fees and operating expenses that the Fund incurred during the period.

For the fiscal year ended August 31, 2022, bonds with maturities between 61-90 days duration detracted most significantly from the Fund’s return. Bonds with maturities between 8-12 days duration contributed most significantly to the Fund’s return.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included U.S. Treasury Bill, due 10/11/2022 (portfolio average weight of 0.73%), and U.S. Treasury Bill, due 10/25/2022 (portfolio average weight of 0.73%). Positions that detracted most significantly from the Fund’s return included U.S. Treasury Bill, due 01/26/2023 (portfolio average weight of 1.00%), and U.S. Treasury Bill, due 12/29/2022 (portfolio average weight of 0.95%).

Security Type Breakdown (% of the Fund’s Net Assets)
as of August 31, 2022
 
U.S. Treasury Bills      59.72  
U.S. Treasury Notes      40.56  
Money Market Funds Plus Other Assets Less Liabilities      (0.28)  
Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Security   
U.S. Treasury Notes, 2.00%, 10/31/2022      4.00  
U.S. Treasury Bills, 1.74%-2.45%, 10/04/2022      3.63  
U.S. Treasury Bills, 1.87%-2.54%, 10/11/2022      3.63  
U.S. Treasury Bills, 1.91%-2.55%, 10/18/2022      3.63  
U.S. Treasury Bills, 1.93%-2.57%, 10/20/2022      3.63  
U.S. Treasury Bills, 2.02%-2.56%, 10/25/2022      3.62  
U.S. Treasury Bills, 2.58%-2.87%, 12/01/2022      3.26  
U.S. Treasury Bills, 1.97%-2.61%, 11/03/2022      2.84  
U.S. Treasury Bills, 2.59%-2.65%, 11/10/2022      2.66  
U.S. Treasury Bills, 2.82%, 11/25/2022      2.41  
Total      33.31  

 

*

Exlcuding money market fund holdings.

 

 

  29  

 


 

Invesco Treasury Collateral ETF (CLTL) (continued)

 

Growth of a $10,000 Investment Since Inception

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
ICE U.S. Treasury Short Bond Index     0.09     0.59     1.78     1.15     5.90       1.11     6.39
Fund                
NAV Return     0.15       0.58       1.75       1.11       5.66         1.06       6.10  
Market Price Return     0.18       0.58       1.76       1.11       5.67         1.05       6.09  

 

Fund Inception: January 12, 2017

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.08% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund

distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Index performance results are based upon a hypothetical investment in the Index’s constituent securities. Index returns do not represent Fund returns. An investor cannot invest directly in an index. The Index does not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Index and Fund Performance History:

 

-

Average Annualized and Cumulative Inception returns for the Fund and Index are based on the inception date of the Fund.

 

 

  30  

 


 

 

VRP    Management’s Discussion of Fund Performance
   Invesco Variable Rate Preferred ETF (VRP)

 

As an index fund, the Invesco Variable Rate Preferred ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the ICE Variable Rate Preferred & Hybrid Securities Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the components of the Index, including American depositary receipts (“ADRs”) that represent securities in the Index.

Strictly in accordance with its guidelines and mandated procedures, ICE Data Indices, LLC (the “Index Provider”) compiles and calculates the Index, a market capitalization-weighted index designed to track the performance of floating and variable rate investment grade and below investment grade U.S. dollar denominated preferred stock, as well as certain types of hybrid securities that are, in the judgment of the Index Provider, comparable to preferred stocks, that are issued by corporations in the U.S. domestic market. To be eligible for inclusion in the Index, the preferred stock or hybrid security must: (i) be publicly issued, (ii) be U.S.-registered or exempt from registration in the United States, (iii) have at least one day remaining to maturity and at least 18 months to maturity at the time of its issuance, (iv) be issued in either $25 or $1,000 par value increments, and (v) have a floating rate coupon or dividend, and must meet other minimum liquidity, trading volume and other requirements, as determined by the Index Provider. The Fund does not purchase all of the securities in the Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (9.06)%. On a net asset value (“NAV”) basis, the Fund returned (8.63)%. During the same time period, the Index returned (8.39)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period, which were partially offset by the positive effect of the sampling approach employed by the portfolio management team.

During this same time period, the S&P U.S. Preferred Stock Index (the “Benchmark Index”) returned (12.94)%. The Benchmark Index is an unmanaged index weighted by modified market capitalization and based on the average performance of approximately 300 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the primarily fixed-rate preferred stock market.

Relative to the Benchmark Index, the Fund was most overweight in the utilities sector and most underweight in the health care sector during the fiscal year ended August 31, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s security selection to the financials sector.

For the fiscal year ended August 31, 2022, the financials and utilities sectors detracted most significantly from the Fund’s

return. No sector contributed positively to the Fund’s return during the period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Citigroup Capital XIII, Pfd., 9.18%, a financial company (portfolio average weight of 1.10%), and General Electric Co., Series D, 5.16%, an industrial company (portfolio average weight of 2.30%). Positions that detracted most significantly from the Fund’s return included Wells Fargo & Co., Series BB, 3.90%, a financial company (portfolio average weight of 1.40%) and Charles Schwab Corp. (The), Series I, 4.00%, a financial company (portfolio average weight of 0.90%).

 

Sector Breakdown
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Financials      72.84  
Energy      10.99  
Utilities      8.01  
Industrials      3.55  
Sector Types Each Less Than 3%      3.59  
Money Market Funds Plus Other Assets Less Liabilities      1.02  
Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2022
 
Security   
General Electric Co., Series D, 5.16%      2.32  
Wells Fargo & Co., Series BB, 3.90%      1.33  
JPMorgan Chase & Co., Series I, Pfd., 6.28%      1.26  
JPMorgan Chase & Co., Series HH, 4.60%      1.14  
Charles Schwab Corp. (The), Series G, 5.38%      1.07  
JPMorgan Chase & Co., Series V, 5.60%      1.07  
Citigroup Capital XIII, Pfd., 9.18%      1.07  
BP Capital Markets PLC, 4.38%      1.03  
BP Capital Markets PLC, 4.88%      0.99  
Bank of America Corp., Series FF, 5.88%      0.92  
Total      12.20  

 

*

Excluding money market fund holdings.

 

 

  31  

 


 

Invesco Variable Rate Preferred ETF (VRP) (continued)

 

Growth of a $10,000 Investment Since Inception

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
Blended—ICE Variable Rate Preferred & Hybrid Securities Index     (8.39 )%      1.57     4.80     2.52     13.25       4.15     40.31
S&P U.S. Preferred Stock Index     (12.94     0.74       2.23       2.22       11.61         3.84       36.84  
Fund                
NAV Return     (8.63     1.31       3.97       2.25       11.77         3.88       37.35  
Market Price Return     (9.06     1.20       3.65       2.21       11.53         3.84       36.84  

 

Fund Inception: May 1, 2014

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.50% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The returns of an index do not represent Fund returns. An investor cannot invest directly in an index. The indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Indexes and Fund Performance History:

 

-

Average Annualized and Cumulative Inception returns for the Fund and indexes are based on the inception date of the Fund.

 

-

The Blended-ICE Variable Rate Preferred & Hybrid Securities Index is comprised of the performance of the Wells Fargo® Hybrid and Preferred Securities Floating and Variable Rate Index, the Fund’s previous underlying index, from Fund inception through the conversion date, June 30, 2021, followed by the performance of the Index starting at the conversion date through August 31, 2022.

