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Invesco Semi-Annual Report to Shareholders

 

February 28, 2023

 

IBBQ      Invesco Nasdaq Biotechnology ETF

 

SOXQ     Invesco PHLX Semiconductor ETF

 

TAN        Invesco Solar ETF


 

Table of Contents

 

Schedules of Investments

  

Invesco Nasdaq Biotechnology ETF (IBBQ)

     3  

Invesco PHLX Semiconductor ETF (SOXQ)

     7  

Invesco Solar ETF (TAN)

     9  

Statements of Assets and Liabilities

     12  

Statements of Operations

     13  

Statements of Changes in Net Assets

     14  

Financial Highlights

     15  

Notes to Financial Statements

     18  

Fund Expenses

     28  

 

    2    

 

 

 

 


 

Invesco Nasdaq Biotechnology ETF (IBBQ)

February 28, 2023

(Unaudited)

Schedule of Investments(a)

 

         Shares       Value  

Common Stocks & Other Equity Interests-99.90%

 

Biotechnology-80.16%

    

2seventy bio, Inc.(b)(c)

     719       $ 9,699  

4D Molecular Therapeutics, Inc.(b)

     614       11,813  

89bio, Inc.(b)

     882       12,013  

Abcam PLC, ADR (United Kingdom)(b)

     586       8,444  

Acadia Pharmaceuticals, Inc.(b)(c)

     3,049       63,084  

Acumen Pharmaceuticals, Inc.(b)

     776       4,090  

Adaptimmune Therapeutics PLC, ADR(b)(c)

     2,742       4,853  

Adicet Bio, Inc.(b)(c)

     812       6,399  

ADMA Biologics, Inc.(b)(c)

     4,182       14,846  

Affimed N.V. (Germany)(b)(c)

     2,831       2,574  

Agios Pharmaceuticals, Inc.(b)

     1,039       26,297  

Akero Therapeutics, Inc.(b)

     879       40,003  

Alaunos Therapeutics, Inc.(b)

     4,558       2,530  

Alector, Inc.(b)

     1,568       13,391  

Alkermes PLC(b)

     3,109       83,135  

Allakos, Inc.(b)

     1,615       9,609  

Allogene Therapeutics, Inc.(b)(c)

     2,734       17,361  

Allovir, Inc.(b)(c)

     1,766       11,920  

Alnylam Pharmaceuticals, Inc.(b)

     2,329       445,887  

Alpine Immune Sciences, Inc.(b)(c)

     870       6,934  

Altimmune, Inc.(b)(c)

     932       11,734  

ALX Oncology Holdings, Inc.(b)(c)

     773       5,117  

Amarin Corp. PLC, ADR (Ireland)(b)

     7,611       15,450  

Amgen, Inc.

     5,765         1,335,520  

Amicus Therapeutics, Inc.(b)(c)

     5,303       69,947  

AnaptysBio, Inc.(b)(c)

     539       13,421  

Anavex Life Sciences Corp.(b)(c)

     1,478       14,071  

Annexon, Inc.(b)(c)

     903       4,813  

Apellis Pharmaceuticals, Inc.(b)

     2,091       136,919  

Arbutus Biopharma Corp.(b)

     2,966       8,245  

Arcellx, Inc.(b)(c)

     831       23,276  

Arcturus Therapeutics Holdings, Inc.(b)(c)

     502       8,158  

Arcutis Biotherapeutics, Inc.(b)(c)

     1,155       18,688  

Ardelyx, Inc.(b)

     3,554       10,236  

Argenx SE, ADR (Netherlands)(b)

     588       215,220  

Arrowhead Pharmaceuticals, Inc.(b)(c)

     2,000       64,600  

ARS Pharmaceuticals, Inc.(b)

     1,778       15,860  

Ascendis Pharma A/S, ADR (Denmark)(b)

     1,056       117,311  

Atara Biotherapeutics, Inc.(b)(c)

     1,799       7,286  

Aurinia Pharmaceuticals, Inc. (Canada)(b)

     2,694       24,488  

Avidity Biosciences, Inc.(b)

     1,258       29,815  

Beam Therapeutics, Inc.(b)(c)

     1,327       53,398  

BeiGene Ltd., ADR (China)(b)(c)

     906       203,515  

BELLUS Health, Inc. (Canada)(b)

     2,385       18,364  

Bicycle Therapeutics PLC, ADR (United Kingdom)(b)(c)

     484       11,001  

BioAtla, Inc.(b)

     875       2,608  

BioCryst Pharmaceuticals, Inc.(b)(c)

     3,524       31,187  

Biogen, Inc.(b)

     2,705       729,971  

BioMarin Pharmaceutical, Inc.(b)

     3,518       350,358  

Biomea Fusion, Inc.(b)

     557       7,152  

BioNTech SE, ADR (Germany)

     1,741       226,417  

Bluebird Bio, Inc.(b)

     1,959       10,187  

Blueprint Medicines Corp.(b)

     1,125       47,666  

Bridgebio Pharma, Inc.(b)(c)

     2,819       32,193  

C4 Therapeutics, Inc.(b)(c)

     928       4,891  

Caribou Biosciences, Inc.(b)

     1,157       7,046  
         Shares       Value  

Biotechnology-(continued)

    

Centessa Pharmaceuticals PLC, ADR(b)(c)

     995       $ 3,502  

Century Therapeutics, Inc.(b)(c)

     1,118       5,042  

Chinook Therapeutics, Inc.(b)(c)

     1,212       26,446  

Cogent Biosciences, Inc.(b)

     1,325       17,530  

Coherus Biosciences, Inc.(b)(c)

     1,475       9,986  

Compass Pathways PLC, ADR (United Kingdom)(b)(c)

     449       3,704  

Concert Pharmaceuticals, Inc.(b)

     1,184       9,922  

Crinetics Pharmaceuticals, Inc.(b)(c)

     1,020       20,033  

CRISPR Therapeutics AG (Switzerland)(b)(c)

     1,478       72,895  

Cullinan Oncology, Inc.(b)

     868       9,800  

CureVac N.V. (Germany)(b)

     4,206       36,340  

Cytokinetics, Inc.(b)(c)

     1,784       77,354  

Day One Biopharmaceuticals, Inc.(b)(c)

     1,394       25,677  

Deciphera Pharmaceuticals, Inc.(b)

     1,405       20,372  

Denali Therapeutics, Inc.(b)(c)

     2,565       69,640  

Design Therapeutics, Inc.(b)

     1,060       7,494  

Dyne Therapeutics, Inc.(b)

     988       12,725  

Eagle Pharmaceuticals, Inc.(b)

     247       6,916  

Editas Medicine, Inc.(b)(c)

     1,304       11,788  

Eiger BioPharmaceuticals, Inc.(b)

     836       1,572  

Enanta Pharmaceuticals, Inc.(b)

     394       19,109  

EQRx, Inc.(b)

     9,260       20,928  

Erasca, Inc.(b)(c)

     2,610       9,396  

Evelo Biosciences, Inc.(b)(c)

     2,078       1,288  

Exelixis, Inc.(b)(c)

     6,100       104,188  

Exscientia PLC, ADR (United Kingdom)(b)

     685       4,459  

Fate Therapeutics, Inc.(b)

     1,842       11,273  

FibroGen, Inc.(b)(c)

     1,776       39,427  

Foghorn Therapeutics, Inc.(b)(c)

     793       4,544  

G1 Therapeutics, Inc.(b)

     960       3,475  

Galapagos N.V., ADR (Belgium)(b)

     254       9,521  

Generation Bio Co.(b)

     1,127       4,463  

Genmab A/S, ADR (Denmark)(b)

     810       30,424  

Geron Corp.(b)(c)

     8,278       23,013  

Gilead Sciences, Inc.

     18,800         1,513,964  

Gossamer Bio., Inc.(b)(c)

     1,791       3,098  

Gracell Biotechnologies, Inc., ADR
(China)(b)

     1,264       2,541  

Graphite Bio, Inc.(b)

     1,103       2,901  

GreenLight Biosciences Holdings PBC(b)

     2,873       1,379  

Grifols S.A., ADR (Spain)(b)

     2,108       18,255  

Gritstone bio, Inc.(b)(c)

     1,581       3,873  

Halozyme Therapeutics, Inc.(b)(c)

     2,559       122,806  

HilleVax, Inc.(b)

     632       10,649  

Horizon Therapeutics PLC(b)

     4,290       469,712  

Humacyte, Inc.(b)

     1,955       5,982  

Ideaya Biosciences, Inc.(b)(c)

     912       16,097  

IGM Biosciences, Inc.(b)

     552       11,603  

I-Mab, ADR (China)(b)

     1,033       4,442  

Immuneering Corp., Class A(b)(c)

     501       2,450  

ImmunityBio, Inc.(b)

     7,539       18,395  

Immunocore Holdings PLC, ADR (United Kingdom)(b)(c)

     486       26,657  

ImmunoGen, Inc.(b)

     4,185       16,238  

Immunovant, Inc.(b)(c)

     2,443       42,679  

Incyte Corp.(b)

     4,211       324,163  

Inhibrx, Inc.(b)

     826       19,874  

Inovio Pharmaceuticals, Inc.(b)

     4,730       5,960  

 

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

 

    3    

 

 

 

 


 

Invesco Nasdaq Biotechnology ETF (IBBQ)–(continued)

February 28, 2023

(Unaudited)

    

 

         Shares       Value  

Biotechnology-(continued)

    

Insmed, Inc.(b)(c)

     2,549     $ 51,949  

Instil Bio, Inc.(b)

     2,460         1,912  

Intellia Therapeutics, Inc.(b)

     1,484       59,612  

Intercept Pharmaceuticals, Inc.(b)

     785       15,841  

Invivyd, Inc.(b)(c)

     2,066       3,595  

Ionis Pharmaceuticals, Inc.(b)(c)

     2,683       96,320  

Iovance Biotherapeutics, Inc.(b)

     2,992       21,812  

Ironwood Pharmaceuticals, Inc.(b)

     2,901       32,694  

iTeos Therapeutics, Inc.(b)

     674       11,937  

IVERIC bio, Inc.(b)(c)

     2,570       53,405  

Karuna Therapeutics, Inc.(b)(c)

     649            129,424  

Karyopharm Therapeutics, Inc.(b)

     2,154       6,505  

Keros Therapeutics, Inc.(b)(c)

     522       27,781  

Kezar Life Sciences, Inc.(b)

     1,296       8,152  

Kiniksa Pharmaceuticals Ltd., Class A(b)

     655       8,423  

Kinnate Biopharma, Inc.(b)

     837       4,419  

Kodiak Sciences, Inc.(b)

     992       6,448  

Krystal Biotech, Inc.(b)(c)

     488       39,972  

Kura Oncology, Inc.(b)

     1,294       15,424  

Kymera Therapeutics, Inc.(b)(c)

     1,034       32,447  

Legend Biotech Corp., ADR(b)(c)

     1,223       56,478  

Lexicon Pharmaceuticals, Inc.(b)(c)

     3,578       8,051  

Lyell Immunopharma, Inc.(b)(c)

     4,727       10,163  

MacroGenics, Inc.(b)

     1,166       7,101  

Madrigal Pharmaceuticals, Inc.(b)(c)

