Domestic Equity

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

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

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

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

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

 

1	Source: US Bureau of Labor Statistics

2	Source: Bloomberg LP

3	Source: US Federal Reserve

4	Source: Lipper Inc.

Global Equity

At the beginning of the fiscal year ended August 31, 2022, developed global equity markets were mostly positive, despite rising inflation and the emergence of Omicron, a new COVID-19 variant. Pandemic-related supply chain disruptions and labor shortages intensified at the end of 2021, resulting in broadly higher costs for companies and consumers. Emerging market equities declined due in part to COVID-19 concerns and China’s ongoing regulatory tightening in the private education and technology sectors and slowing economic growth.

Global equity markets declined in the first quarter 2022 amid volatility sparked by Russia’s invasion of Ukraine, rising commodity prices, rampant global inflation and central banks shifting toward tighter monetary policy. Russia’s invasion exacerbated inflationary pressures, disrupting already strained supply chains and increasing shortages of oil, gas and raw materials, with the price of oil rising sharply.

In the second quarter of 2022, global equity markets continued their decline as record inflation, rising interest rates and recession fears led to generally weaker consumer sentiment around the globe. In Europe, reduction of gas supplies from Russia due to the war in Ukraine drove prices higher and led to mounting fears of gas shortages and rationing. Emerging market equities also declined, but China was an outlier and posted a positive return for the quarter due to the easing of COVID-19 lockdowns.

After a rebound in July 2022, global equity markets declined again at the end of the fiscal year, as global economic uncertainty continued with central banks trying to bring inflation under control. At the end of the fiscal year, trailing one-year returns for developed market equities and emerging market equities were both in negative territory.

As an index fund, the Invesco Defensive Equity ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Invesco Defensive Equity Index (the “Index”). The Fund generally will invest at least 80% of its total assets in the securities that comprise the Index. Strictly in accordance with its guidelines and mandated procedures, Invesco Indexing LLC (“Invesco Indexing” or the “Index Provider”) compiles and maintains the Index, which is comprised of a subset of securities from the S&P 500^® Index (the “S&P 500”). Invesco Indexing is affiliated with Invesco Capital Management LLC, the Fund’s investment adviser, and Invesco Distributors, Inc., the Fund’s distributor.

Instead of the traditional approach to defensive equity portfolios that focuses solely on low beta stocks, the Index, using a rules-based quantitative approach, is designed to measure the performance of approximately 100 equal-weighted securities selected from the S&P 500 based on each security’s (i) probability of delivering the required revenue growth to support the current stock price, (ii) beta (a measure of a given security’s volatility in relation to the volatility of a specific market) and (iii) down market volatility (a measurement that represents a security’s volatility during adverse market conditions). For each security in the S&P 500, the probability of delivering the required revenue growth to support the current stock price is calculated. The securities in the top 80% based on their probability scores are eligible for inclusion in the Index. Of those securities, the 75% with the lowest beta are further evaluated and those that rank in the bottom 50% on down market volatility are eligible for inclusion in the Index. Of those securities, the 100 securities with a higher probability of delivering the required revenue growth to support their current stock prices while minimizing any differences in industry exposure relative to the S&P 500 are included in the Index. The Fund generally will invest in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (4.40)%. On a net asset value (“NAV”) basis, the Fund returned (4.54)%. During the same time period, the Index returned (4.01)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses incurred by the Fund during the period.

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

The performance of the Fund differed from the Benchmark Index because the Fund seeks to track an Index that employs a proprietary stock selection and equal weighting methodology, whereas the Benchmark Index selects and weights stocks based on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the health care, industrials and consumer staples sectors and most underweight in the information technology, communication services and energy sectors during the fiscal year ended August 31, 2022.

The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s underweight allocation to and security selection in the communication services sector, the Fund’s security selection in the consumer discretionary sector, and the Fund’s overweight allocation to the consumer staples sector.