 

 

  32  

 


 

 

PVI    Management’s Discussion of Fund Performance
   Invesco VRDO Tax-Free ETF (PVI)

 

As an index fund, the Invesco VRDO Tax-Free ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the ICE US Municipal AMT-Free VRDO Constrained Index (the “Index”). The Fund generally will invest at least 80% of its total assets in the components of the Index.

Strictly in accordance with its guidelines and mandated procedures, ICE Data Indices, LLC (the “Index Provider”) compiles and calculates the Index, which tracks the performance of U.S. dollar denominated tax-exempt variable rate demand obligations (“VRDOs”) that are publicly issued by U.S. states and territories, and their political subdivisions, and that have interest rates that reset daily, weekly or monthly. Securities eligible for the Index must have at least one day remaining term to final maturity, at least $10 million amount outstanding, an investment grade rating (based on an average of ratings from Moody’s Investors Service, Inc., S&P Global Ratings and Fitch Ratings, Inc.) Securities whose interest is subject to the U.S. alternative minimum tax are excluded from the Index. The Fund does not purchase all of the securities in the Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned 0.17%. On a net asset value (“NAV”) basis, the Fund returned 0.17%. During the same time period, the Index returned 0.38%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.

During this same time period, the Bloomberg Municipal 1-Year Bond Index (the “Benchmark Index”) returned (1.59)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 7,700 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the market for municipal securities with no more than a 1-year duration.

Relative to the Benchmark Index, the Fund was most overweight in California bonds and most underweight in New York bonds during the fiscal year ended August 31, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund being overweight in California and in New York bonds.

For the fiscal year ended August 31, 2022, New York bonds contributed most significantly to the Fund’s return, followed by California bonds and Texas bonds, respectively. There were no states that detracted from the Fund’s return during the period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Build NYC

Resources Corp., 1.48% coupon, due 04/01/2045 (portfolio average weight of 4.37%), and Metropolitan Transportation Authority, 1.48 coupon, due 11/01/2026 (portfolio average weight of 3.59%). There were no detracting positions for the fiscal year ended August 31, 2022.

 

Revenue Type Breakdown (% of the Fund’s Net Assets)
as of August 31, 2022
 
Health, Hospital, Nursing Home Revenue      19.77  
Water Revenue      15.80  
Miscellaneous Revenue      12.61  
Ad Valorem Property Tax      10.09  
Electric Power Revenue      7.32  
Local or GTD Housing      5.99  
Sales Tax Revenue      5.99  
Port, Airport & Marina Revenue      4.81  
Lease Revenue      4.41  
College & University Revenue      4.26  
Transit Revenue      3.15  
Revenue Types Each Less Than 3%      4.56  
Other Assets Less Liabilities      1.24  

 

 

  33  

 


 

Invesco VRDO Tax-Free ETF (PVI) (continued)

 

Top Ten Fund Holdings
(% of the Fund’s Net Assets)
as of August 31, 2022
       
Security   
California (State of) Health Facilities Financing Authority (Dignity Health), Series 2011 B, VRD RB, 1.35%, 03/01/2047      3.78  
Illinois (State of) Finance Authority (Carle Foundation (The)), Series 2021 C, VRD RB, 1.47%, 08/15/2052      3.78  
Indianapolis (City of), IN (Capital Place Apartments, Covington Square Apartments and the Woods at Oak Crossing), Series 2008, VRD RB, 1.62%, 05/15/2038      3.78  
Geneva (City of), NY Industrial Development Agency, Series 2008, VRD RB, 1.52%, 12/01/2037      3.78  
North Carolina (State of) Medical Care Commission (Novant Health Obligated Group), Series 2004 A, VRD RB, 1.55%, 11/01/2034      3.78  
Emmaus (Borough of), PA General Authority, Series 1996, VRD RB, 1.66%, 12/01/2028      3.78  
Missouri (State of) Health & Educational Facilities Authority (BJC Health System), Series 2008 C, VRD RB, 1.46%, 05/15/2038      3.63  
Build NYC Resource Corp. (The Asia Society Project), Series 2015, Ref. VRD RB, 1.48%, 04/01/2045      3.62  
Washington (State of) Suburban Sanitary Commission, Series 2015 A-2, VRD RB, 1.47%, 06/01/2023      3.31  
Los Angeles (City of), CA Department of Water & Power, Subseries 2001 B-7, Ref. VRD RB, 1.20%, 07/01/2034      3.15  
Total      36.39  

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2022

 

    1 Year     3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
Blended—ICE US Municipal AMT-Free VRDO Constrained Index     0.38     0.44     1.32     0.78     3.97     0.51     5.19       0.66     10.19
Bloomberg Municipal 1-Year Bond Index     (1.59 )     0.32       0.95       0.85       4.30       0.81       8.45         1.38       22.41  
Fund                    
NAV Return     0.17       0.22       0.67       0.57       2.88       0.31       3.18         0.61       9.40  
Market Price Return     0.17       0.18       0.55       0.58       2.92       0.31       3.14         0.61       9.40  

 

 

  34  

 


 

Invesco VRDO Tax-Free ETF (PVI) (continued)

 

Fund Inception: November 15, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.25% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The returns of an index do not represent Fund returns. An investor cannot invest directly in an index. The indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the hypothetical performance shown. In addition, the results actual investors might have achieved would have differed from those shown because of differences in the timing, amounts of their investments, and fees and expenses associated with an investment in the Fund.

Notes Regarding Indexes and Fund Performance History:

 

-

Average Annualized and Cumulative Inception returns for the Fund and indexes are based on the inception date of the Fund.

 

-

The Blended-ICE US Municipal AMT-Free VRDO Constrained Index is comprised of the performance of the Thomson Municipal Market Data VRDO Index, the Fund’s underlying index from Fund inception through the conversion date, August 5, 2010, followed by the performance of the Bloomberg U.S. Municipal AMT-Free Weekly VRDO Index, the Fund’s underlying index for the period August 5, 2010 through March 24, 2021, followed by the performance of the Index for the period March 24, 2021 through August 31, 2022.

 

 

  35  

 


 

Liquidity Risk Management Program

In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), the Funds have adopted and implemented a liquidity risk management program (the “Program”). The Program is reasonably designed to assess and manage the Funds’ liquidity risk, which is the risk that the Funds could not meet redemption requests without significant dilution of remaining investors’ interests in the Funds. The Board of Trustees of the Funds (the “Board”) has appointed Invesco Capital Management LLC (“Invesco”), the Funds’ investment adviser, as the Program’s administrator, and Invesco has delegated oversight of the Program to the Liquidity Risk Management Committee (the “Committee”), which is composed of senior representatives from relevant business groups at Invesco and its affiliates.

As required by the Liquidity Rule, the Program includes policies and procedures providing for an assessment, no less frequently than annually, of the Funds’ liquidity risk that takes into account, as relevant to the Funds’ liquidity risk: (1) each Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Funds during both normal and reasonably foreseeable stressed conditions; (3) each Fund’s holdings of cash and cash equivalents and any borrowing arrangements; (4) the relationship between the Funds’ portfolio liquidity and the way in which, and the prices and spreads at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants; and (5) the effect of the composition of baskets on the overall liquidity of each Fund’s portfolio. The Liquidity Rule also requires the classification of each Fund’s investments into categories that reflect the assessment of their relative liquidity under current market conditions. Each Fund classifies its investments into one of four categories defined in the Liquidity Rule: “Highly Liquid,” “Moderately Liquid,” “Less Liquid,” and “Illiquid.” Funds that are not invested primarily in “Highly Liquid Investments” that are assets (cash or investments that are reasonably expected to be convertible into cash within three business days without significantly changing the market value of the investment) are required to establish a “Highly Liquid Investment Minimum” (“HLIM”), which is the minimum percentage of net assets that must be invested in Highly Liquid Investments. Funds with HLIMs have procedures for addressing HLIM shortfalls, including reporting to the Board and the SEC (on a non-public basis) as required by the Program and the Liquidity Rule. In addition, a Fund may not acquire an investment if, immediately after the acquisition, over 15% of such Fund’s net assets would consist of “Illiquid Investments” that are assets (an investment that cannot reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment). The Liquidity Rule and the Program also require reporting to the Board and the SEC (on a non-public basis) if a Fund’s holdings of Illiquid Investments exceed 15% of such Fund’s assets.