     323       87,536  

MannKind Corp.(b)(c)

     4,990       26,347  

MeiraGTx Holdings PLC(b)

     848       6,547  

Mersana Therapeutics, Inc.(b)

     1,892       11,466  

Merus N.V. (Netherlands)(b)(c)

     878       16,743  

Mirati Therapeutics, Inc.(b)(c)

     1,085       49,736  

Mirum Pharmaceuticals, Inc.(b)

     699       16,433  

Moderna, Inc.(b)

     7,269       1,009,010  

Monte Rosa Therapeutics, Inc.(b)(c)

     918       5,581  

Morphic Holding, Inc.(b)(c)

     727       30,912  

Myriad Genetics, Inc.(b)

     1,536       29,061  

Neurocrine Biosciences, Inc.(b)

     1,817       187,333  

Nkarta, Inc.(b)(c)

     925       3,885  

Novavax, Inc.(b)(c)

     1,488       13,779  

Nurix Therapeutics, Inc.(b)

     894       8,430  

Nuvalent, Inc., Class A(b)(c)

     965       29,230  

Omega Therapeutics, Inc.(b)

     911       5,885  

OmniAb, Inc.(b)(d)

     125       0  

OmniAb, Inc.(b)(d)

     125       0  

PepGen, Inc.(b)

     448       6,841  

PMV Pharmaceuticals, Inc.(b)(c)

     866       6,244  

Poseida Therapeutics, Inc.(b)(c)

     1,630       9,275  

Precigen, Inc.(b)

     4,703       5,926  

Prelude Therapeutics, Inc.(b)

     691       3,911  

Prometheus Biosciences, Inc.(b)(c)

     877       107,336  

Protagonist Therapeutics, Inc.(b)

     933       15,133  

Prothena Corp. PLC (Ireland)(b)

     910       50,742  

PTC Therapeutics, Inc.(b)(c)

     1,357       59,260  

RAPT Therapeutics, Inc.(b)

     644       18,966  

Recursion Pharmaceuticals, Inc., Class A(b)(c)

     3,429       27,946  

Regeneron Pharmaceuticals, Inc.(b)

     2,026       1,540,611  

REGENXBIO, Inc.(b)

     821       18,267  

Relay Therapeutics, Inc.(b)(c)

     2,273       36,709  

Repare Therapeutics, Inc. (Canada)(b)(c)

     796       8,159  

Replimune Group, Inc.(b)

     1,068       23,389  

REVOLUTION Medicines, Inc.(b)(c)

     1,680       44,957  
         Shares       Value  

Biotechnology-(continued)

    

Rhythm Pharmaceuticals, Inc.(b)(c)

     1,068     $ 25,963  

Rocket Pharmaceuticals, Inc.(b)(c)

     1,428       27,432  

Roivant Sciences Ltd.(b)

     13,717         110,971  

Sage Therapeutics, Inc.(b)(c)

     1,119       46,595  

Sana Biotechnology, Inc.(b)(c)

     3,616       13,271  

Sangamo Therapeutics, Inc.(b)(c)

     3,107       9,476  

Sarepta Therapeutics, Inc.(b)

     1,662            202,980  

Scholar Rock Holding Corp.(b)(c)

     979       8,400  

Seagen, Inc.(b)

     3,515       631,610  

Selecta Biosciences, Inc.(b)(c)

     2,901       4,729  

Seres Therapeutics, Inc.(b)

     2,362       11,928  

SpringWorks Therapeutics, Inc.(b)(c)

     1,177       37,546  

Stoke Therapeutics, Inc.(b)

     748       6,650  

Summit Therapeutics, Inc.(b)

     3,817       6,871  

Sutro Biopharma, Inc.(b)

     1,090       6,148  

Syndax Pharmaceuticals, Inc.(b)(c)

     1,278       32,397  

Tango Therapeutics, Inc.(b)(c)

     1,672       8,745  

Travere Therapeutics, Inc.(b)(c)

     1,217       26,969  

Twist Bioscience Corp.(b)(c)

     1,072       20,861  

Ultragenyx Pharmaceutical, Inc.(b)

     1,326       58,994  

uniQure N.V. (Netherlands)(b)

     888       18,612  

United Therapeutics Corp.(b)

     863       212,333  

UroGen Pharma Ltd.(b)

     438       4,511  

Vanda Pharmaceuticals, Inc.(b)

     1,073       6,910  

Vaxcyte, Inc.(b)

     1,488       60,963  

Veracyte, Inc.(b)(c)

     1,357       33,396  

Vertex Pharmaceuticals, Inc.(b)

     4,857       1,409,939  

Verve Therapeutics, Inc.(b)(c)

     1,168       22,192  

Vir Biotechnology, Inc.(b)(c)

     2,513       57,296  

Xencor, Inc.(b)(c)

     1,134       36,435  

Xenon Pharmaceuticals, Inc. (Canada)(b)(c)

     1,176       46,405  

Zai Lab Ltd., ADR (China)(b)

     1,303       48,406  

Zentalis Pharmaceuticals, Inc.(b)

     1,082       20,482  
    

 

 

 
       15,566,842  
    

 

 

 

Health Care Equipment & Supplies-0.82%

 

 

Cue Health, Inc.(b)

     2,833       6,091  

Novocure Ltd.(b)(c)

     1,984       152,709  
    

 

 

 
       158,800  
    

 

 

 

Health Care Providers & Services-0.47%

 

 

23andMe Holding Co., Class A(b)

     5,436       13,644  

Castle Biosciences, Inc.(b)(c)

     500       12,590  

Guardant Health, Inc.(b)

     1,933       59,710  

PetIQ, Inc.(b)(c)

     549       5,117  
    

 

 

 
       91,061  
    

 

 

 

Life Sciences Tools & Services-4.97%

 

 

AbCellera Biologics, Inc. (Canada)(b)

     5,386       45,242  

Absci Corp.(b)

     1,752       3,714  

Adaptive Biotechnologies Corp.(b)(c)

     2,711       23,179  

Codexis, Inc.(b)

     1,245       6,020  

Illumina, Inc.(b)

     2,978       593,218  

Maravai LifeSciences Holdings, Inc., Class A(b)

     2,491       36,742  

MaxCyte, Inc.(b)

     1,935       8,785  

Medpace Holdings, Inc.(b)(c)

     588       114,001  

NanoString Technologies, Inc.(b)

     884       8,628  

Nautilus Biotechnology, Inc.(b)

     2,365       5,014  

Pacific Biosciences of California, Inc.(b)(c)

     4,269       38,763  

 

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

 

    4    

 

 

 

 


 

Invesco Nasdaq Biotechnology ETF (IBBQ)–(continued)

February 28, 2023

(Unaudited)

    

 

         Shares       Value  

Life Sciences Tools & Services-(continued)

 

Quantum-Si, Inc.(b)

     2,273       $ 4,137  

Syneos Health, Inc.(b)

     1,943       78,147  
    

 

 

 
            965,590  
    

 

 

 

Pharmaceuticals-13.48%

    

Aclaris Therapeutics, Inc.(b)

     1,264       15,749  

Amphastar Pharmaceuticals, Inc.(b)

     916       29,184  

Amylyx Pharmaceuticals, Inc.(b)(c)

     1,248       43,455  

ANI Pharmaceuticals, Inc.(b)

     331       13,849  

Arvinas, Inc.(b)(c)

     1,009       30,926  

AstraZeneca PLC, ADR (United Kingdom)

     11,565       753,807  

ATAI Life Sciences N.V. (Germany)(b)

     3,145       5,284  

Atea Pharmaceuticals, Inc.(b)(c)

     1,579       5,590  

Avadel Pharmaceuticals PLC, ADR(b)(c)

     1,153       11,472  

Axsome Therapeutics, Inc.(b)(c)

     818       55,779  

Cara Therapeutics, Inc.(b)(c)

     1,019       10,353  

Collegium Pharmaceutical, Inc.(b)(c)

     636       16,873  

Cymabay Therapeutics, Inc.(b)(c)

     1,797       14,376  

DICE Therapeutics, Inc.(b)

     898       26,796  

Edgewise Therapeutics, Inc.(b)(c)

     1,198       11,477  

Esperion Therapeutics, Inc.(b)

     1,397       8,633  

Evolus, Inc.(b)

     1,066       9,669  

Fulcrum Therapeutics, Inc.(b)

     1,165       7,037  

Harmony Biosciences Holdings, Inc.(b)(c)

     1,119       49,270  

Harrow Health, Inc.(b)(c)

     520       9,318  

Hutchmed China Ltd., ADR (China)(b)

     701       11,602  

Innoviva, Inc.(b)(c)

     1,323       15,969  

Intra-Cellular Therapies, Inc.(b)

     1,789       87,715  

Jazz Pharmaceuticals PLC(b)

     1,190       167,076  

Ligand Pharmaceuticals, Inc.(b)

     320       23,085  

Marinus Pharmaceuticals, Inc.(b)(c)

     905       6,244  

Nektar Therapeutics(b)

     3,498       4,827  

NGM Biopharmaceuticals, Inc.(b)(c)

     1,549       7,342  

Ocular Therapeutix, Inc.(b)(c)

     1,460       8,818  

Omeros Corp.(b)(c)

     1,189       4,482  

Optinose, Inc.(b)

     2,082       3,748  

Pacira BioSciences, Inc.(b)

     869       36,993  

Phathom Pharmaceuticals, Inc.(b)(c)

     789       6,754  

Phibro Animal Health Corp., Class A

     386       6,064  
         Shares       Value  

Pharmaceuticals-(continued)

    

Pliant Therapeutics, Inc.(b)

     1,081       $ 34,441  

Provention Bio, Inc.(b)(c)

     1,653       13,720  

Reata Pharmaceuticals, Inc., Class A(b)(c)

     600       18,702  

Revance Therapeutics, Inc.(b)(c)

     1,548       53,716  

Royalty Pharma PLC, Class A

     8,352       299,419  

Sanofi, ADR

     5,470       256,269  

SIGA Technologies, Inc.(c)

     1,384       9,480  

Supernus Pharmaceuticals, Inc.(b)

     1,019       38,304  

Tarsus Pharmaceuticals, Inc.(b)

     506       7,838  

Terns Pharmaceuticals, Inc.(b)

     936       9,482  

Theravance Biopharma, Inc.(b)

     1,277       13,792  

Ventyx Biosciences, Inc.(b)(c)

     1,065       46,061  

Verona Pharma PLC, ADR (United Kingdom)(b)

     1,151       24,677  

Viatris, Inc.

     22,959       261,733  

WaVe Life Sciences Ltd.(b)(c)

     1,868       7,846  

Xeris Biopharma Holdings, Inc.(b)

     2,578       3,558  
    

 

 

 
       2,618,654  
    

 

 

 

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)-99.90%
(Cost $24,610,981)

 

    19,400,947  
    

 

 

 

Investments Purchased with Cash Collateral from Securities on Loan

 

 

Money Market Funds-17.55%

 

Invesco Private Government Fund,
4.58%(e)(f)(g)

     933,878       933,878  

Invesco Private Prime Fund, 4.83%(e)(f)(g)

     2,473,934       2,474,429  
    

 

 

 

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $3,408,437)

 

    3,408,307  
    

 

 

 

TOTAL INVESTMENTS IN SECURITIES-117.45%
(Cost $28,019,418)

 

    22,809,254  

OTHER ASSETS LESS LIABILITIES-(17.45)%

 

    (3,389,202
    

 

 

 

NET ASSETS-100.00%

     $ 19,420,052  
    

 

 

 

Investment Abbreviations:

ADR-American Depositary Receipt

 

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

 

    5    

 

 

 

 


 

Invesco Nasdaq Biotechnology ETF (IBBQ)–(continued)

February 28, 2023

(Unaudited)

    

 

Notes to Schedule of Investments:

(a) 

Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

(b) 

Non-income producing security.

