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,

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

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.

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.

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

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.

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 Index^SM (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.

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.

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.

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.

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.

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.

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

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.

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

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.

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.

 

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.

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