At a meeting held on March 15, 2022, the Committee presented a report to the Board that addressed the operation of the Program and assessed the Program’s adequacy and effectiveness of implementation (the “Report”). The Report covered the period from January 1, 2021 through December 31, 2021 (the “Program Reporting Period”). The Report discussed notable events affecting liquidity over the Program Reporting Period, including the impact of the coronavirus pandemic on the Funds and the overall market. The Report noted that there were no material changes to the Program during the Program Reporting Period.

The Report stated, in relevant part, that during the Program Reporting Period:

 

   

The Program, as adopted and implemented, remained reasonably designed to assess and manage the Funds’ liquidity risk and was operated effectively to achieve that goal;

 

   

Each Fund’s investment strategy remained appropriate for an open-end fund;

 

   

Each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund;

 

   

The Funds did not breach the 15% limit on Illiquid Investments; and

 

   

The Funds primarily held Highly Liquid Investments and therefore have not adopted an HLIM.

 

 

 

  36  

 

 


 

Invesco 1-30 Laddered Treasury ETF (PLW)

August 31, 2022

 

Schedule of Investments

 

     Principal
Amount
     Value  

U.S. Treasury Securities-99.85%

 

U.S. Treasury Bonds-85.62%

 

7.13%, 02/15/2023(a)

   $ 18,910,800      $ 19,254,729  

7.63%, 02/15/2025

     17,085,900        18,750,107  

6.00%, 02/15/2026

     17,199,100        18,615,338  

6.63%, 02/15/2027(a)

     16,300,500        18,466,683  

5.25%, 02/15/2029

     16,440,000        18,303,628  

5.38%, 02/15/2031

     34,278,400        39,821,860  

4.50%, 02/15/2036

     42,817,500        49,542,022  

4.75%, 02/15/2037

     14,911,600        17,715,680  

4.38%, 02/15/2038

     15,279,900        17,503,842  

3.50%, 02/15/2039

     16,783,200        17,274,240  

4.63%, 02/15/2040

     14,799,300        17,407,388  

4.75%, 02/15/2041

     14,523,300        17,262,304  

3.13%, 02/15/2042

     17,583,200        16,605,134  

3.13%, 02/15/2043

     17,721,800        16,552,577  

3.63%, 02/15/2044

     16,421,700        16,551,919  

2.50%, 02/15/2045

     19,378,700        16,105,516  

2.50%, 02/15/2046

     19,452,500        16,123,539  

3.00%, 02/15/2047

     17,647,000        16,096,339  

3.00%, 02/15/2048

     17,591,200        16,197,647  

3.00%, 02/15/2049

     17,519,300        16,377,124  

2.00%, 02/15/2050

     21,066,200        16,022,655  

1.88%, 02/15/2051

     21,704,200        15,922,065  

2.25%, 02/15/2052

     21,194,600        17,015,290  
     

 

 

 
        449,487,626  
     

 

 

 

U.S. Treasury Notes-14.23%

     

2.75%, 02/15/2024

     19,570,800        19,378,914  

2.75%, 02/15/2028

     19,121,000        18,566,790  

1.50%, 02/15/2030

     20,693,600        18,411,646  

1.88%, 02/15/2032

     20,441,600       

 

18,330,366

 

 

 

     

 

 

 
        74,687,716  
     

 

 

 

Total U.S. Treasury Securities
(Cost $593,587,821)

        524,175,342  
     

 

 

 
     Shares      Value  

Money Market Funds-0.01%

     

Invesco Government & Agency Portfolio, Institutional Class, 2.22%(b)(c)
(Cost $46,479)

     46,479      $ 46,479  
     

 

 

 

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateralfrom securities on loan)-99.86%
(Cost $593,634,300)

 

     524,221,821  
     

 

 

 
Investments Purchased with Cash Collateral
from Securities on Loan

 

Money Market Funds-1.02%

     

Invesco Private Government Fund,
2.29%(b)(c)(d)

     1,506,072        1,506,072  

Invesco Private Prime Fund, 2.37%(b)(c)(d)

     3,874,212        3,874,600  
     

 

 

 

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $5,380,587)

 

     5,380,672  
     

 

 

 

TOTAL INVESTMENTS IN SECURITIES-100.88%
(Cost $599,014,887)

 

     529,602,493  

OTHER ASSETS LESS LIABILITIES-(0.88)%

 

     (4,615,924
     

 

 

 

NET ASSETS-100.00%

      $ 524,986,569  
     

 

 

 

 

Notes to Schedule of Investments:

(a) 

All or a portion of this security was out on loan at August 31, 2022.

(b) 

Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended August 31, 2022.

 

     Value
August 31, 2021
   Purchases
at Cost
   Proceeds
from Sales
  Change in
Unrealized
Appreciation
   Realized
Gain
(Loss)
   Value
August 31, 2022
   Dividend
Income

Investments in Affiliated Money Market Funds:

                   

Invesco Government & Agency Portfolio, Institutional Class

   $66,933    $16,963,427    $(16,983,881)   $        -      $        -      $        46,479    $1,653

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

 

 

  37  

 

 


 

Invesco 1-30 Laddered Treasury ETF (PLW)–(continued)

August 31, 2022

 

     Value
August 31, 2021
   Purchases
at Cost
   Proceeds
from Sales
  Change in
Unrealized
Appreciation
   Realized
Gain
(Loss)
  Value
August 31, 2022
   Dividend
Income

Investments Purchased with
Cash Collateral from Securities
on Loan:

                                

Invesco Private Government Fund

       $          -        $ 277,070,486      $ (275,564,414 )     $ -      $ -         $1,506,072        $ 20,331 *

Invesco Private Prime Fund

       -        450,832,262        (446,939,636 )       85        (18,111 )       3,874,600        53,988 *
    

 

 

      

 

 

      

 

 

     

 

 

      

 

 

     

 

 

      

 

 

 

Total

       $66,933        $ 744,866,175      $ (739,487,931 )     $ 85      $ (18,111 )       $5,427,151          $75,972  
    

 

 

      

 

 

      

 

 

     

 

 

      

 

 

     

 

 

      

 

 

 

 

*

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statements of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(c) 

The rate shown is the 7-day SEC standardized yield as of August 31, 2022.

(d) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 2I.