(c) 

All or a portion of this security was out on loan at February 28, 2023.

(d) 

Security valued using significant unobservable inputs (Level 3). See Note 4.

(e) 

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 six months ended February 28, 2023.

 

     Value
August 31,  2022
     Purchases
at Cost
     Proceeds
from Sales
    Change in
Unrealized
Appreciation
(Depreciation)
    

Realized

    Gain    

    

Value

February 28, 2023

     Dividend
Income
 
Investments in Affiliated Money Market Funds:                                           
Invesco Government & Agency Portfolio, Institutional Class                $ -         $ 62,619      $ (62,619               $ -                             $ -                              $ -                  $ 24  
Investments Purchased with Cash Collateral from Securities on Loan:                                           
Invesco Private Government Fund         749,198           4,338,193        (4,153,513        -             -              933,878           16,881
Invesco Private Prime Fund         1,937,694           9,507,485        (8,970,697        (215           162              2,474,429           45,931
     

 

 

       

 

 

    

 

 

      

 

 

         

 

 

          

 

 

       

 

 

 
Total       $ 2,686,892         $ 13,908,297      $ (13,186,829      $ (215         $ 162            $ 3,408,307         $ 62,836  
     

 

 

       

 

 

    

 

 

      

 

 

         

 

 

          

 

 

       

 

 

 

 

*

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.

 

(f) 

The rate shown is the 7-day SEC standardized yield as of February 28, 2023.

(g) 

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.

Portfolio Composition

Industry Breakdown (% of the Fund’s Net Assets)

as of February 28, 2023

 

   

Biotechnology

   80.16

Pharmaceuticals

   13.48

Life Sciences Tools & Services

     4.97

Industry Types Each Less Than 3%

     1.29
Money Market Funds Plus Other Assets Less Liabilities      0.10

 

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

 

    6    

 

 

 

 


 

Invesco PHLX Semiconductor ETF (SOXQ)

February 28, 2023

(Unaudited)

    

Schedule of Investments(a)

 

     Shares   Value  

Common Stocks & Other Equity Interests-99.93%

 

Electronic Equipment, Instruments & Components-1.52%

 

Coherent Corp.(b)

     11,872     $ 512,039  

IPG Photonics Corp.(b)

     4,172       514,157  

Novanta, Inc.(b)

     3,062       480,459  
    

 

 

 
       1,506,655  
    

 

 

 

Life Sciences Tools & Services-0.29%

    

Azenta, Inc.(b)

     6,426       282,037  
    

 

 

 

Semiconductors & Semiconductor Equipment-98.12%

 

Advanced Micro Devices, Inc.(b)

     97,314       7,646,934  

Analog Devices, Inc.

     22,033       4,042,395  

Applied Materials, Inc.

     34,562       4,014,376  

ASML Holding N.V., New York Shares (Netherlands)

     6,228       3,847,222  

Broadcom, Inc.

     13,748       8,170,299  

Entegris, Inc.

     12,777       1,088,984  

GLOBALFOUNDRIES, Inc.(b)(c)

     46,729       3,053,273  

Intel Corp.

        125,954         3,140,033  

KLA Corp.

     9,633       3,654,568  

Lam Research Corp.

     8,018       3,896,828  

Lattice Semiconductor Corp.(b)

     11,745       997,855  

Marvell Technology, Inc.

     73,076       3,299,381  

Microchip Technology, Inc.

     47,152       3,820,727  

Micron Technology, Inc.

     65,698       3,798,658  

Monolithic Power Systems, Inc.

     4,023       1,948,299  

NVIDIA Corp.

     44,763         10,392,178  

NXP Semiconductors N.V. (China)

     21,542       3,844,816  

ON Semiconductor Corp.(b)

     37,063       2,869,047  

Qorvo, Inc.(b)

     8,686       876,331  

QUALCOMM, Inc.

     59,889       7,398,088  
     Shares   Value  

Semiconductors & Semiconductor Equipment-(continued)

 

Skyworks Solutions, Inc.

     13,725       $ 1,531,298  

Synaptics, Inc.(b)

     3,415       401,638  

Taiwan Semiconductor Manufacturing Co. Ltd., ADR (Taiwan)

     45,647       3,974,484  

Teradyne, Inc.

     13,349       1,350,118  

Texas Instruments, Inc.

     41,975       7,196,614  

Wolfspeed, Inc.(b)(c)

     10,647       787,665  
    

 

 

 
       97,042,109  
    

 

 

 

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)-99.93%
(Cost $100,137,492)

       98,830,801  
    

 

 

 

Investments Purchased with Cash Collateral from Securities on Loan

 

 

Money Market Funds-3.21%

 

Invesco Private Government Fund,
4.58%(d)(e)(f)

     888,523       888,523  

Invesco Private Prime Fund, 4.83%(d)(e)(f)

     2,284,316       2,284,773  
    

 

 

 

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $3,173,376)

 

    3,173,296  
    

 

 

 

TOTAL INVESTMENTS IN SECURITIES-103.14%
(Cost $103,310,868)

 

    102,004,097  

OTHER ASSETS LESS LIABILITIES-(3.14)%

 

    (3,107,058
    

 

 

 

NET ASSETS-100.00%

 

  $ 98,897,039  
    

 

 

 

Investment Abbreviations:

ADR-American Depositary Receipt

Notes to Schedule of Investments:

(a) 

Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

(b) 

Non-income producing security.

(c) 

All or a portion of this security was out on loan at February 28, 2023.

(d) 

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 six months ended February 28, 2023.

 

     Value
August 31,  2022
     Purchases
at Cost
     Proceeds
from  Sales
    Change in
Unrealized
Appreciation
(Depreciation)
     Realized
Gain
     Value
February 28,  2023
     Dividend
Income
 
Investments in Affiliated Money Market Funds:                                            
Invesco Government & Agency Portfolio, Institutional Class                      $ -                  $ 764,991      $ (764,991               $   -                              $   -                            $         -                $ 472  

 

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

 

    7    

 

 

 

 


 

Invesco PHLX Semiconductor ETF (SOXQ)–(continued)

February 28, 2023

(Unaudited)

    

 

     Value
August 31, 2022
   Purchases
at Cost
   Proceeds
from Sales
  Change in
Unrealized
Appreciation
(Depreciation)
   Realized
Gain
  

Value

February 28, 2023

   Dividend
Income
Investments Purchased with Cash Collateral from Securities on Loan:                                                                         
Invesco Private Government Fund                        $ -                  $ 7,849,763      $ (6,961,240 )                 $ -                      $ -                              $ 888,523                  $ 8,546 *
Invesco Private Prime Fund             -             17,202,433        (14,917,608 )            (80 )                 28                  2,284,773             24,589 *
         

 

 

           

 

 

      

 

 

          

 

 

               

 

 

                

 

 

           

 

 

 
Total           $ -           $ 25,817,187      $ (22,643,839 )          $ (80 )               $ 28                $ 3,173,296           $ 33,607
         

 

 

           

 

 

      

 

 

          

 

 

               

 

 

                

 

 

           

 

 

 

 

*

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.

 

(e) 

The rate shown is the 7-day SEC standardized yield as of February 28, 2023.

(f) 

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.

Portfolio Composition

Industry Breakdown (% of the Fund’s Net Assets)

as of February 28, 2023

 

   
Semiconductors & Semiconductor
Equipment
   98.12
Industry Types Each Less Than 3%      1.81
Money Market Funds Plus Other Assets
Less Liabilities
     0.07

 

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

 

    8    

 

 

 

 


 

Invesco Solar ETF (TAN)

February 28, 2023

(Unaudited)

Schedule of Investments(a)

 

     Shares   Value  

Common Stocks & Other Equity Interests-99.84%

 

Building Products-0.64%

    

Triumph New Energy Co. Ltd., H Shares (China)(b)(c)(d)

     13,542,458     $ 14,871,774  
    

 

 

 

Chemicals-2.57%

    

Hanwha Solutions Corp. (South Korea)(c)

     1,901,899       59,791,421  
    

 

 

 

Construction & Engineering-1.45%

    

Emeren Group Ltd., ADR (China)(c)(d)

     2,701,793       12,239,122  

Xinte Energy Co. Ltd., H Shares
(China)(d)

     9,720,354       21,423,291  
    

 

 

 
       33,662,413  
    

 

 

 

Electrical Equipment-13.35%

    

Array Technologies, Inc.(c)(d)

     3,772,117       70,689,473  

Shoals Technologies Group, Inc., Class A(c)(d)

     2,913,413       71,495,155  

Soltec Power Holdings S.A. (Spain)(c)(d)

     1,999,244       12,318,358  

SunPower Corp.(c)(d)

     2,729,949       41,003,834  

Sunrun, Inc.(c)(d)

     4,799,387       115,377,263  
    

 

 

 
       310,884,083  
    

 

 

 

Independent Power and Renewable Electricity Producers-20.45%

 

Altus Power, Inc.(c)(d)

     2,059,922       13,945,672  

Atlantica Sustainable Infrastructure PLC (Spain)(d)

     2,036,677       56,212,285  

Doral Group Renewable Energy Resources Ltd. (Israel)(c)(d)

     4,068,364       7,740,249  

Encavis AG (Germany)

     3,551,553       69,848,328  

Energix-Renewable Energies Ltd. (Israel)

     6,131,994       16,870,118  

Enlight Renewable Energy Ltd.
(Israel)(c)(d)

     1,833,587       30,000,953  

GCL New Energy Holdings Ltd.
(China)(c)(d)

     62,130,336       8,152,653  

Grenergy Renovables S.A. (Spain)(c)(d)

     700,533       21,648,560  

Neoen S.A. (France)(d)(e)

     933,413       33,814,470  

OY Nofar Energy Ltd. (Israel)(c)

     747,941       18,017,741  

ReNew Energy Global PLC, Class A (India)(c)(d)

     2,451,653       10,640,174  

RENOVA, Inc. (Japan)(c)(d)

     1,038,968       16,017,566  

Scatec ASA (South Africa)(e)

     2,787,954       18,959,020  

Solaria Energia y Medio Ambiente S.A. (Spain)(c)

     2,716,490       50,126,598  

Sunnova Energy International, Inc.(c)(d)

     3,132,149       55,689,609  

West Holdings Corp. (Japan)(d)

     905,756       22,308,933  

Xinyi Energy Holdings Ltd. (China)(d)

       81,297,784         26,099,805  
    

 

 

 
          476,092,734  
    

 

 

 

Mortgage REITs-1.95%

    

Hannon Armstrong Sustainable Infrastructure Capital, Inc.(d)

     1,448,780       45,506,180  
    

 

 

 

Semiconductors & Semiconductor Equipment-59.43%

 

Canadian Solar, Inc. (Canada)(c)(d)

     1,633,022       64,912,624  

Daqo New Energy Corp., ADR (China)(c)

     1,633,177       72,153,760  
     Shares   Value  

Semiconductors & Semiconductor Equipment-(continued)

 

Enphase Energy, Inc.(c)

     770,546     $ 162,223,049  

First Solar, Inc.