For the fiscal year ended August 31, 2022, the utilities sector contributed most significantly to the Fund’s return, followed by the energy and consumer staples sectors, respectively. The health care sector detracted most significantly from the Fund’s return, followed by the industrials and information technology sectors, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included McKesson Corp., a health care company (portfolio average weight of 1.11%), and Cardinal Health, Inc., a health care company (portfolio average weight of 0.81%). Positions that detracted most significantly from the Fund’s return during the period included Agilent Technologies, Inc., a health care company (no longer held at fiscal year-end), and PPG Industries, Inc., a materials company (no longer held at fiscal year-end).

 

Sector Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Health Care			21.78
Industrials			15.89
Information Technology			12.06
Financials			11.31
Consumer Staples			11.24
Consumer Discretionary			6.25
Utilities			6.00
Real Estate			5.88
Materials			5.74
Sector Types Each Less Than 3%			3.74
Money Market Funds Plus Other Assets Less Liabilities			0.11

Guggenheim Defensive Equity ETF (the “Predecessor Fund”) Inception: December 15, 2006

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2024. According to the Fund’s current prospectus, the total annual operating expense ratio was indicated as 0.55%. The Financial Highlights section of the Shareholder Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

-	Effective after the close of business on April 6, 2018, the Predecessor Fund was reorganized into the Fund. Fund returns shown are blended returns of the Predecessor Fund and the Fund.

 

-	Average Annualized and Cumulative Inception returns for the Fund, Blended-Index and Benchmark Index are based on the inception date of the Predecessor Fund.

 

-

The Blended-Invesco Defensive Equity Index performance is comprised of the performance of the Sabrient Defensive Equity Index, the Fund’s previous underlying index, prior to the conversion date, October 24, 2016, followed by the performance of the Index, starting from the conversion date through August 31, 2022.

As an index fund, the Invesco RAFI^TM Strategic Developed ex-US ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Invesco Strategic Developed ex-US Index (the “Index”). The Fund generally will invest at least 80% of its total assets in securities that comprise the Index and American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”) that are based on securities in the Index. Strictly in accordance with its guidelines and mandated procedures, Invesco Indexing LLC (“Invesco Indexing” or the “Index Provider”) compiles and maintains the Index, which is designed to measure the performance of equity securities in countries designated as developed market countries (excluding the U.S.) that tend to have smaller, yet higher quality businesses. Invesco Indexing is affiliated with Invesco Capital Management LLC, the Fund’s investment adviser, and Invesco Distributors, Inc., the Fund’s distributor.

The Index Provider selects components for inclusion in the Index from an investment universe of foreign equity securities with at least one year of trading history, issued by companies located in countries designated as developed market countries (excluding the U.S.). Each eligible equity security is assigned a business-size score (“Business-Size Score”) based on the equally-weighted average of the following four factors of company size over the prior five years (or, if shorter, the life of the security): sales, operating cash flow, total return of capital (dividends and share repurchases) and book value. For real estate securities (real estate investment trusts (“REITs”) and common stocks of companies in the real estate sector), operating cash flow is replaced by funds from operations and book value is replaced by total assets. Each eligible security is then assigned a quality score (“Quality Score”) based on the equally-weighted average of the following two quality factors of its company’s business: efficiency (calculated as the ratio of sales-to-assets in the prior year) and growth (calculated as the percentage change in the ratio of sales-to-assets over the prior five years (or, if shorter, the life of the security)). Each eligible security is ranked in descending order by its Business-Size Score. Those securities in the top 90% by Business-Size Score are eligible for inclusion in the Index and, of those, the 80% with the highest Quality Scores are included in the Index. Securities in the Index are weighted proportionally to their float-adjusted Business-Size Scores. The Fund generally will invest in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (11.22)%. On a net asset value (“NAV”) basis, the Fund returned (10.84)%. During the same time period, the Index returned (10.93)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to revenue from the securities lending program in which the Fund participates, which were partially offset by the fees and expenses that the Fund incurred during the period.

During this same time period, the MSCI EAFE^® Index (the “Benchmark Index”) returned (19.80)%. The Benchmark Index is

an unmanaged index weighted by market capitalization and based on the average performance of approximately 900 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of equities markets in developed countries around the world, excluding the U.S.