 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

 

 

  38  

 

 


 

Invesco California AMT-Free Municipal Bond ETF (PWZ)

August 31, 2022

 

Schedule of Investments

 

     Interest
Rate
  Maturity
Date
     Principal
Amount
(000)
     Value  

Municipal Obligations-98.63%

          

California-98.63%

          

Alameda (City of), CA Corridor Transportation Authority, Series 2016 B, Ref. RB, (INS - AGM)(a)

     3.00     10/01/2034      $ 2,000      $  1,857,751  

Alameda (City of), CA Corridor Transportation Authority, Series 2016 B, Ref. RB, (INS - AGM)(a)

     5.00     10/01/2035        1,500        1,579,040  

Alameda (City of), CA Corridor Transportation Authority, Series 2022 C, RB, (INS - AGM)(a)

     5.00     10/01/2052        1,000        1,055,631  

Alameda (County of), CA Transportation Commission, Series 2022, RB

     5.00     03/01/2045        1,750        1,984,943  

Anaheim (City of), CA Public Financing Authority, Series 2014 A, Ref. RB(b)(c)

     5.00     05/01/2024        540        563,009  

Bay Area Toll Authority (San Francisco Bay Area), Series 2017 S-7, Ref. RB

     4.00     04/01/2042        3,000        2,979,653  

Bay Area Toll Authority (San Francisco Bay Area), Series 2017, Ref. RB

     4.00     04/01/2038        150        151,311  

California (State of), Series 2013, GO Bonds

     5.00     04/01/2043        2,000        2,027,597  

California (State of), Series 2013, GO Bonds

     5.00     11/01/2043        1,965        2,018,931  

California (State of), Series 2014, GO Bonds

     5.00     10/01/2044        1,000        1,044,193  

California (State of), Series 2014, Ref. GO Bonds

     4.00     11/01/2044        520        520,467  

California (State of), Series 2015, GO Bonds

     4.00     03/01/2045        195        195,165  

California (State of), Series 2015, GO Bonds

     5.00     03/01/2045        1,000        1,047,805  

California (State of), Series 2015, Ref. GO Bonds

     5.00     08/01/2035        1,500        1,595,004  

California (State of), Series 2016, GO Bonds

     5.00     09/01/2046        2,000        2,130,914  

California (State of), Series 2017, GO Bonds

     5.00     11/01/2047        3,475        3,732,278  

California (State of), Series 2018, GO Bonds

     5.00     10/01/2047        1,720        1,820,765  

California (State of), Series 2019, Ref. GO Bonds

     4.00     10/01/2037        4,000        4,108,342  

California (State of), Series 2020, GO Bonds

     4.00     03/01/2046        660        653,940  

California (State of), Series 2020, GO Bonds

     3.00     03/01/2050        2,860        2,241,877  

California (State of), Series 2021, GO Bonds

     4.00     10/01/2039        4,990        5,059,703  

California (State of), Series 2021, GO Bonds

     2.38     12/01/2043        2,000        1,448,589  

California (State of), Series 2021, GO Bonds

     3.00     12/01/2043        400        329,512  

California (State of), Series 2021, GO Bonds

     5.00     12/01/2043        1,200        1,320,921  

California (State of), Series 2021, GO Bonds

     3.00     12/01/2046        750        598,459  

California (State of), Series 2021, GO Bonds

     5.00     12/01/2046        500        548,760  

California (State of), Series 2021, GO Bonds

     2.50     12/01/2049        750        519,954  

California (State of), Series 2021, GO Bonds

     3.00     12/01/2049        625        490,633  

California (State of), Series 2021, Ref. GO Bonds

     5.00     09/01/2041        1,530        1,711,528  

California (State of), Series 2021, Ref. GO Bonds

     4.00     10/01/2041        3,500        3,523,782  

California (State of), Series 2022, Ref. GO Bonds

     5.00     04/01/2042        1,720        1,858,847  

California (State of), Series 2022, Ref. GO Bonds

     5.00     04/01/2042        2,560        2,867,488  

California (State of) (Green Bonds), Series 2014, GO Bonds

     5.00     10/01/2037        1,500        1,570,944  

California (State of) Department of Water Resources, Series 2016 AW, Ref. RB(b)(c)

     5.00     12/01/2026        1,000        1,110,410  

California (State of) Educational Facilities Authority (Stanford University) (Sustainability Bonds), Series 2021, Ref. RB

     2.25     04/01/2051        400        253,146  

California (State of) Educational Facilities Authority (University of San Francisco), Series 2018 A, RB

     5.00     10/01/2053        2,000        2,128,791  

California (State of) Health Facilities Financing Authority (Cedars Sinai Health System), Series 2021 A, Ref. RB

     4.00     08/15/2040        1,000        996,068  

California (State of) Health Facilities Financing Authority (Cedars Sinai Health System), Series 2021 A, Ref. RB

     4.00     08/15/2048        4,535        4,411,426  

California (State of) Health Facilities Financing Authority (Cedars Sinai Health System), Series 2021, Ref. RB

     3.00     08/15/2051        2,200        1,690,197  

California (State of) Health Facilities Financing Authority (Cedars-Sinai Medical Center), Series 2016 B, Ref. RB

     5.00     08/15/2035        500        536,525  

California (State of) Health Facilities Financing Authority (Children’s Hospital Los Angeles), Series 2017 A, Ref. RB

     5.00     08/15/2042        6,500        6,723,657  

California (State of) Health Facilities Financing Authority (Kaiser Permanente), Subseries 2017 A-2, RB

     4.00     11/01/2044        110        104,913  

California (State of) Health Facilities Financing Authority (Kaiser Permanente), Subseries 2017 A-2, RB

     5.00     11/01/2047        6,000        6,829,490  

California (State of) Health Facilities Financing Authority (Lucile Salter Packard Children’s Hospital at Stanford), Series 2016 B, RB

     5.00     08/15/2055        1,000        1,047,259  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

 

 

  39  

 

 


 

Invesco California AMT-Free Municipal Bond ETF (PWZ)–(continued)

August 31, 2022

 

     Interest
Rate
  Maturity
Date
     Principal
Amount
(000)
     Value  

California-(continued)

          

California (State of) Health Facilities Financing Authority (Lucile Salter Packard Children’s Hospital at Stanford), Series 2017, RB

     5.00     11/15/2056      $ 145      $ 152,904  

California (State of) Health Facilities Financing Authority (PIH Health), Series 2020 A, RB

     4.00     06/01/2050        5,000        4,574,672  

California (State of) Health Facilities Financing Authority (Providence St. Joseph Health), Series 2016 A, Ref. RB

     3.00     10/01/2047        2,620        1,938,259  

California (State of) Health Facilities Financing Authority (Providence St. Joseph Health), Series 2016 A, Ref. RB

     4.00     10/01/2047        335        317,558  

California (State of) Health Facilities Financing Authority (Stanford Health Care), Series 2017 A, Ref. RB

     4.00     11/15/2040        885        869,129  

California (State of) Health Facilities Financing Authority (Stanford Health Care), Series 2020 A, Ref. RB

     4.00     08/15/2050        13,700        12,858,106  

California (State of) Health Facilities Financing Authority (Sutter Health), Series 2015 A, Ref. RB(b)(c)

     5.00     08/15/2025        1,000        1,073,792  

California (State of) Health Facilities Financing Authority (Sutter Health), Series 2016 B, Ref. RB

     4.00     11/15/2041        885        864,695  

California (State of) Health Facilities Financing Authority (Sutter Health), Series 2017 A, Ref. RB

     4.00     11/15/2048        175        166,184  

California (State of) Health Facilities Financing Authority (Sutter Health), Series 2018 A, RB

     4.00     11/15/2042        170        165,792  

California (State of) Infrastructure & Economic Development Bank, Series 2016 A, RB(b)(c)

     4.00     10/01/2026        1,000        1,061,965  

California (State of) Infrastructure & Economic Development Bank (Academy Motion Picture Arts & Sciences Obligated Group), Series 2015 A, Ref. RB

     5.00     11/01/2041        1,000        1,020,846  

California (State of) Infrastructure & Economic Development Bank (Academy Motion Picture Arts & Sciences Obligated Group), Series 2015, Ref. RB

     4.00     11/01/2045        395        382,065  

California (State of) Infrastructure & Economic Development Bank (California State Teachers’ Retirement System Headquarters Expansion) (Green Bonds), Series 2019, RB