     1,631,089       275,882,393  

Flat Glass Group Co. Ltd., H Shares (China)(d)

     14,803,221       39,132,026  

GCL Technology Holdings Ltd.
(China)(c)(d)

     473,448,222         121,837,749  

Gigasolar Materials Corp. (Taiwan)(c)

     2,274,000       8,060,257  

Hyundai Energy Solutions Co. Ltd. (South Korea)

     330,083       12,198,042  

JinkoSolar Holding Co. Ltd., ADR
(China)(c)(d)

     1,179,355       62,505,815  

Maxeon Solar Technologies Ltd.(c)(d)

     1,084,273       19,083,205  

Meyer Burger Technology AG (Switzerland)(c)(d)

     92,244,021       68,647,858  

Motech Industries, Inc. (Taiwan)

     15,736,000       14,641,382  

SMA Solar Technology AG
(Germany)(c)(d)

     561,335       43,992,378  

SolarEdge Technologies, Inc.(c)

     775,502       246,547,596  

TSEC Corp. (Taiwan)(c)

     19,078,000       23,229,584  

United Renewable Energy Co. Ltd. (Taiwan)(c)

     50,400,458       34,323,159  

Xinyi Solar Holdings Ltd. (China)

     107,338,951       114,593,338  
    

 

 

 
       1,383,964,215  
    

 

 

 

Total Common Stocks & Other Equity Interests
(Cost $2,714,387,671)

 

    2,324,772,820  
    

 

 

 

Money Market Funds-0.03%

 

Invesco Government & Agency Portfolio, Institutional Class, 4.51%(b)(f)
(Cost $761,253)

     761,253       761,253  
    

 

 

 

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)-99.87%
(Cost $2,715,148,924)

 

    2,325,534,073  
    

 

 

 
Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds-16.25%

 

Invesco Private Government Fund,
4.58%(b)(f)(g)

     105,885,675       105,885,675  

Invesco Private Prime Fund, 4.83%(b)(f)(g)

     272,333,979       272,388,437  
    

 

 

 

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $378,287,845)

 

    378,274,112  
    

 

 

 

TOTAL INVESTMENTS IN SECURITIES-116.12%
(Cost $3,093,436,769)

 

    2,703,808,185  

OTHER ASSETS LESS LIABILITIES-(16.12)%

 

    (375,298,231
    

 

 

 

NET ASSETS-100.00%

 

  $ 2,328,509,954  
    

 

 

 

Investment Abbreviations:

ADR-American Depositary Receipt

 

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

 

    9    

 

 

 

 


 

Invesco Solar ETF (TAN)–(continued)

February 28, 2023

(Unaudited)

    

 

Notes to Schedule of Investments:

(a) 

Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

(b) 

Affiliated issuer. The issuer is affiliated by having an investment adviser that is under common control of Invesco Ltd. and/or is an “affiliated person” under the Investment Company Act of 1940, as amended (the “1940 Act”), which defines “affiliated person” to include an issuer of which a fund holds 5% or more of the outstanding voting securities. For the Investments in Other Affiliates below, the Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the 1940 Act) of that issuer. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the six months ended February 28, 2023.

 

     Value
August 31,  2022
     Purchases
at Cost
     Proceeds
from Sales
   

Change in

Unrealized

Appreciation

(Depreciation)

     Realized
Gain
(Loss)
   

Value

February 28, 2023

     Dividend
Income
 
Investments in Affiliated Money Market Funds:                                    
Invesco Government & Agency Portfolio, Institutional Class       $ -         $ 49,563,995      $ (48,802,742      $ -        $ -        $ 761,253         $ 63,161  
Investments Purchased with Cash Collateral from Securities on Loan:                                    
Invesco Private Government Fund         190,757,568           248,426,821        (333,298,714        -                   -          105,885,675                    2,019,243
Invesco Private Prime Fund         493,969,145           599,222,845        (820,812,332        (54,127        62,906          272,388,437           5,470,708
Investments in Other Affiliates:                                    
Motech Industries, Inc.**         18,434,760           8,449,887        (11,965,853        3,549,852          (3,827,264        14,641,382           -  
Triumph New Energy Co. Ltd., H Shares***         20,436,951           6,050,561        (6,237,810        (3,667,800        (1,710,128        14,871,774           -  
TSEC Corp.**,****         28,352,920           7,202,846        (10,168,703        404,795          (2,562,274        23,229,584           -  
     

 

 

       

 

 

    

 

 

      

 

 

      

 

 

      

 

 

       

 

 

 
Total       $ 751,951,344         $ 918,916,955      $ (1,231,286,154      $ 232,720        $ (8,036,760      $ 431,778,105         $ 7,553,112  
     

 

 

       

 

 

    

 

 

      

 

 

      

 

 

      

 

 

       

 

 

 

 

*

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.

**

As of February 28, 2023, this security was not considered as an affiliate of the Fund.

***

Formerly known as Luoyang Glass Co. Ltd., H Shares.

****

As of August 31, 2022, this security was not considered as an affiliate of the Fund.

 

(c) 

Non-income producing security.

(d) 

All or a portion of this security was out on loan at February 28, 2023.

(e) 

Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the “1933 Act”). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at February 28, 2023 was $52,773,490, which represented 2.27% of the Fund’s Net Assets.

(f) 

The rate shown is the 7-day SEC standardized yield as of February 28, 2023.

(g) 

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.

This Fund has holdings greater than 10% of net assets in the following country:

 

China

     21.17

 

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

 

    10    

 

 

 

 


 

Invesco Solar ETF (TAN)–(continued)

February 28, 2023

(Unaudited)

    

 

Portfolio Composition

Industry Breakdown (% of the Fund’s Net Assets)

as of February 28, 2023

 

   
Semiconductors & Semiconductor Equipment    59.43
Independent Power and Renewable Electricity Producers    20.45
Electrical Equipment    13.35
Industry Types Each Less Than 3%      6.61
Money Market Funds Plus Other Assets Less Liabilities      0.16

 

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

 

    11    

 

 

 

 


 

Statements of Assets and Liabilities

February 28, 2023

(Unaudited)

    

 

    

Invesco Nasdaq

Biotechnology

    ETF (IBBQ)    

    

Invesco PHLX
Semiconductor

    ETF (SOXQ)    

         

Invesco Solar
    ETF (TAN)    

 

Assets:

                     

Unaffiliated investments in securities, at value(a)

                 $ 19,400,947                             $ 98,830,801             $ 2,309,901,046  

Affiliated investments in securities, at value

        3,408,307             3,173,296             393,907,139  

Foreign currencies, at value

        -             -             4,141,301  

Receivable for:

                     

Dividends

        27,035             112,883             136,651  

Securities lending

        1,080             7,316             106,431  

Investments sold

        24,114             -             415,742  

Fund shares sold

        -             -             90,350  

Foreign tax reclaims

        -             -             172,190  

Other assets

        -             -             12,051  
     

 

 

         

 

 

         

 

 

 

Total assets

        22,861,483             102,124,296             2,708,882,901  
     

 

 

         

 

 

         

 

 

 

Liabilities:

                     

Due to custodian

        30,056             39,136             1,107  

Payable for:

                     

Investments purchased

        -             -             200  

Collateral upon return of securities loaned

        3,408,437             3,173,376             378,287,845  

Accrued unitary management fees

        2,938             14,745             -  

Accrued advisory fees

        -             -             941,566  

Accrued trustees’ and officer’s fees

        -             -             20,292  

Accrued expenses

        -             -             1,114,048  

Accrued tax expenses

        -             -             7,889  
     

 

 

         

 

 

         

 

 

 

Total liabilities

        3,441,431             3,227,257             380,372,947  
     

 

 

         

 

 

         

 

 

 

Net Assets

      $ 19,420,052           $ 98,897,039           $ 2,328,509,954  
     

 

 

         

 

 

         

 

 

 

Net assets consist of:

                     

Shares of beneficial interest

      $ 26,135,286           $ 104,753,696           $ 3,431,785,774  

Distributable earnings (loss)

        (6,715,234           (5,856,657           (1,103,275,820
     

 

 

         

 

 

         

 

 

 

Net Assets

      $ 19,420,052           $ 98,897,039           $ 2,328,509,954  
     

 

 

         

 

 

         

 

 

 

Shares outstanding (unlimited amount authorized, $0.01 par value)

        950,001             4,240,001             31,288,000  

Net asset value

      $ 20.44           $ 23.32           $ 74.42  
     

 

 

         

 

 

         

 

 

 

Market price

      $ 20.47           $ 23.34           $ 74.29  
     

 

 

         

 

 

         

 

 

 

Unaffiliated investments in securities, at cost

      $ 24,610,981           $ 100,137,492           $ 2,697,931,415  
     

 

 

         

 

 

         

 

 

 

Affiliated investments in securities, at cost

      $ 3,408,437           $ 3,173,376           $ 395,505,354  
     

 

 

         

 

 

         

 

 

 

Foreign currencies, at cost

      $ -           $ -           $ 3,932,311  
     

 

 

         

 

 

         

 

 

 

(a) Includes securities on loan with an aggregate value of:

      $ 3,350,778           $ 3,133,664           $ 370,911,757  
     

 

 

         

 

 

         

 

 

 

 

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

 

    12    

 

 

 

 


 

Statements of Operations

For the six months ended February 28, 2023

(Unaudited)

    

 

    

Invesco Nasdaq

Biotechnology

    ETF (IBBQ)    

    

Invesco PHLX

Semiconductor

    ETF (SOXQ)    

           

Invesco Solar

    ETF (TAN)    

 

Investment income:

                     

Unaffiliated dividend income

      $ 76,101           $ 559,195           $ 2,933,224  

Affiliated dividend income

                 24                             472             63,161  

Non-cash dividend income

        -             -             1,252,206  

Securities lending income, net

        6,757             27,414             1,214,459  

Foreign withholding tax

        -             (13,454           (104,716
     

 

 

         

 

 

         

 

 

 

Total investment income

        82,882             573,627             5,358,334  
     

 

 

         

 

 

         

 

 

 

Expenses:

                     

Unitary management fees

        19,061             71,871             -  

Advisory fees

        -             -             6,386,150  

Sub-licensing fees

        -             -             1,788,118  

Accounting & administration fees

        -             -             86,901  

Custodian & transfer agent fees

        -             -             165,619  

Trustees’ and officer’s fees

        -             -             16,340  

Other expenses

        -             -             131,315  
     

 

 

         

 

 

         

 

 

 

Total expenses

        19,061             71,871             8,574,443  
     

 

 

         

 

 

         

 

 

 

Less: Waivers

        (1           (12           (1,508
     

 

 

         

 

 

         

 

 

 

Net expenses

        19,060             71,859             8,572,935  
     

 

 

         

 

 

         

 

 

 

Net investment income (loss)