The performance of the Fund differed from the Benchmark Index because the Fund seeks to track an Index that employs a proprietary stock selection and weighting methodology, whereas the Benchmark Index selects and weights stocks based on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the energy and materials sectors and most underweight in the financials and health care sectors during the fiscal year ended August 31, 2022.

The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s overweight allocation to the energy sector, as well as its security selection within the industrials sector.

For the fiscal year ended August 31, 2022, the energy sector was the only sector that contributed significantly to the Fund’s return. The consumer discretionary sector detracted most significantly from the Fund’s return, followed by the industrials and materials sectors, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Shell PLC, an energy company (portfolio average weight of 3.11%), and Suncor Energy, Inc., an energy company (portfolio average weight of 0.91%). Positions that detracted most significantly from the Fund’s return during the period included Samsung Electronics Co., Ltd., an information technology company (portfolio average weight of 1.72%), and Saipem S.p.A., an energy company (portfolio average weight of 0.32%).

 

Sector Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Industrials			16.77
Consumer Discretionary			14.50
Materials			12.89
Energy			12.81
Consumer Staples			10.85
Information Technology			7.36
Health Care			7.05
Communication Services			6.25
Financials			5.44
Utilities			5.09
Real Estate			0.76
Money Market Funds Plus Other Assets Less Liabilities			0.23

Fund Inception: September 12, 2018

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.23% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

 

-	Net returns reflect reinvested dividends net of withholding taxes.

As an index fund, the Invesco RAFI^TM Strategic Emerging Markets ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Invesco Strategic Emerging Markets Index (the “Index”). The Fund generally will invest at least 80% of its total assets in securities that comprise the Index and American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”) that are based on securities in the Index. Strictly in accordance with its guidelines and mandated procedures, Invesco Indexing LLC (“Invesco Indexing” or the “Index Provider”) compiles and maintains the Index, which is designed to measure the performance of equity securities of emerging market companies that tend to have larger, higher quality businesses. Invesco Indexing is affiliated with Invesco Capital Management LLC, the Fund’s investment adviser, and Invesco Distributors, Inc., the Fund’s distributor.

The Index Provider selects components for inclusion in the Index from an investment universe of foreign equity securities with at least one year of trading history, issued by companies located in countries designated as emerging market countries. Each eligible equity security is assigned a business-size score (“Business-Size Score”) based on the equally-weighted average of the following four factors of company size over the prior five years (or, if shorter, the life of the security): sales, operating cash flow, total return of capital (dividends and share repurchases) and book value. For real estate securities (real estate investment trusts (“REITs”) and common stocks of companies in the real estate sector), operating cash flow is replaced by funds from operations and book value is replaced by total assets. Each eligible security is then assigned a quality score (“Quality Score”) based on the equally-weighted average of the following two quality factors of its company’s business: efficiency (calculated as the ratio of sales-to-assets in the prior year) and growth (calculated as the percentage change in the ratio of sales-to-assets over the prior five years (or, if shorter, the life of the security)). Each eligible security is ranked in descending order by its Business-Size Score. Those securities in the top 90% by Business-Size Score are eligible for inclusion in the Index and, of those, the 80% with the highest Quality Scores are included in the Index. Securities in the Index are weighted proportionally to their float-adjusted Business-Size Scores. The Fund generally will invest in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (17.32)%. On a net asset value (“NAV”) basis, the Fund returned (17.14)%. During the same time period, the Index returned (16.72)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to the fees and expenses that the Fund incurred during the period.

During this same time period, the MSCI Emerging Markets Index (the “Benchmark Index”) returned (21.80)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 1,400

securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of emerging market equities.

The performance of the Fund differed from the Benchmark Index because the Fund seeks to track an Index that employs a proprietary stock selection and weighting methodology, whereas the Benchmark Index selects and weights stocks based on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the energy and industrials sectors and most underweight in the information technology and consumer discretionary sectors during the fiscal year ended August 31, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during that period can be attributed to the Fund’s overweight allocation to and security selection in the energy and information technology sectors.