     5.00     08/01/2044        2,005        2,147,980  

California (State of) Infrastructure & Economic Development Bank (California State Teachers’ Retirement System Headquarters Expansion) (Green Bonds), Series 2019, RB

     5.00     08/01/2049        1,250        1,331,600  

California (State of) Infrastructure & Economic Development Bank (Los Angeles County Museum of Natural History Foundation), Series 2020, Ref. RB

     3.00     07/01/2050        2,000        1,519,927  

California (State of) Infrastructure & Economic Development Bank (Los Angeles County Museum of Natural History Foundation), Series 2020, Ref. RB

     4.00     07/01/2050        1,250        1,180,483  

California (State of) Infrastructure & Economic Development Bank (UCSF 2130 Third Street), Series 2017, RB

     5.00     05/15/2047        1,000        1,078,354  

California (State of) Municipal Finance Authority (Clinicas Del Camino Real, Inc.), Series 2020, RB

     4.00     03/01/2050        3,085        2,633,036  

California (State of) Municipal Finance Authority (Community Medical Centers), Series 2017 A, Ref. RB

     4.00     02/01/2042        1,000        965,567  

California (State of) Municipal Finance Authority (Eisenhower Medical Centers), Series 2017 A, Ref. RB

     5.00     07/01/2042        1,000        1,027,446  

California (State of) Municipal Finance Authority (Green Bonds), Series 2021, RB, (INS - BAM) (a)

     4.00     05/15/2046        500        474,191  

California (State of) Municipal Finance Authority (Green Bonds), Series 2021, RB, (INS - BAM) (a)

     3.00     05/15/2051        1,000        765,848  

California (State of) Municipal Finance Authority (Green Bonds), Series 2021, RB, (INS - BAM) (a)

     3.00     05/15/2054        1,000        744,766  

California (State of) Municipal Finance Authority (NorthBay Healthcare Group), Series 2017 A, RB

     5.00     11/01/2047        1,000        1,005,056  

California (State of) Municipal Finance Authority (NorthBay Healthcare Group), Series 2017 A, RB

     5.25     11/01/2047        500        508,506  

California (State of) Municipal Finance Authority (Orange County Civic Center Infrastructure Improvement Program - Phase I), Series 2017 A, RB

     5.00     06/01/2042        1,000        1,071,254  

California (State of) Municipal Finance Authority (UCR North District Phase 1 Student Housing), Series 2019, RB

     5.00     05/15/2049        2,000        2,050,908  

California (State of) Public Finance Authority (Hoag Memorial Hospital), Series 2022 A, RB

     5.00     07/15/2046        500        546,784  

California (State of) Public Works Board (Green Bonds), Series 2021, RB

     4.00     11/01/2046        1,000        971,935  

California (State of) Public Works Board (Green Bonds), Series 2021, RB

     5.00     11/01/2046        1,000        1,099,324  

California (State of) Public Works Board (Various Capital), Series 2016 C, Ref. RB

     5.00     11/01/2034        670        723,825  

California (State of) Statewide Communities Development Authority (Emanate Health), Series 2020 A, RB

     3.00     04/01/2050        1,000        743,462  

California (State of) Statewide Communities Development Authority (Front Porch Communities & Services), Series 2021, Ref. RB

     3.00     04/01/2046        1,250        965,345  

California (State of) Statewide Communities Development Authority (Front Porch Communities & Services), Series 2021, Ref. RB

     4.00     04/01/2051        1,900        1,724,460  

California (State of) Statewide Communities Development Authority (John Muir Health), Series 2016 A, Ref. RB

     4.00     08/15/2046        1,650        1,566,729  

California (State of) Statewide Communities Development Authority (John Muir Health), Series 2016 A, Ref. RB

     4.00     08/15/2051        165        153,920  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

 

 

  40  

 

 


 

Invesco California AMT-Free Municipal Bond ETF (PWZ)–(continued)

August 31, 2022

 

     Interest
Rate
  Maturity
Date
     Principal
Amount
(000)
     Value  

California-(continued)

          

California (State of) Statewide Communities Development Authority (John Muir Health), Series 2016 A, Ref. RB

     5.00     08/15/2051      $ 1,000      $ 1,033,143  

California (State of) Statewide Communities Development Authority (John Muir Health), Series 2018 A, Ref. RB

     5.00     12/01/2057        1,075        1,114,378  

California (State of) Statewide Communities Development Authority (Marin General Hospital) (Green Bonds), Series 2018, RB

     4.00     08/01/2045        1,000        866,498  

California (State of) Statewide Communities Development Authority (Methodist Hospital of Southern California), Series 2018; RB

     5.00     01/01/2048        1,975        2,014,391  

California (State of) Statewide Communities Development Authority (University of California - Irvine East Campus Apartments - CHF-Irvine, LLC), Series 2016, Ref. RB

     5.00     05/15/2040        1,000        1,025,039  

California (State of) Statewide Communities Development Authority (University of California - Irvine East Campus Apartments, Phase IV-A - CHF-Irvine, LLC), Series 2017 A, RB

     5.00     05/15/2047        1,500        1,535,841  

California State University, Series 2015 A, Ref. RB

     5.00     11/01/2038        4,515        4,830,333  

California State University, Series 2015 A, Ref. RB

     5.00     11/01/2047        2,000        2,123,365  

California State University, Series 2016 A, Ref. RB

     4.00     11/01/2038        535        537,878  

California State University, Series 2016 A, Ref. RB

     5.00     11/01/2041        12,410        13,258,170  

California State University, Series 2016 A, Ref. RB

     5.00     11/01/2045        1,700        1,808,636  

California State University, Series 2017 A, Ref. RB

     5.00     11/01/2037        500        544,824  

California State University, Series 2018 A, Ref. RB

     5.00     11/01/2048        3,000        3,246,934  

California State University, Series 2019 A, RB

     5.00     11/01/2049        1,000        1,092,774  

California State University, Series 2020 C, RB

     4.00     11/01/2045        1,720        1,668,627  

Chabot-Las Positas Community College District (Election of 2016), Series 2017 A, GO Bonds

     4.00     08/01/2047        5,090        4,892,843  

Chaffey Joint Union High School District (Election of 2012), Series 2015 B, GO Bonds

     5.00     08/01/2044        2,000        2,080,751  

Chino Valley Unified School District, Series 2020 B, GO Bonds

     5.00     08/01/2055        5,000        5,459,032  

Chino Valley Unified School District (Election of 2016), Series 2022 C, GO Bonds

     4.00     08/01/2055        6,835        6,434,660  

Coachella Valley Unified School District (2005 Election), Series 2016 E, GO Bonds, (INS - AGM)(a)

     4.00     08/01/2045        1,500        1,435,779  

Compton Unified School District, Series 2019 B, GO Bonds, (INS - BAM)(a)

     4.00     06/01/2049        115        110,022  

Contra Costa Community College District (Election of 2014), Series 2014 A, GO Bonds

     4.00     08/01/2039        100        100,499  

Desert Community College District, Series 2021 A-1, GO Bonds

     4.00     08/01/2051        500        475,777  

East Bay Municipal Utility District Water System Revenue, Series 2015 A, Ref. RB

     5.00     06/01/2037        500        532,302  

East Bay Municipal Utility District Water System Revenue (Green Bonds), Series 2017 A, RB

     5.00     06/01/2042        1,500        1,635,060  

East Bay Municipal Utility District Water System Revenue (Green Bonds), Series 2017 A, RB

     5.00     06/01/2045        2,000        2,172,093  

Folsom Cordova Unified School District, Series 2019 D, GO Bonds, (INS - AGM)(a)