        63,822             501,768             (3,214,601
     

 

 

         

 

 

         

 

 

 

Realized and unrealized gain (loss) from:

                     

Net realized gain (loss) from:

                     

Unaffiliated investment securities

        (900,119           (3,748,021           (120,067,201

Affiliated investment securities

        162             28             (8,249,809

Unaffiliated in-kind redemptions

        186,816             952,137             50,113,890  

Affiliated in-kind redemptions

        -             -             213,049  

Foreign currencies

        -             -             192,231  
     

 

 

         

 

 

         

 

 

 

Net realized gain (loss)

        (713,141           (2,795,856           (77,797,840
     

 

 

         

 

 

         

 

 

 

Change in net unrealized appreciation (depreciation) of:

                     

Unaffiliated investment securities

        1,793,012             13,887,952             (307,415,566

Affiliated investment securities

        (215           (80           (52,513

Foreign currencies

        -             -             207,536  
     

 

 

         

 

 

         

 

 

 

Change in net unrealized appreciation (depreciation)

        1,792,797             13,887,872             (307,260,543
     

 

 

         

 

 

         

 

 

 

Net realized and unrealized gain (loss)

        1,079,656             11,092,016             (385,058,383
     

 

 

         

 

 

         

 

 

 

Net increase (decrease) in net assets resulting from operations

      $ 1,143,478           $ 11,593,784           $ (388,272,984
     

 

 

         

 

 

         

 

 

 

 

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

 

    13    

 

 

 

 


 

Statements of Changes in Net Assets

For the six months ended February 28, 2023 and the year ended August 31, 2022

(Unaudited)

    

 

     Invesco Nasdaq
Biotechnology ETF (IBBQ)
     Invesco PHLX
Semiconductor ETF (SOXQ)
     Invesco Solar
ETF (TAN)
 
     Six Months Ended
February 28,

2023
     Year Ended
August 31,

      2022       
     Six Months Ended
February 28,

2023
     Year Ended
August 31,

      2022       
     Six Months Ended
February 28,

2023
     Year Ended
August 31,

2022
 

Operations:

                                             

Net investment income (loss)

      $ 63,822           $ 226,454           $ 501,768           $ 712,963           $ (3,214,601         $ (6,607,150

Net realized gain (loss)

        (713,141           (918,325           (2,795,856           5,375,577             (77,797,840           62,159,308  

Change in net unrealized appreciation (depreciation)

               1,792,797                           (9,312,583                         13,887,872                           (18,852,741                         (307,260,543           (273,869,705
     

 

 

         

 

 

         

 

 

         

 

 

         

 

 

         

 

 

 

Net increase (decrease) in net assets resulting from operations

        1,143,478             (10,004,454           11,593,784             (12,764,201           (388,272,984           (218,317,547
     

 

 

         

 

 

         

 

 

         

 

 

         

 

 

         

 

 

 

Distributions to Shareholders from:

 

Distributable earnings

        (79,360           (290,468           (455,923           (728,394           -             -  
     

 

 

         

 

 

         

 

 

         

 

 

         

 

 

         

 

 

 

Shareholder Transactions:

 

Proceeds from shares sold

        -             35,536,414             33,784,478             62,816,295             383,545,437             1,842,850,588  

Value of shares repurchased

        (1,997,776           (56,556,737           (6,410,952           (52,100,885           (642,244,999           (1,867,798,055
     

 

 

         

 

 

         

 

 

         

 

 

         

 

 

         

 

 

 

Net increase (decrease) in net assets resulting from share transactions

        (1,997,776           (21,020,323           27,373,526             10,715,410             (258,699,562           (24,947,467
     

 

 

         

 

 

         

 

 

         

 

 

         

 

 

         

 

 

 

Net increase (decrease) in net assets

        (933,658           (31,315,245           38,511,387             (2,777,185           (646,972,546           (243,265,014
     

 

 

         

 

 

         

 

 

         

 

 

         

 

 

         

 

 

 

Net assets:

                                             

Beginning of period

        20,353,710             51,668,955             60,385,652             63,162,837             2,975,482,500             3,218,747,514  
     

 

 

         

 

 

         

 

 

         

 

 

         

 

 

         

 

 

 

End of period

      $ 19,420,052           $ 20,353,710           $ 98,897,039           $ 60,385,652           $ 2,328,509,954           $ 2,975,482,500  
     

 

 

         

 

 

         

 

 

         

 

 

         

 

 

         

 

 

 

Changes in Shares Outstanding:

 

Shares sold

        -             1,610,000             1,700,000             2,380,000             4,720,000             22,400,000  

Shares repurchased

        (100,000           (2,480,000           (320,000           (1,860,000           (8,720,000           (24,480,000

Shares outstanding, beginning of period

        1,050,001             1,920,001             2,860,001             2,340,001             35,288,000             37,368,000  
     

 

 

         

 

 

         

 

 

         

 

 

         

 

 

         

 

 

 

Shares outstanding, end of period

        950,001             1,050,001             4,240,001             2,860,001             31,288,000             35,288,000  
     

 

 

         

 

 

         

 

 

         

 

 

         

 

 

         

 

 

 

 

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

 

    14    

 

 

 

 


 

Financial Highlights

Invesco Nasdaq Biotechnology ETF (IBBQ)

 

    

Six Months Ended

February 28,

2023

      (Unaudited)       

    

Year Ended August 31,

                  2022                 

    

For the Period

June 9, 2021(a)

Through

August 31,

          2021           

 

Per Share Operating Performance:

                       

Net asset value at beginning of period

                       $ 19.38                            $ 26.91                                         $ 25.34    
     

 

 

         

 

 

         

 

 

   

Net investment income(b)

        0.07             0.17             0.04    

Net realized and unrealized gain (loss) on investments

        1.07             (7.47           1.53    
     

 

 

         

 

 

         

 

 

   

Total from investment operations

        1.14             (7.30           1.57    
     

 

 

         

 

 

         

 

 

   

Distributions to shareholders from:

                       

Net investment income

        (0.08           (0.23           -    
     

 

 

         

 

 

         

 

 

   

Net asset value at end of period

      $ 20.44           $ 19.38           $ 26.91    
     

 

 

         

 

 

         

 

 

   

Market price at end of period(c)

      $ 20.47           $ 19.40           $ 26.87    
     

 

 

         

 

 

         

 

 

   

Net Asset Value Total Return(d)

        5.89           (27.24 )%            6.19 %(e)   

Market Price Total Return(d)

        5.93           (27.06 )%            6.04 %(e)   

Ratios/Supplemental Data:

                       

Net assets at end of period (000’s omitted)

      $ 19,420           $ 20,354           $ 51,669    

Ratio to average net assets of:

                       

Expenses, after Waivers

        0.19 %(f)            0.11           - %(f)    

Expenses, prior to Waivers

        0.19 %(f)            0.19           0.19 %(f)   

Net investment income

        0.64 %(f)            0.76           0.65 %(f)   

Portfolio turnover rate(g)

        7           22           8  

 

(a) 

Commencement of investment operations.

(b) 

Based on average shares outstanding.

(c) 

The mean between the last bid and ask prices.

(d) 

Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.

(e) 

The net asset value total return from Fund Inception (June 11, 2021, the first day of trading on the exchange) to August 31, 2021 was 5.16%. The market price total return from Fund Inception to August 31, 2021 was 5.00%.

(f) 

Annualized.

(g) 

Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions.

 

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

 

    15    

 

 

 

 


 

Financial Highlights–(continued)

Invesco PHLX Semiconductor ETF (SOXQ)

 

    

Six Months Ended

February 28,

2023

      (Unaudited)       

  

Year Ended August 31,

                 2022                

        For the Period
June 9,  2021(a)
Through
August 31,
         2021        

Per Share Operating Performance:

                                              

Net asset value at beginning of period

                         $ 21.11                              $ 26.99                               $ 24.88    
         

 

 

               

 

 

                    

 

 

     

Net investment income(b)

            0.14                 0.31                      0.06    

Net realized and unrealized gain (loss) on investments

            2.21                 (5.83 )                      2.05    
         

 

 

               

 

 

                    

 

 

     

Total from investment operations

            2.35                 (5.52 )                      2.11    
         

 

 

               

 

 

                    

 

 

     

Distributions to shareholders from:

                                              

Net investment income

            (0.14 )                 (0.36 )                      -    
         

 

 

               

 

 

                    

 

 

     

Net asset value at end of period

          $ 23.32               $ 21.11                    $ 26.99    
         

 

 

               

 

 

                    

 

 

     

Market price at end of period(c)

          $ 23.34               $ 21.15                    $ 27.06    
         

 

 

               

 

 

                    

 

 

     

Net Asset Value Total Return(d)

            11.21 %                 (20.70 )%                      8.48 %(e)    

Market Price Total Return(d)

            11.09 %                 (20.76 )%                      8.76 %(e)    

Ratios/Supplemental Data:

                                              

Net assets at end of period (000’s omitted)

          $ 98,897               $ 60,386                    $ 63,163    

Ratio to average net assets of:

                                              

Expenses, after Waivers

            0.19 %(f)                 0.13 %                      - %(f)    

Expenses, prior to Waivers

            0.19 %(f)                 0.19 %                      0.19 %(f)    

Net investment income

            1.33 %(f)                 1.22 %                      1.09 %(f)    

Portfolio turnover rate(g)

            11 %                 19 %                      4 %    

 

(a) 

Commencement of investment operations.

(b) 

Based on average shares outstanding.

(c) 

The mean between the last bid and ask prices.

(d) 

Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.

(e) 

The net asset value total return from Fund Inception (June 11, 2021, the first day of trading on the exchange) to August 31, 2021 was 6.72%. The market price total return from Fund Inception to August 31, 2021 was 7.08%.

(f) 

Annualized.

(g) 

Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions.

 

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

 

    16    

 

 

 

 


 

Financial Highlights–(continued)

Invesco Solar ETF (TAN)

 

     Six Months Ended                                 
     February 28,                                 
     2023      Years Ended August 31,  
    

      (Unaudited)       

     2022     2021     2020     2019     2018  

Per Share Operating Performance:

                  

Net asset value at beginning of period

                 $ 84.32        $ 86.14     $ 56.75     $ 30.63     $ 21.92     $ 21.62  
     

 

 

      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)(a)

        (0.10        (0.19     (0.05     0.17       0.05       0.54  

Net realized and unrealized gain (loss) on investments

        (9.80        (1.63     29.53       26.04       8.79       0.20  
     

 

 

      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

        (9.90        (1.82     29.48       26.21       8.84       0.74  
     

 

 

      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions to shareholders from:

                  

Net investment income

        -          -       (0.09     (0.09     (0.13     (0.44
     

 

 

      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value at end of period

      $ 74.42        $ 84.32     $ 86.14     $ 56.75     $ 30.63     $ 21.92  
     

 

 

      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Market price at end of period(b)

      $ 74.29        $ 84.34     $ 85.59     $ 56.84     $ 30.54     $ 21.82  
     

 

 

      

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Asset Value Total Return(c)

        (11.74 )%         (2.11 )%      51.93     85.82     40.73     3.19

Market Price Total Return(c)

        (11.92 )%         (1.46 )%      50.72     86.67     40.96     2.33

Ratios/Supplemental Data:

                  

Net assets at end of period (000’s omitted)

      $ 2,328,510        $ 2,975,483     $ 3,218,748     $ 1,335,274     $ 456,086     $ 319,383  

Ratio to average net assets of:

                  

Expenses, after Waivers

        0.67 %(d)          0.69     0.65     0.69     0.70     0.65

Expenses, prior to Waivers

        0.67 %(d)          0.69     0.65     0.69     0.71     0.69

Net investment income (loss)

        (0.25 )%(d)          (0.24 )%      (0.05 )%      0.49     0.22     2.23

Portfolio turnover rate(e)

        17        38     55     28     29     54

 

(a) 

Based on average shares outstanding.