For the fiscal year ended August 31, 2022, no sector contributed significantly to the Fund’s return. The materials sector detracted most significantly from the Fund’s return, followed by the information technology and financials sectors, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Petroleo Brasileiro S.A., Preference Shares., an energy company (portfolio average weight of 2.52%), and China Shenhua Energy Co. Ltd., H Shares, an energy company (portfolio average weight of 2.09%). Positions that detracted most significantly from the Fund’s return during the period included Gazprom PJSC, an energy company (portfolio average weight of 1.47%) and Lukoil PJSC, an energy company (portfolio average weight of 0.82%).

As an emerging markets fund, the Fund had exposure to Russian securities with a weight of about 4.51% upon Russia’s invasion of Ukraine (as of February 24, 2022). United States federal sanctions implemented as a response to the invasion have prohibited the buying and selling of all Russian securities. Russian securities held in the Fund’s portfolio are currently valued at zero.

 

Sector Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Energy			19.51
Financials			15.81
Information Technology			13.67
Consumer Discretionary			13.35
Materials			9.73
Industrials			7.88
Communication Services			5.63
Consumer Staples			5.10
Utilities			3.71
Real Estate			3.71
Health Care			1.18
Money Market Funds Plus Other Assets Less Liabilities			0.72

Fund Inception: September 12, 2018

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.35% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

 

-	Net returns reflect reinvested dividends net of withholding taxes.

As an index fund, the Invesco RAFI^TM Strategic US ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Invesco Strategic US Index (the “Index”). The Fund generally will invest at least 80% of its total assets in securities that comprise the Index. Strictly in accordance with its guidelines and mandated procedures, Invesco Indexing LLC (“Invesco Indexing” or the “Index Provider”) compiles and maintains the Index, which is designed to measure the performance of equity securities of U.S. companies that tend to have larger, higher quality businesses. Invesco Indexing is affiliated with Invesco Capital Management LLC, the Fund’s investment adviser, and Invesco Distributors, Inc., the Fund’s distributor.

The Index Provider selects components for inclusion in the Index from an investment universe of domestic equity securities with at least one year of trading history. Each eligible equity security is assigned a business-size score (“Business-Size Score”) based on the equally-weighted average of the following four factors of company size over the prior five years (or, if shorter, the life of the security): sales, operating cash flow, total return of capital (dividends and share repurchases) and book value. For real estate securities (real estate investment trusts (“REITs”) and common stocks of companies in the real estate sector), operating cash flow is replaced by funds from operations and book value is replaced by total assets. Each eligible security is then assigned a quality score (“Quality Score”) based on the equally-weighted average of the following two quality factors of its company’s business: efficiency (calculated as the ratio of sales-to-assets in the prior year) and growth (calculated as the percentage change in the ratio of sales-to-assets over the prior five years (or, if shorter, the life of the security)). Each eligible security is ranked in descending order by its Business-Size Score. Those securities within the top 90% in cumulative Business-Size Score are eligible for inclusion in the Index and, of those, the 80% with the highest Quality Scores are included in the Index. Securities in the Index are weighted proportionally to their float-adjusted Business-Size Scores. The Fund generally will invest in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (2.78)%. On a net asset value (“NAV”) basis, the Fund returned (2.84)%. During the same time period, the Index returned (2.68)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to the fees and expenses that the Fund incurred during the period.

During this same time period, the Russell 1000^® Index (the “Benchmark Index”) returned (12.96)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 1,000 securities. The Benchmark Index was selected for its recognition in the

marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. stock market.

The performance of the Fund differed from the Benchmark Index because the Fund seeks to track an Index that employs a proprietary stock selection and weighting methodology, whereas the Benchmark Index selects and weights stocks based on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the energy and consumer staples sectors and most underweight in the information technology and financials sectors during the fiscal year ended August 31, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s overweight allocation to the energy sector as well as the security selection in the health care, information technology, and financials sectors.

For the fiscal year ended August 31, 2022, the energy sector contributed most significantly to the Fund’s return, followed by the health care and utilities sectors, respectively. The communication services sector detracted most significantly from the Fund’s return, followed by the information technology and consumer discretionary sectors, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Exxon Mobil Corp., an energy company (portfolio average weight of 2.11%), and Chevron Corp., an energy company (portfolio average weight of 1.55%). Positions that detracted most significantly from the Fund’s return during the period included Meta Platforms, Inc., Class A, a communication services company (portfolio average weight of 1.25%), and Alphabet, Inc., Class A, a communication services company (portfolio average weight of 3.42%).