     4.00     10/01/2044        250        243,453  

Foothill-Eastern Transportation Corridor Agency, Subseries 2014 B-1, Ref. RB

     3.95     01/15/2053        2,000        1,817,760  

Fremont Union High School District, Series 2015, GO Bonds

     4.00     08/01/2044        1,000        1,001,320  

Fremont Union High School District, Series 2019 A, GO Bonds

     4.00     08/01/2046        3,110        3,081,132  

Fresno Unified School District, Series 2022 B, GO Bonds

     4.00     08/01/2052        2,000        1,875,548  

Fresno Unified School District, Series 2022 B, GO Bonds

     4.00     08/01/2055        2,500        2,328,709  

Glendale Community College District, Series 2020 B, GO Bonds

     3.00     08/01/2047        1,000        762,018  

Glendale Community College District, Series 2020 B, GO Bonds

     4.00     08/01/2050        2,400        2,362,175  

Hayward Unified School District (Election of 2018), Series 2022, GO Bonds, (INS - BAM)(a)

     4.00     08/01/2050        10,000        9,569,522  

Inland Valley Development Agency, Series 2014 A, Ref. RB, (INS - AGM)(a)

     5.00     09/01/2044        1,000        1,021,457  

Irvine Unified School District (Community Facilities District No. 01-1), Series 2015, Ref. RB, (INS - BAM)(a)

     5.00     09/01/2038        1,600        1,675,196  

Jurupa Unified School District, Series 2017 B, GO Bonds

     4.00     08/01/2041        2,000        1,974,652  

Kaweah Delta Health Care District Guild, Series 2015 B, RB

     4.00     06/01/2045        240        228,306  

Lodi Unified School District (Election of 2016), Series 2020, GO Bonds

     3.00     08/01/2043        5,000        4,015,986  

Long Beach (City of), CA, Series 2015, RB

     5.00     05/15/2045        500        506,786  

Long Beach (City of), CA, Series 2017 C, Ref. RB

     5.00     05/15/2047        1,500        1,613,374  

Long Beach (City of), CA (Alamitos Bay Marina), Series 2015, RB

     5.00     05/15/2040        500        509,054  

Long Beach Community College District, Series 2019 C, GO Bonds

     4.00     08/01/2049        1,500        1,427,585  

Los Angeles (City of), CA, Series 2013 A, RB

     5.00     06/01/2043        2,860        2,905,877  

Los Angeles (City of), CA (Green Bonds), Series 2017 A, RB

     5.25     06/01/2047        1,000        1,090,832  

Los Angeles (City of), CA (Green Bonds), Series 2022 A, RB

     5.00     06/01/2047        3,000        3,370,715  

Los Angeles (City of), CA Department of Airports, Series 2021 B, Ref. RB

     5.00     05/15/2045        1,500        1,630,065  

Los Angeles (City of), CA Department of Airports, Series 2021 B, Ref. RB

     5.00     05/15/2048        1,900        2,058,304  

Los Angeles (City of), CA Department of Airports (Green Bonds), Series 2022 I, RB

     5.00     05/15/2048        2,000        2,177,867  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

 

 

  41  

 

 


 

Invesco California AMT-Free Municipal Bond ETF (PWZ)–(continued)

August 31, 2022

 

     Interest
Rate
  Maturity
Date
     Principal
Amount
(000)
     Value  

California-(continued)

          

Los Angeles (City of), CA Department of Airports (Los Angeles International Airport), Series 2019 E, RB

     5.00     05/15/2044      $ 610      $ 651,949  

Los Angeles (City of), CA Department of Water & Power, Series 2014 D, RB

     5.00     07/01/2039        1,000        1,040,428  

Los Angeles (City of), CA Department of Water & Power, Series 2015 E, RB

     5.00     07/01/2044        1,000        1,039,154  

Los Angeles (City of), CA Department of Water & Power, Series 2016 A, Ref. RB

     5.00     07/01/2046        1,000        1,056,692  

Los Angeles (City of), CA Department of Water & Power, Series 2016 A, Ref. RB

     5.00     07/01/2046        2,500        2,638,489  

Los Angeles (City of), CA Department of Water & Power, Series 2016 B, RB

     5.00     07/01/2042        1,500        1,588,375  

Los Angeles (City of), CA Department of Water & Power, Series 2017 A, RB

     5.00     07/01/2042        1,500        1,606,286  

Los Angeles (City of), CA Department of Water & Power, Series 2018 A, RB

     5.00     07/01/2048        2,000        2,160,515  

Los Angeles (City of), CA Department of Water & Power, Series 2018 B, Ref. RB

     5.00     07/01/2048        5,000        5,435,435  

Los Angeles (City of), CA Department of Water & Power, Series 2019 D, Ref. RB

     5.00     07/01/2049        2,235        2,433,803  

Los Angeles (City of), CA Department of Water & Power, Series 2020 B, Ref. RB

     5.00     07/01/2039        2,250        2,504,433  

Los Angeles (City of), CA Department of Water & Power, Series 2021 C, Ref. RB

     5.00     07/01/2037        1,000        1,124,601  

Los Angeles (City of), CA Department of Water & Power, Series 2021 C, Ref. RB

     5.00     07/01/2040        1,000        1,111,259  

Los Angeles (City of), CA Department of Water & Power, Series 2021 C, Ref. RB

     5.00     07/01/2041        1,000        1,108,091  

Los Angeles (City of), CA Department of Water & Power, Series 2021, RB

     5.00     07/01/2045        3,750        4,135,365  

Los Angeles (City of), CA Department of Water & Power, Series 2021, RB

     5.00     07/01/2051        3,250        3,534,250  

Los Angeles (City of), CA Department of Water & Power, Series 2022 B, RB

     5.00     07/01/2047        4,000        4,424,168  

Los Angeles (City of), CA Department of Water & Power, Series 2022 B, RB

     5.00     07/01/2052        3,000        3,284,307  

Los Angeles (City of), CA Department of Water & Power, Series 2022 C, Ref. RB

     5.00     07/01/2041        2,500        2,805,827  

Los Angeles (City of), CA Department of Water & Power, Series 2022 C, Ref. RB

     5.00     07/01/2042        2,500        2,799,938  

Los Angeles (City of), CA Department of Water & Power, Series 2022 C, Ref. RB

     5.00     07/01/2043        1,500        1,686,054  

Los Angeles (City of), CA Department of Water & Power, Series 2022 C, Ref. RB

     5.00     07/01/2043        2,000        2,230,640  

Los Angeles (County of), CA Metropolitan Transportation Authority, Series 2017 A, RB

     5.00     07/01/2042        6,500        7,070,430  

Los Angeles (County of), CA Metropolitan Transportation Authority (Green Bonds), Series 2017 A, RB

     5.00     07/01/2041        1,000        1,089,533  

Los Angeles (County of), CA Metropolitan Transportation Authority (Green Bonds), Series 2019 A, RB

     5.00     07/01/2044        1,000        1,094,661  

Los Angeles (County of), CA Public Works Financing Authority, Series 2015 A, RB

     5.00     12/01/2044        2,000        2,080,490  

Los Angeles (County of), CA Public Works Financing Authority, Series 2016 D, RB

     4.00     12/01/2040        185        186,051  

Los Angeles (County of), CA Public Works Financing Authority, Series 2016 D, RB

     5.00     12/01/2045        1,050        1,103,866  

Los Angeles (County of), CA Public Works Financing Authority (Green Bonds), Series 2020 A, RB

     5.00     12/01/2045        2,050        2,276,471  

Los Angeles (County of), CA Public Works Financing Authority (Green Bonds), Series 2020 A, RB