(b) 

The mean between the last bid and ask prices.

(c) 

Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized.

(d) 

Annualized.

(e) 

Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions.

 

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

 

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Notes to Financial Statements

Invesco Exchange-Traded Fund Trust II

February 28, 2023

(Unaudited)

NOTE 1–Organization

Invesco Exchange-Traded Fund Trust II (the “Trust”) was organized as a Massachusetts business trust and is authorized to have multiple series of portfolios. The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). This report includes the following portfolios:

 

Full Name

  

Short Name

Invesco Nasdaq Biotechnology ETF (IBBQ)    “Nasdaq Biotechnology ETF”
Invesco PHLX Semiconductor ETF (SOXQ)    “PHLX Semiconductor ETF”
Invesco Solar ETF (TAN)    “Solar ETF”

Each portfolio (each, a “Fund”, and collectively, the “Funds”) represents a separate series of the Trust. The shares of the Funds are referred to herein as “Shares” or “Fund’s Shares.” Each Fund’s Shares are listed and traded on The Nasdaq Stock Market LLC, except for Shares of Solar ETF, which are listed and traded on NYSE Arca, Inc.

The market price of each Share may differ to some degree from a Fund’s net asset value (“NAV”). Unlike conventional mutual funds, each Fund issues and redeems Shares on a continuous basis, at NAV, only in a large specified number of Shares, each called a “Creation Unit.” Creation Units are issued and redeemed principally in exchange for the deposit or delivery of a basket of securities (“Deposit Securities”). Except when aggregated in Creation Units by authorized participants (“APs”), the Shares are not individually redeemable securities of the Funds.

The investment objective of each Fund is to seek to track the investment results (before fees and expenses) of its respective index listed below (each, an “Underlying Index”):

 

Fund

  

Underlying Index

Nasdaq Biotechnology ETF    Nasdaq Biotechnology Index®
PHLX Semiconductor ETF    PHLX Semiconductor Sector Index®
Solar ETF    MAC Global Solar Energy Index

NOTE 2–Significant Accounting Policies

The following is a summary of the significant accounting policies followed by the Funds in preparation of their financial statements.

Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services–Investment Companies.

A.

Security Valuation - Securities, including restricted securities, are valued according to the following policies:

A security listed or traded on an exchange is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded or, lacking any trades or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. U.S. exchange-traded options are valued at the mean between the last bid and asked prices from the exchange on which they are principally traded. Non-U.S. exchange-traded options are valued at the final settlement price set by the exchange on which they trade. Options not listed on an exchange and swaps generally are valued using pricing provided from independent pricing services.

Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day NAV per share.

Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.

Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a Fund may hold or transact in the same securities in smaller,

 

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odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.

Foreign securities’ (including foreign exchange contracts’) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the London world markets. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Capital Management LLC (the “Adviser”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the New York Stock Exchange (“NYSE”), closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith in accordance with Board-approved policies and related Adviser procedures (“Valuation Procedures”). Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American depositary receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, the potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.

Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.

Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value exchange-traded equity securities. The mean between the last bid and asked prices may be used to value debt obligations, including corporate loans, and unlisted equity securities.

Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. Issuer-specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.

Each Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund investments.

Valuations change in response to many factors, including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

The price a Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, a Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.

B.

Investment Transactions and Investment Income - Investment transactions are accounted for on a trade date basis. Realized gains and losses from the sale or disposition of securities are computed on the specific identified cost basis. Interest income is recorded on an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. Pay-in-kind interest income and non-cash dividend income received in the form of securities in-lieu of cash are recorded at the fair value of the securities received. Dividend income (net of

 

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withholding tax, if any) is recorded on the ex-dividend date. Realized gains, dividends and interest received by a Fund may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes.

The Funds may periodically participate in litigation related to a Fund’s investments. As such, the Funds may receive proceeds from litigation settlements. Any proceeds received are included in the Statements of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.

Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statements of Operations and the Statements of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of a Fund’s NAV and, accordingly, they reduce a Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statements of Operations and the Statements of Changes in Net Assets, or the net investment income per share and the ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between each Fund and the Adviser.

C.

Country Determination - For the purposes of presentation in the Schedules of Investments, the Adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include whether each Fund’s Underlying Index has made a country determination and may include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.

D.

Dividends and Distributions to Shareholders - Each Fund (except for Solar ETF) declares and pays dividends from net investment income, if any, to its shareholders quarterly and records such dividends on the ex-dividend date. Solar ETF declares and pays dividends from net investment income, if any, to its shareholders annually and records such dividends on the ex-dividend date. Generally, each Fund distributes net realized taxable capital gains, if any, annually in cash and records them on the ex-dividend date. Such distributions on a tax basis are determined in conformity with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America (“GAAP”). Distributions in excess of tax basis earnings and profits, if any, are reported in such Fund’s financial statements as a tax return of capital at fiscal year-end.

E.

Federal Income Taxes - Each Fund intends to comply with the provisions of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), applicable to regulated investment companies and to distribute substantially all of the Fund’s taxable earnings to its shareholders. As such, the Funds will not be subject to federal income taxes on otherwise taxable income (including net realized gains) that is distributed to the shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

Each Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed each Fund’s uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.

Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing book and tax treatments for in-kind transactions, losses deferred due to wash sales, and passive foreign investment company adjustments, if any.

The Funds file U.S. federal tax returns and tax returns in certain other jurisdictions. Generally, a Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.

F.

Expenses - Each Fund (except for Solar ETF) has agreed to pay an annual unitary management fee to the Adviser. Out of the unitary management fee, the Adviser has agreed to pay for substantially all expenses of the Funds, including the costs of transfer agency, custody, fund administration, legal, audit and other services, except for distribution fees, if any, brokerage expenses, taxes, interest, acquired fund fees and expenses, if any, litigation expenses and other extraordinary expenses, including proxy expenses (except for such proxies related to: (i) changes to the Investment Advisory Agreement, (ii) the election of any Board member who is an “interested person” of the Trust, or (iii) any other matters that directly benefit the Adviser).

Solar ETF is responsible for all of its expenses, including the investment advisory fees, costs of transfer agency, custody, fund administration, legal, audit and other services, interest, taxes, brokerage commissions and other expenses connected with executions of portfolio transactions, licensing fees related to its Underlying Index, any distribution fees or expenses, litigation expenses, fees payable to the Trust’s Board members and officers who are not “interested persons” (as defined in the 1940 Act) of the Trust (the “Independent Trustees”) or the Adviser, expenses incurred in connection with the Board members’ services, including travel expenses and legal fees of counsel for the Independent Trustees, acquired fund fees and

 

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expenses, if any, and extraordinary expenses, including proxy expenses (except for such proxies related to: (i) changes to the Investment Advisory Agreement, (ii) the election of any Board member who is an “interested person” of the Trust, or (iii) any other matters that directly benefit the Adviser).

Expenses of the Trust that are excluded from a Fund’s unitary management fee (if applicable) and are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that are excluded from each Fund’s unitary management fee (if applicable) and that are not readily identifiable to a specific Fund are allocated in such a manner as deemed equitable, taking into consideration the nature and type of expense and the relative net assets of each Fund.

To the extent a Fund invests in other investment companies, the expenses shown in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the investment companies in which it invests. The effects of such investment companies’ expenses are included in the realized and unrealized gain or loss on the investments in the investment companies.

G.

Accounting Estimates - The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements, including estimates and assumptions related to taxation. Actual results could differ from these estimates. In addition, the Funds monitor for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.

H.

Indemnifications - Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. Each Independent Trustee is also indemnified against certain liabilities arising out of the performance of their duties to the Trust pursuant to an Indemnification Agreement between such trustee and the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.

I.

Securities Lending - Each Fund may participate in securities lending and may loan portfolio securities having a market value up to one-third of each Fund’s total assets. Such loans are secured by cash collateral equal to no less than 102% (105% for international securities) of the market value of the loaned securities determined daily by the securities lending provider. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedules of Investments. Each Fund bears the risk of loss with respect to the investment of collateral. It is the policy of these Funds to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. When loaning securities, each Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. Lending securities entails a risk of loss to each Fund if, and to the extent that, the market value of the securities loaned were to increase, and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. The securities loaned are subject to termination at the option of the borrower or each Fund. Upon termination, the borrower will return to each Fund the securities loaned and each Fund will return the collateral. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. Each Fund could experience delays and costs in gaining access to the collateral and the securities may lose value during the delay which could result in potential losses to each Fund. Some of these losses may be indemnified by the lending agent. Each Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. For Funds that participated in securities lending, dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, are included in Securities lending income on the Statements of Operations. The aggregate value of securities out on loan, if any, is shown on the Statements of Assets and Liabilities.

Invesco Advisers, Inc. (“Invesco”), an affiliate of the Adviser, serves as an affiliated securities lending agent for each Fund participating in the securities lending program. The Bank of New York Mellon (“BNYM”) also serves as a lending agent. To the extent a Fund utilizes Invesco as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the six months ended February 28, 2023, each Fund had affiliated securities lending transactions with Invesco. Fees paid to Invesco for securities lending agent services, which are included in Securities lending income on the Statements of Operations, were incurred by each Fund as listed below:

 

     Amount  

Nasdaq Biotechnology ETF

     $370  

PHLX Semiconductor ETF

     2,994  

Solar ETF

     21,145  

 

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J.

Foreign Currency Translations - Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. Each Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statements of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on a Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period-end, resulting from changes in exchange rates.

Each Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which a Fund invests.

K.

Other Risks

ADR and GDR Risk. Certain Funds may invest in American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”). ADRs are certificates that evidence ownership of shares of a foreign issuer and are alternatives to purchasing the underlying foreign securities directly in their national markets and currencies. GDRs are certificates issued by an international bank that generally are traded and denominated in the currencies of countries other than the home country of the issuer of the underlying shares. ADRs and GDRs may be subject to certain of the risks associated with direct investments in the securities of foreign companies, such as currency, political, economic and market risks, because their values depend on the performance of the non-dollar denominated underlying foreign securities. Moreover, ADRs and GDRs may not track the price of the underlying foreign securities on which they are based, and their value may change materially at times when U.S. markets are not open for trading.