 

Sector Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Information Technology			20.81
Health Care			15.28
Consumer Discretionary			12.15
Communication Services			11.69
Industrials			9.65
Consumer Staples			9.01
Financials			7.88
Energy			7.26
Materials			3.94
Sector Types Each Less Than 3%			2.10
Money Market Funds Plus Other Assets Less Liabilities			0.23

Fund Inception: September 12, 2018

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.19% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

As an index fund, the Invesco RAFI^TM Strategic US Small Company ETF (“the Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Invesco Strategic US Small Company Index (the “Index”). The Fund generally will invest at least 80% of its total assets in securities that comprise the Index. Strictly in accordance with its guidelines and mandated procedures, Invesco Indexing LLC (“Invesco Indexing” or the “Index Provider”) compiles and maintains the Index, which is designed to measure the performance of equity securities of U.S. companies that tend to have smaller, yet higher quality businesses. Invesco Indexing is affiliated with Invesco Capital Management LLC, the Fund’s investment adviser, and Invesco Distributors, Inc., the Fund’s distributor.

The Index Provider selects components for inclusion in the Index from an investment universe of domestic equity securities with at least one year of trading history. Each eligible equity security is assigned a business-size score (“Business-Size Score”) based on the equally-weighted average of the following four factors of company size over the prior five years (or, if shorter, the life of the security): sales, operating cash flow, total return of capital (dividends and share repurchases) and book value. For real estate securities (real estate investment trusts (“REITs”) and common stocks of companies in the real estate sector), operating cash flow is replaced by funds from operations and book value is replaced by total assets. Each eligible security is then assigned a quality score (“Quality Score”) based on the equally-weighted average of the following two quality factors of its company’s business: efficiency (calculated as the ratio of sales-to-assets in the prior year) and growth (calculated as the percentage change in the ratio of sales-to-assets over the prior five years (or, if shorter, the life of the security)). Each eligible security is ranked in descending order by its Business-Size Score. Those securities ranked greater than 90% in cumulative Business-Size Score are eligible for inclusion in the Index and, of those, the 80% with the highest Quality Scores are included in the Index. Securities in the Index are weighted proportionally to their float-adjusted Business-Size Scores. The Fund generally will invest in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (12.58)%. On a net asset value (“NAV”) basis, the Fund returned (12.70)%. During the same time period, the Index returned (12.53)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to the fees and expenses that the Fund incurred during the period.

During this same time period, the Russell 2000^® Index (the “Benchmark Index”) returned (17.88)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 2,000 securities.

The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. small cap stock market.

The performance of the Fund differed from the Benchmark Index because the Fund seeks to track an Index that employs a proprietary stock selection and weighting methodology, whereas the Benchmark Index selects and weights stocks based on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the industrials and consumer discretionary sectors and most underweight in the financials and health care sectors during the fiscal year ended August 31, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s underweight allocation to and security selection in the health care sector as well as its overweight allocation to and security selection in the energy sector.

For the fiscal year ended August 31, 2022, the energy sector contributed most significantly to the Fund’s return, followed by the utilities sector. The consumer discretionary sector detracted most significantly from the Fund’s return, followed by the information technology and industrials sectors, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included SM Energy Co., an energy company (portfolio average weight of 0.22%), and CVR Energy, Inc., an energy company (portfolio average weight of 0.36%). Positions that detracted most significantly from the Fund’s return during the period included Moderna, Inc., a health care company (no longer held at fiscal year-end), and MercadoLibre, Inc., a consumer discretionary company (no longer held at fiscal year-end).