     3.00     12/01/2050        585        456,966  

Los Angeles Community College District, Series 2016, Ref. GO Bonds

     4.00     08/01/2037        1,215        1,236,626  

Los Angeles Community College District (Election of 2008), Series 2017 J, GO Bonds

     4.00     08/01/2041        250        252,277  

Los Angeles Community College District (Election of 2008), Series 2019 K, GO Bonds

     3.00     08/01/2039        3,800        3,287,774  

Los Angeles Community College District (Election of 2008), Series 2019 K, GO Bonds

     4.00     08/01/2039        100        101,351  

Los Angeles Unified School District, Series 2020 C, GO Bonds

     4.00     07/01/2040        1,000        989,524  

Los Angeles Unified School District, Series 2020 C, GO Bonds

     3.00     07/01/2045        1,000        777,615  

Los Angeles Unified School District (Election of 2008), Series 2018 B-1, GO Bonds

     5.00     07/01/2038        1,000        1,096,690  

Madera Unified School District (Election of 2014), Series 2017, GO Bonds

     4.00     08/01/2046        3,000        2,891,740  

Marin (County of), CA Healthcare District (Election of 2013), Series 2015, GO Bonds

     4.00     08/01/2040        190        187,430  

Marin (County of), CA Healthcare District (Election of 2013), Series 2017 A, GO Bonds

     5.00     08/01/2041        15,180        16,373,871  

Marin (County of), CA Healthcare District (Election of 2013), Series 2017 A, GO Bonds

     4.00     08/01/2047        150        141,764  

Metropolitan Water District of Southern California, Series 2020 A, RB

     5.00     10/01/2045        2,000        2,219,899  

Metropolitan Water District of Southern California, Series 2021 A, RB

     5.00     10/01/2046        1,000        1,123,659  

Metropolitan Water District of Southern California, Series 2021 A, RB

     5.00     10/01/2051        1,000        1,117,953  

Moreno Valley Unified School District, Series 2021 C, GO Bonds, (INS - BAM)(a)

     3.00     08/01/2050        3,000        2,318,591  

Morgan Hill Unified School District (Election of 2012), Series 2017 B, GO Bonds

     4.00     08/01/2047        3,000        2,970,646  

Mountain View Shoreline Regional Park Community, Series 2018 A, RB, (INS - AGM)(a)

     5.00     08/01/2048        1,800        1,921,955  

Ontario (City of), CA Public Financing Authority (Civic Center Improvements), Series 2022, RB, (INS - AGM)(a)

     5.00     11/01/2052        2,500        2,719,352  

Orange (County of), CA Local Transportation Authority, Series 2019, RB

     5.00     02/15/2041        1,000        1,095,963  

Orange (County of), CA Water District, Series 2017 A, Ref. RB

     4.00     08/15/2041        2,000        2,016,662  

Oxnard Union High School District, Series 2020 B, GO Bonds

     5.00     08/01/2045        2,180        2,357,033  

Oxnard Union High School District, Series 2022 C, GO Bonds

     4.00     08/01/2047        3,000        2,923,964  

Regents of the University of California Medical Center, Series 2016 L, Ref. RB

     5.00     05/15/2041        1,000        1,058,946  

Regents of the University of California Medical Center, Series 2016 L, Ref. RB

     5.00     05/15/2047        2,605        2,736,450  

Regents of the University of California Medical Center, Series 2022 P, RB

     5.00     05/15/2042        5,000        5,533,183  

Regents of the University of California Medical Center, Series 2022, RB

     3.50     05/15/2054        15,000        12,622,750  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

 

 

  42  

 

 


 

Invesco California AMT-Free Municipal Bond ETF (PWZ)–(continued)

August 31, 2022

 

     Interest
Rate
  Maturity
Date
     Principal
Amount
(000)
     Value  

California-(continued)

          

Riverside (County of), CA Transportation Commission, Series 2021 B1, Ref. RB

     4.00     06/01/2037      $ 600      $ 583,744  

Riverside (County of), CA Transportation Commission, Series 2021 B1, Ref. RB

     4.00     06/01/2038        700        675,992  

Riverside (County of), CA Transportation Commission, Series 2021 B1, Ref. RB

     4.00     06/01/2039        675        646,620  

Riverside (County of), CA Transportation Commission, Series 2021 B1, Ref. RB

     4.00     06/01/2040        750        714,084  

Riverside (County of), CA Transportation Commission, Series 2021 B1, Ref. RB

     3.00     06/01/2049        2,000        1,460,172  

Riverside (County of), CA Transportation Commission, Series 2021 B-1, Ref. RB

     4.00     06/01/2046        625        573,597  

Sacramento (City of), CA (Convention Center Complex), Series 2018 A, RB

     5.00     06/01/2048        2,700        2,832,609  

Sacramento (City of), CA Municipal Utility District (Green Bonds), Series 2020 H, RB

     5.00     08/15/2050        7,100        7,811,181  

Sacramento (City of), CA Unified School District (Election of 2020), Series 2022 A, GO Bonds, (INS - BAM)(a)

     5.50     08/01/2047        1,500        1,695,512  

Sacramento (City of), CA Unified School District (Election of 2020), Series 2022 A, GO Bonds, (INS - BAM)(a)

     5.50     08/01/2052        3,000        3,379,892  

Sacramento (County of), CA Sanitation Districts Financing Authority, Series 2014 A, Ref. RB

     5.00     12/01/2044        1,525        1,576,338  

Sacramento City Unified School District (Measure Q) (Election of 2012), Series 2021 G, GO Bonds, (INS - AGM)(a)

     4.00     08/01/2049        1,000        942,714  

Salinas Union High School District, Series 2022 A, GO Bonds

     4.00     08/01/2047        2,500        2,373,373  

San Diego (City of), CA Association of Governments, Series 2017 A, RB

     5.00     07/01/2042        1,000        1,063,694  

San Diego (City of), CA Public Facilities Financing Authority, Series 2020 A, RB

     4.00     08/01/2045        300        287,968  

San Diego (City of), CA Public Facilities Financing Authority (Capital Improvement), Series 2015 A, RB

     5.00     10/15/2044        1,000        1,062,901  

San Diego (City of), CA Public Facilities Financing Authority (Capital Improvement), Series 2021 A, RB

     5.00     10/15/2046        1,535        1,687,249  

San Diego (City of), CA Public Facilities Financing Authority (Capital Improvement), Series 2021 A, RB

     4.00     10/15/2050        500        470,321  

San Diego (County of), CA Regional Airport Authority, Series 2019 A, Ref. RB

     5.00     07/01/2044        1,500        1,607,672  

San Diego (County of), CA Regional Airport Authority, Series 2019 A, Ref. RB

     5.00     07/01/2049        3,000        3,191,869  

San Diego (County of), CA Regional Airport Authority, Series 2021 A, RB

     4.00     07/01/2046        500        474,113  

San Diego (County of), CA Regional Airport Authority, Series 2021 A, RB

     5.00     07/01/2046        750        806,402  

San Diego (County of), CA Regional Transportation Commission, Series 2016 A, RB

     5.00     04/01/2048        1,000        1,061,011  

San Diego (County of), CA Water Authority, Series 2022 A, RB

     5.00     05/01/2047        2,500        2,835,247  

San Diego Unified School District (Election of 2012), Series 2016 F, GO Bonds

     5.00     07/01/2040        1,000        1,059,126  

San Diego Unified School District (Election of 2012), Series 2017 I, GO Bonds

     5.00     07/01/2041        13,535        14,645,501  

San Diego Unified School District (Election of 2012), Series 2017 I, GO Bonds

     5.00     07/01/2047        3,000        3,224,121  

San Diego Unified School District (Election of 2012), Series 2019 L, GO Bonds

     4.00     07/01/2049        4,560        4,333,747  

San Francisco (City & County of), CA Airport Commission (San Francisco International Airport), Second Series 2013 B, RB