Authorized Participant Concentration Risk. Only APs may engage in creation or redemption transactions directly with each Fund. Each Fund has a limited number of institutions that may act as APs, and such APs have no obligation to submit creation or redemption orders. Consequently, there is no assurance that APs will establish or maintain an active trading market for the Shares. This risk may be heightened to the extent that securities held by each Fund are traded outside a collateralized settlement system. In that case, APs may be required to post collateral on certain trades on an agency basis (i.e., on behalf of other market participants), which only a limited number of APs may be able to do. In addition, to the extent that APs exit the business or are unable to proceed with creation and/or redemption orders with respect to each Fund and no other AP is able to step forward to create or redeem Creation Units, this may result in a significantly diminished trading market for Fund Shares, and Shares may be more likely to trade at a premium or discount to a Fund’s NAV and to face trading halts and/or delisting. Investments in non-U.S. securities, which may have lower trading volumes or could experience extended market closures or trading halts, may increase the risk that APs may not be able to effectively create or redeem Creation Units or the risk that the Shares may be halted and/or delisted.

Currency Risk. Because each Fund’s NAV is determined in U.S. dollars, a Fund’s NAV could decline if the currency of a non-U.S. market in which the Fund invests depreciates against the U.S. dollar. Generally, an increase in the value of the U.S. dollar against a foreign currency will reduce the value of a security denominated in that foreign currency, thereby decreasing a Fund’s overall NAV. Exchange rates may be volatile and may change quickly and unpredictably in response to both global economic developments and economic conditions, causing an adverse impact on a Fund. As a result, investors have the potential for losses regardless of the length of time they intend to hold Shares.

Emerging Markets Investment Risk. For certain Funds, investments in the securities of issuers in emerging market countries involve risks often not associated with investments in the securities of issuers in developed countries. Securities in emerging markets may be subject to greater price fluctuations than securities in more developed markets. Companies in emerging market countries generally may be subject to less stringent regulatory, disclosure, financial reporting, accounting, auditing and recordkeeping standards than companies in more developed countries. In addition, information about such companies may be less available and reliable. Emerging markets usually are subject to greater market volatility, political, social and economic instability, uncertainty regarding the existence of trading markets and more governmental limitations on foreign investment than are more developed markets. Securities law in many emerging market countries is relatively new and unsettled. Therefore, laws regarding foreign investment in emerging markets securities, securities regulation, title to securities, and shareholder rights may change quickly and unpredictably, and the ability to bring and enforce actions, or to obtain information needed to pursue or enforce such actions, may be limited. In addition, the enforcement of systems of taxation at federal, regional and local levels in emerging market countries may be inconsistent and subject to sudden change. Investments in emerging market securities may be subject to additional transaction costs, delays in settlement procedures,

 

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unexpected market closures, and lack of timely information. In addition, lack of relevant data and reliable public information, including financial information, about securities in emerging markets may contribute to incorrect weightings and data and computational errors when a Fund’s index provider selects securities for inclusion in the Fund’s Underlying Index or rebalances the Underlying Index.

Equity Risk. Equity risk is the risk that the value of equity securities, including common stocks, may fall due to both changes in general economic conditions that impact the market as a whole, as well as factors that directly relate to a specific company or its industry. Such general economic conditions include changes in interest rates, periods of market turbulence or instability, or general and prolonged periods of economic decline and cyclical change. It is possible that a drop in the stock market may depress the price of most or all of the common stocks that each Fund holds. In addition, equity risk includes the risk that investor sentiment toward one or more industries will become negative, resulting in those investors exiting their investments in those industries, which could cause a reduction in the value of companies in those industries more broadly. The value of a company’s common stock may fall solely because of factors, such as an increase in production costs that negatively impact other companies in the same region, industry or sector of the market. A company’s common stock also may decline significantly in price over a short period of time due to factors specific to that company, including decisions made by its management or lower demand for the company’s products or services. For example, an adverse event, such as an unfavorable earnings report or the failure to make anticipated dividend payments, may depress the value of common stock.

Foreign Investment Risk. Investments in the securities of non-U.S. issuers involve risks beyond those associated with investments in U.S. securities. Foreign securities may have relatively low market liquidity, greater market volatility, decreased publicly available information and less reliable financial information about issuers and inconsistent and potentially less stringent accounting, auditing and financial reporting requirements and standards of practice, including recordkeeping standards, comparable to those applicable to domestic issuers. Foreign securities are also subject to the risks of expropriation, nationalization, political instability or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. Investments in foreign securities also may be subject to dividend withholding or confiscatory taxes, currency blockage and/or transfer restrictions and higher transactional costs. If a Fund invests in securities denominated in foreign currencies, fluctuations in the value of the U.S. dollar relative to the values of other currencies may adversely affect investments in foreign securities and may negatively impact the Fund’s returns.

Index Risk. Unlike many investment companies, each Fund does not utilize an investing strategy that seeks returns in excess of its Underlying Index. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its Underlying Index, even if that security generally is underperforming. Additionally, each Fund rebalances its portfolio in accordance with its Underlying Index, and, therefore, any changes to the Underlying Index’s rebalance schedule will result in corresponding changes to each Fund’s rebalance schedule.

Industry Concentration Risk. In following its methodology, each Fund’s Underlying Index from time to time may be concentrated to a significant degree in securities of issuers operating in a single industry or industry group. To the extent that each Underlying Index concentrates in the securities of issuers in a particular industry or industry group, the corresponding Fund will also concentrate its investments to approximately the same extent. By concentrating its investments in an industry or industry group, each Fund may face more risks than if it were diversified broadly over numerous industries or industry groups. Such industry-based risks, any of which may adversely affect the companies in which each Fund invests, may include, but are not limited to, the following: general economic conditions or cyclical market patterns that could negatively affect supply and demand in a particular industry; competition for resources, adverse labor relations, political or world events; obsolescence of technologies; and increased competition or new product introductions that may affect the profitability or viability of companies in an industry. In addition, at times, such industry or industry group may be out of favor and underperform other industries or the market as a whole.

Market Risk. Securities in each Underlying Index are subject to market fluctuations. You should anticipate that the value of the Shares will decline, more or less, in correlation with any decline in value of the securities in an Underlying Index. Additionally, natural or environmental disasters, widespread disease or other public health issues, war, military conflict, acts of terrorism, economic crisis or other events could result in increased premiums or discounts to each Fund’s NAV.

Micro-Capitalization Company Risk. Investments in the securities of micro-capitalization companies involve substantially greater risks of loss and price fluctuations than other securities with larger capitalizations. Micro-capitalization companies carry additional risks because their earnings and revenues tend to be less predictable (and some companies may experience significant losses), their share prices tend to be more volatile and their markets less liquid than companies with larger market capitalizations. Micro-capitalization companies may be newly formed or in the early stages of development, with limited product lines, markets or financial resources, and they may lack management depth or may be overly reliant on specific key individuals. In addition, less public information may be available about these companies. The shares of micro-capitalization companies tend to trade less frequently than those of larger, more established companies, which can adversely affect the pricing of these securities and the future ability to sell these securities.

Non-Correlation Risk. Each Fund’s return may not match the return of its corresponding Underlying Index for a number of reasons. For example, each Fund incurs operating expenses not applicable to the Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the Fund’s securities holdings to reflect changes in the composition of its corresponding Underlying Index. In addition, the performance of each Fund and its corresponding Underlying Index may vary

 

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due to asset valuation differences and differences between each Fund’s portfolio and its corresponding Underlying Index resulting from legal restrictions, costs or liquidity constraints.

Non-Diversified Fund Risk. Because each Fund is non-diversified and can invest a greater portion of its assets in securities of individual issuers than can a diversified fund, changes in the market value of a single investment could cause greater fluctuations in Share price than would occur in a diversified fund. This may increase a Fund’s volatility and cause the performance of a relatively small number of issuers to have a greater impact on a Fund’s performance.

Small- and Mid-Capitalization Company Risk. Investing in securities of small- and mid-capitalization companies involves greater risk than customarily is associated with investing in larger, more established companies. These companies’ securities may be more volatile and less liquid than those of more established companies. These securities may have returns that vary, sometimes significantly, from the overall securities market. Often small- and mid-capitalization companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.

COVID-19 Risk. The COVID-19 strain of coronavirus has resulted in instances of market closures and dislocations, extreme volatility, liquidity constraints and increased trading costs. Efforts to contain its spread have resulted in travel restrictions, disruptions of healthcare systems, business operations (including business closures) and supply chains, layoffs, lower consumer demand and employee availability, and defaults and credit downgrades, among other significant economic impacts that have disrupted global economic activity across many industries. Such economic impacts may exacerbate other pre-existing political, social and economic risks locally or globally and cause general concern and uncertainty. The full economic impact and ongoing effects of COVID-19 (or other future epidemics or pandemics) at the macro-level and on individual businesses are unpredictable and may result in significant and prolonged effects on the Funds’ performance.

NOTE 3–Investment Advisory Agreements and Other Agreements

The Trust has entered into Investment Advisory Agreements with the Adviser on behalf of each Fund, pursuant to which the Adviser has overall responsibility for the selection and ongoing monitoring of each Fund’s investments, managing each Fund’s business affairs and providing certain clerical, bookkeeping and other administrative services.

Pursuant to an Investment Advisory Agreement, Solar ETF accrues daily and pays monthly to the Adviser an annual fee equal to 0.50% of the Fund’s average daily net assets. The Trust also has entered into an Amended and Restated Excess Expense Agreement (the “Expense Agreement”), pursuant to which the Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of Solar ETF (excluding interest expenses, brokerage commissions and other trading expenses, sub-licensing fees, offering costs, taxes, acquired fund fees and expenses, if applicable, and extraordinary expenses) from exceeding 0.65% of the Fund’s average daily net assets per year through August 31, 2025 (the “Expense Cap”). There is no guarantee that the Adviser will extend the waiver of these fees past that date.

Pursuant to another Investment Advisory Agreement, each Fund listed below accrues daily and pays monthly to the Adviser an annual unitary management fee. Out of the unitary management fee, the Adviser has agreed to pay for substantially all expenses of the Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except for distribution fees, if any, brokerage expenses, taxes, interest, acquired fund fees and expenses, if any, litigation expenses and other extraordinary expenses, including proxy expenses (except for such proxies related to: (i) changes to the Investment Advisory Agreement, (ii) the election of any Board member who is an “interested person” of the Trust, or (iii) any other matters that directly benefit the Adviser). The unitary management fee is paid by each Fund to the Adviser at the following annual rates:

 

     Unitary Management Fees
(as a % of average daily net  assets)
Nasdaq Biotechnology ETF    0.19%
PHLX Semiconductor ETF    0.19%

Further, through at least August 31, 2025, the Adviser has contractually agreed to waive the management fee payable by each Fund in an amount equal to the lesser of: (i) 100% of the net advisory fees earned by the Adviser or an affiliate of the Adviser that are attributable to the Fund’s investments in money market funds that are managed by affiliates of the Adviser and other funds (including ETFs) managed by the Adviser or affiliates of the Adviser or (ii) the management fee available to be waived. This waiver does not apply to a Fund’s investment of cash collateral received for securities lending. There is no guarantee that the Adviser will extend the waiver of these fees past that date. This agreement is not subject to recapture by the Adviser.

For the six months ended February 28, 2023, the Adviser waived fees for each Fund in the following amounts:

 

Nasdaq Biotechnology ETF    $ 1  
PHLX Semiconductor ETF      12  
Solar ETF      1,508  

The fees waived and/or expenses borne by the Adviser, pursuant to the Expense Cap, for Solar ETF are subject to recapture by the Adviser up to three years from the date the fees were waived or the expenses were incurred, but no recapture payment will be made by the Fund if it would result in the Fund exceeding (i) the Expense Cap or (ii) the expense cap in effect at the time the

 

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fees and/or expenses subject to recapture were waived and/or borne by the Adviser. There are no amounts available for potential recapture by the Adviser as of February 28, 2023.