     5.00     05/01/2043        6,000        6,063,502  

San Francisco (City & County of), CA Airport Commission (San Francisco International Airport), Series 2014 B, RB

     5.00     05/01/2044        2,000        2,051,374  

San Francisco (City & County of), CA Airport Commission (San Francisco International Airport), Series 2016, RB

     5.00     05/01/2046        6,970        7,340,777  

San Francisco (City & County of), CA Airport Commission (San Francisco International Airport), Series 2017 B, RB

     5.00     05/01/2047        2,000        2,127,737  

San Francisco (City & County of), CA Airport Commission (San Francisco International Airport), Series 2019 F, RB

     5.00     05/01/2050        1,540        1,635,390  

San Francisco (City & County of), CA Airport Commission (San Francisco International Airport), Series 2019, RB

     5.00     05/01/2049        3,000        3,187,767  

San Francisco (City of), CA Public Utilities Commission (Hetch Hetchy Water), Series 2020 D, RB

     3.00     11/01/2050        2,000        1,496,228  

San Francisco Bay Area Rapid Transit District (Green Bonds), Series 2019 F1, GO Bonds

     3.00     08/01/2038        3,500        3,125,879  

San Francisco Bay Area Rapid Transit District (Green Bonds) (Election of 2016), Series 2022 D-1, GO Bonds

     3.00     08/01/2042        1,000        870,807  

San Francisco Bay Area Rapid Transit District (Green Bonds) (Election of 2016), Series 2022 D-1, GO Bonds

     4.00     08/01/2047        1,500        1,483,004  

San Francisco Community College District (Election of 2020), Series 2020 A, GO Bonds

     4.00     06/15/2045        3,000        2,852,083  

San Mateo & Foster (Cities of), CA Public Financing Authority (Clean Water Program), Series 2019, RB

     4.00     08/01/2044        5,000        4,859,685  

San Mateo & Foster (Cities of), CA Public Financing Authority (Clean Water Program), Series 2019, RB

     5.00     08/01/2049        6,500        7,084,531  

San Mateo (City of), CA Joint Powers Financing Authority (Cordilleras Mental Health Center), Series 2021 A, RB

     4.00     06/15/2041        1,950        1,952,128  

San Mateo Foster City School District, Series 2021 A, GO Bonds

     2.50     08/01/2046        1,000        700,382  

San Mateo Foster City School District, Series 2021 A, GO Bonds

     2.50     08/01/2051        1,000        667,818  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

 

 

  43  

 

 


 

Invesco California AMT-Free Municipal Bond ETF (PWZ)–(continued)

August 31, 2022

 

     Interest
Rate
  Maturity
Date
     Principal
Amount
(000)
     Value  

California-(continued)

          

San Mateo Union High School District, Series 2021 B, GO Bonds

     2.00     09/01/2045      $ 1,000      $ 626,974  

San Mateo Union High School District, Series 2021 B, GO Bonds

     2.13     09/01/2048        1,000        618,092  

San Rafael City High School District (Election of 2015), Series 2018 B, GO Bonds

     4.00     08/01/2047        5,000        4,784,091  

Santa Clara (County of), CA Financing Authority, Series 2019 A, RB

     3.00     05/01/2041        1,000        828,946  

Santa Clara Unified School District (Election of 2018), Series 2019, GO Bonds

     4.00     07/01/2048        100        98,682  

Santa Clara Valley Water District, Series 2016 A, Ref. RB

     5.00     06/01/2046        4,090        4,322,811  

Sequoia Union High School District (Election of 2014), Series 2014, GO Bonds(b)(c)

     4.00     07/01/2024        6,200        6,390,094  

Simi Valley Unified School District (Election of 2016), Series 2017 A, GO Bonds

     4.00     08/01/2046        1,000        956,663  

Transbay Joint Powers Authority (Green Bonds), Series 2020 A, RB

     5.00     10/01/2049        1,200        1,263,118  

Tulare (County of), CA Local Health Care District, Series 2020, Ref. GO Bonds, (INS - BAM)(a)

     4.00     08/01/2039        2,000        1,981,415  

University of California, Series 2013 AI, RB

     5.00     05/15/2038        3,515        3,573,643  

University of California, Series 2016 AR, Ref. RB

     5.00     05/15/2046        1,115        1,188,486  

University of California, Series 2017 AV, RB

     5.25     05/15/2042        4,000        4,352,942  

University of California, Series 2018 AZ, Ref. RB

     5.00     05/15/2043        1,915        2,078,995  

University of California, Series 2018 AZ, Ref. RB

     5.00     05/15/2048        3,500        3,781,732  

University of California, Series 2019 BB, Ref. RB

     5.00     05/15/2049        705        769,304  

University of California, Series 2020 BE, Ref. RB

     4.00     05/15/2047        4,750        4,575,008  

University of California, Series 2020 BE, Ref. RB

     4.00     05/15/2050        2,000        1,905,528  

University of California, Series 2021 BH, Ref. RB

     4.00     05/15/2046        6,000        5,797,752  

University of California, Series 2021 BH, Ref. RB

     4.00     05/15/2051        4,355        4,140,646  

University of California (Limited), Series 2017 M, RB

     5.00     05/15/2042        1,725        1,855,405  

University of California (Limited), Series 2017 M, RB

     4.00     05/15/2047        125        119,709  

University of California (Limited), Series 2018 O, Ref. RB

     5.00     05/15/2058        1,500        1,611,862  

University of California (Limited), Series 2021 Q, Ref. RB

     5.00     05/15/2046        5,000        5,479,286  

Vacaville Unified School District, Series 2020 D, GO Bonds

     4.00     08/01/2045        1,000        965,682  

Vista Unified School District, Series 2022 B, GO Bonds, (INS - BAM)(a)

     5.25     08/01/2048        1,500        1,684,445  
          

 

 

 

TOTAL INVESTMENTS IN SECURITIES(d)-98.63%
(Cost $601,727,339)

             558,873,001  

OTHER ASSETS LESS LIABILITIES-1.37%

             7,783,512  
          

 

 

 

NET ASSETS-100.00%

           $ 566,656,513  
          

 

 

 

Investment Abbreviations:

AGM

  -Assured Guaranty Municipal Corp.

BAM

  -Build America Mutual Assurance Co.

GO

  -General Obligation

INS

  -Insurer

RB

  -Revenue Bonds

Ref.

  -Refunding

Notes to Schedule of Investments:

(a) 

Principal and/or interest payments are secured by the bond insurance company listed.

(b) 

Advance refunded; secured by an escrow fund of U.S. Government obligations or other highly rated collateral.

(c) 

Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put.

(d) 

Entities may either issue, guarantee, back or otherwise enhance the credit quality of a security. The entities are not primarily responsible for the issuer’s obligations but may be called upon to satisfy the issuer’s obligations. No concentration of any single entity was greater than 5% each.

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

 

 

  44  

 

 


 

Invesco CEF Income Composite ETF (PCEF)

August 31, 2022

 

Schedule of Investments

 

     Shares      Value  

Closed-End Funds-99.96%

 

Bonds-40.55%

     

Aberdeen Asia-Pacific Income Fund, Inc.(a)

     3,781,979      $ 10,892,100  

BlackRock Core Bond Trust(a)

     650,789        7,627,247  

BlackRock Credit Allocation Income Trust