The Trust has entered into a Distribution Agreement with Invesco Distributors, Inc. (the “Distributor”), which serves as the distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in the Shares. The Funds are not charged any fees pursuant to the Distribution Agreement. The Distributor is an affiliate of the Adviser.

The Adviser has entered into a licensing agreement for each Fund with the following entities (each, a “Licensor”):

 

Fund

   Licensor
Nasdaq Biotechnology ETF    Nasdaq, Inc.
PHLX Semiconductor ETF    Nasdaq, Inc.
Solar ETF    MAC Indexing LLC

Each Underlying Index name trademark is owned by its respective Licensor. These trademarks have been licensed to the Adviser for use by the Funds. Each Fund is entitled to use its Underlying Index pursuant to the Trust’s sub-licensing agreement with the Adviser. The Funds are not sponsored, endorsed, sold or promoted by the Licensors, and the Licensors make no representation regarding the advisability of investing in any of the Funds.

The Trust has entered into service agreements whereby BNYM, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian, fund accountant and transfer agent for each Fund.

For the six months ended February 28, 2023, the following Funds incurred brokerage commissions with Invesco Capital Markets, Inc. (“ICMI”), an affiliate of the Adviser and Distributor, for portfolio transactions executed on behalf of the Funds, as listed below:

 

Nasdaq Biotechnology ETF    $ 1,467  
PHLX Semiconductor ETF      341  
Solar ETF      17,603  

Portfolio transactions with ICMI that have not settled at period-end, if any, are shown in the Statements of Assets and Liabilities under the receivable caption Investments sold - affiliated broker and/or payable caption Investments purchased - affiliated broker.

NOTE 4–Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 –    Prices are determined using quoted prices in an active market for identical assets.
Level 2 –    Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 –    Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Adviser’s assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

The following is a summary of the tiered valuation input levels, as of February 28, 2023. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

 

     Level 1      Level 2      Level 3      Total  

Nasdaq Biotechnology ETF

                 

Investments in Securities

                        

Common Stocks & Other Equity Interests

   $  19,400,947      $ -         $ 0         $  19,400,947  

Money Market Funds

     -        3,408,307           -           3,408,307  
  

 

 

    

 

 

       

 

 

       

 

 

 

Total Investments

   $     19,400,947      $     3,408,307         $ 0         $     22,809,254  
  

 

 

    

 

 

       

 

 

       

 

 

 

 

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     Level 1      Level 2     

Level 3

     Total  

PHLX Semiconductor ETF

                 

Investments in Securities

                               

Common Stocks & Other Equity Interests

   $ 98,830,801      $ -         $ -         $ 98,830,801  

Money Market Funds

     -        3,173,296           -           3,173,296  
  

 

 

    

 

 

       

 

 

       

 

 

 

Total Investments

   $ 98,830,801      $ 3,173,296         $ -         $ 102,004,097  
  

 

 

    

 

 

       

 

 

       

 

 

 

Solar ETF

                 

Investments in Securities

                 

Common Stocks & Other Equity Interests

   $ 2,264,981,399      $  59,791,421         $ -         $ 2,324,772,820  

Money Market Funds

     761,253        378,274,112           -           379,035,365  
  

 

 

    

 

 

       

 

 

       

 

 

 

Total Investments

   $ 2,265,742,652      $ 438,065,533         $ -         $ 2,703,808,185  
  

 

 

    

 

 

       

 

 

       

 

 

 

NOTE 5–Tax Information

The amount and character of income and gains to be distributed are determined in accordance with federal income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds’ capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under federal income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds’ fiscal year-end.

    Capital loss carryforwards are calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforwards actually available for the Funds to utilize. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

    The Funds had capital loss carryforwards as of August 31, 2022, as follows:

 

     No expiration         
     Short-Term      Long-Term      Total*  

Nasdaq Biotechnology ETF

   $ 688,811      $ 75,288      $ 764,099  

PHLX Semiconductor ETF

     1,842,663        66,941        1,909,604  

Solar ETF

     196,052,127        276,529,141        472,581,268  

 

*

Capital loss carryforwards are reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization.

NOTE 6–Investment Transactions

For the six months ended February 28, 2023, the cost of securities purchased and the proceeds from sales of securities (other than short-term securities, U.S. Government obligations, money market funds and in-kind transactions, if any) were as follows:

 

     Purchases      Sales  

Nasdaq Biotechnology ETF

   $ 1,429,445      $ 1,463,308  

PHLX Semiconductor ETF

     8,126,901        8,094,185  

Solar ETF

     427,473,139        456,618,262  

    For the six months ended February 28, 2023, in-kind transactions associated with creations and redemptions were as follows:

 

     In-kind
Purchases
     In-kind
Sales
 

Nasdaq Biotechnology ETF

   $ -      $ 1,996,713  

PHLX Semiconductor ETF

     33,773,405        6,405,517  

Solar ETF

     321,804,922        557,490,831  

    Gains (losses) on in-kind transactions are generally not considered taxable gains (losses) for federal income tax purposes.

 

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    As of February 28, 2023, the aggregate cost of investments, including any derivatives, on a tax basis includes adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end:

 

     Gross
Unrealized
Appreciation
     Gross
Unrealized
(Depreciation)
    Net
Unrealized
Appreciation
(Depreciation)
    Cost  

Nasdaq Biotechnology ETF

   $ 1,427,735      $ (6,691,542   $ (5,263,807   $ 28,073,061  

PHLX Semiconductor ETF

     5,894,943        (7,223,638     (1,328,695     103,332,792  

Solar ETF

     193,979,495        (743,827,399     (549,847,904     3,253,656,089  

NOTE 7–Trustees’ and Officer’s Fees

Trustees’ and Officer’s Fees include amounts accrued by the Funds to pay remuneration to the Independent Trustees and an Officer of the Trust. The Adviser, as a result of the unitary management fee, pays for such compensation for Nasdaq Biotechnology ETF and PHLX Semiconductor ETF. The Trustee who is an “interested person” of the Trust does not receive any Trustees’ fees.

    The Trust has adopted a deferred compensation plan (the “Plan”). Under the Plan, each Independent Trustee who has executed a Deferred Fee Agreement (a “Participating Trustee”) may defer receipt of all or a portion of their compensation (“Deferral Fees”). Such Deferral Fees are deemed to be invested in select Invesco ETFs. The Deferral Fees payable to a Participating Trustee are valued as of the date such Deferral Fees would have been paid to a Participating Trustee. The value increases with contributions or with increases in the value of the Shares selected, and the value decreases with distributions or with declines in the value of the Shares selected. Obligations under the Plan represent unsecured claims against the general assets of the Funds.

NOTE 8–Capital

Shares are issued and redeemed by each Fund only in Creation Units consisting of a specified number of Shares as set forth in each Fund’s prospectus. Only APs are permitted to purchase or redeem Creation Units from the Funds. Such transactions are principally permitted in exchange for Deposit Securities, with a balancing cash component to equate the transaction to the NAV per Share of a Fund on the transaction date. However, for all Funds, cash in an amount equivalent to the value of certain securities may be substituted, generally when the securities are not available in sufficient quantity for delivery, not eligible for trading by the AP or as a result of other market circumstances.

    To the extent that the Funds permit transactions in exchange for Deposit Securities, each Fund may issue Shares in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to 105% of the market value of the missing Deposit Securities. In accordance with the Trust’s Participant Agreement, Creation Units will be issued to an AP, notwithstanding the fact that the corresponding Deposit Securities have not been received in part or in whole, in reliance on the undertaking of the AP to deliver the missing Deposit Securities as soon as possible, which undertaking shall be secured by the AP’s delivery and maintenance of collateral consisting of cash in the form of U.S. dollars in immediately available funds having a value (marked-to-market daily) at least equal to 105%, which the Adviser may change from time to time, of the value of the missing Deposit Securities.

Certain transaction fees may be charged by the Funds for creations and redemptions, which are treated as increases in capital. Transactions in each Fund’s Shares are disclosed in detail in the Statements of Changes in Net Assets.

 

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Calculating your ongoing Fund expenses

Example

As a shareholder of the Invesco Solar ETF, you incur advisory fees and other Fund expenses. As a shareholder of Invesco Nasdaq Biotechnology ETF and Invesco PHLX Semiconductor ETF, you incur a unitary management fee. In addition to the advisory fee or unitary management fee, a shareholder may pay distribution fees, if any, brokerage expenses, taxes, interest, acquired fund fees and expenses, if any, litigation expenses and other extraordinary expenses, including proxy expenses (except for such proxies related to: (i) changes to the Investment Advisory Agreement, (ii) the election of any Board member who is an “interested person” of the Trust, or (iii) any other matters that directly benefit the Adviser). The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period September 1, 2022 through February 28, 2023.

Actual Expenses

The first line in the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line in the following table provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transaction costs, such as sales charges and brokerage commissions. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

 

    

Beginning

Account Value
September 1, 2022

    

Ending

Account Value
February 28, 2023

     Annualized
Expense Ratio
Based on the
Six-Month Period
    

Expenses Paid

During the

Six-Month Period(1)

 

Invesco Nasdaq Biotechnology ETF (IBBQ)

                                  

Actual

                   $ 1,000.00                                      $ 1,058.90                           0.19                          $ 0.97                      

Hypothetical (5% return before expenses)

        1,000.00              1,023.85              0.19             0.95     

Invesco PHLX Semiconductor ETF (SOXQ)

                                  

Actual

        1,000.00              1,112.10              0.19             1.00     

Hypothetical (5% return before expenses)

        1,000.00              1,023.85              0.19             0.95     

Invesco Solar ETF (TAN)

                                  

Actual

        1,000.00              882.60              0.67             3.13     

Hypothetical (5% return before expenses)

        1,000.00              1,021.47              0.67             3.36     

 

(1)

Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six-month period ended February 28, 2023. Expenses are calculated by multiplying the Fund’s annualized expense ratio by the average account value for the period, then multiplying the result by 181/365.

 

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Proxy Voting Policies and Procedures

A description of the Trust’s proxy voting policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available, without charge and upon request, by calling (800) 983-0903. This information is also available on the Securities and Exchange Commission’s (the “Commission”) website at www.sec.gov.

Information regarding how each Fund voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, is available, without charge and upon request, by (i) calling (800) 983-0903; or (ii) accessing the Trust’s Form N-PX on the Commission’s website at www.sec.gov.

Quarterly Portfolios

The Trust files its complete schedule of portfolio holdings for the Funds with the Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Forms N-PORT are available on the Commission’s website at www.sec.gov.

Frequency Distribution of Discounts and Premiums

A table showing the number of days the market price of each Fund’s shares was greater than the Fund’s net asset value, and the number of days it was less than the Fund’s net asset value (i.e., premium or discount) for the most recently completed calendar year, and the calendar quarters since that year end (or the life of the Fund, if shorter) may be found at the Fund’s website at www.invesco.com/ETFs.


 

 

 

 

 

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