 

Sector Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Industrials			22.37
Consumer Discretionary			17.07
Information Technology			15.13
Health Care			10.47
Materials			6.30
Financials			6.06
Energy			5.18
Consumer Staples			4.74
Real Estate			4.45
Communication Services			4.42
Utilities			3.76
Money Market Funds Plus Other Assets Less Liabilities			0.05

Fund Inception: September 12, 2018

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.23% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

		Shares				Value
Common Stocks & Other Equity Interests-99.89%
Communication Services-1.88%
Comcast Corp., Class A			62,835			$	2,273,999
Fox Corp., Class A			79,019				2,700,869
							4,974,868
Consumer Discretionary-6.25%
Genuine Parts Co.			19,378				3,023,162
Hasbro, Inc.			30,469				2,401,566
McDonald’s Corp.			10,958				2,764,484
O’Reilly Automotive, Inc.(b)			4,325				3,015,044
Starbucks Corp.			34,439				2,895,287
Yum! Brands, Inc.			22,333				2,484,323
							16,583,866
Consumer Staples-11.24%
Altria Group, Inc.			54,383				2,453,761
Church & Dwight Co., Inc.			30,769				2,575,673
General Mills, Inc.			39,225				3,012,480
Hershey Co. (The)			12,838				2,884,313
Hormel Foods Corp.			59,166				2,974,866
Kimberly-Clark Corp.			20,575				2,623,724
Mondelez International, Inc., Class A			42,979				2,658,681
Monster Beverage Corp.(b)			29,825				2,649,355
PepsiCo, Inc.			16,239				2,797,493
Procter & Gamble Co. (The)			18,547				2,558,373
Sysco Corp.			31,603				2,598,399
							29,787,118
Energy-1.86%
Kinder Morgan, Inc.			135,516				2,482,653
Williams Cos., Inc. (The)			71,790				2,443,014
							4,925,667
Financials-11.31%
Allstate Corp. (The)			20,536				2,474,588
Arthur J. Gallagher & Co.			16,763				3,043,658
BlackRock, Inc.			4,063				2,707,542
Cboe Global Markets, Inc.			23,715				2,797,658
Citigroup, Inc.			52,352				2,555,301
Everest Re Group Ltd.			9,552				2,569,966
Goldman Sachs Group, Inc. (The)			8,587				2,856,637
Intercontinental Exchange, Inc.			26,662				2,688,863
Moody’s Corp.			9,480				2,697,250
Nasdaq, Inc.			52,654				3,134,493
Travelers Cos., Inc. (The)			15,295				2,472,284
							29,998,240
Health Care-21.78%
Abbott Laboratories			23,466				2,408,785
AbbVie, Inc.			18,033				2,424,717
AmerisourceBergen Corp.			18,396				2,696,118
Amgen, Inc.			10,963				2,634,409
Becton, Dickinson and Co.			10,560				2,665,555
Bristol-Myers Squibb Co.			35,328				2,381,460
Cardinal Health, Inc.			50,440				3,567,117
CVS Health Corp.			28,785				2,825,248
Elevance Health, Inc.			5,400				2,619,594
Gilead Sciences, Inc.			43,145				2,738,413
Henry Schein, Inc.(b)			32,236				2,366,445
Hologic, Inc.(b)			35,576				2,403,514

		Shares				Value
Health Care-(continued)
Incyte Corp.(b)			35,890			$	2,527,733
IQVIA Holdings, Inc.(b)			12,194				2,593,176
Johnson & Johnson			15,182				2,449,464
Laboratory Corp. of America Holdings			11,339				2,554,336
McKesson Corp.			8,577				3,147,759
Merck & Co., Inc.			30,077				2,567,373
Quest Diagnostics, Inc.			19,855				2,488,030
UnitedHealth Group, Inc.			5,468				2,839,696
Waters Corp.(b)			7,946				2,372,676
Zoetis, Inc.			15,713				2,459,556
							57,731,174
Industrials-15.89%
3M Co.			18,508				2,301,470
A.O. Smith Corp.			44,056				2,486,961
AMETEK, Inc.			22,106				2,656,257
Expeditors International of Washington, Inc.			26,105				2,685,943
IDEX Corp.			13,842				2,785,149
J.B. Hunt Transport Services, Inc.			16,010				2,786,060
Leidos Holdings, Inc.			25,901				2,461,890
Nordson Corp.			12,280				2,789,648
Otis Worldwide Corp.			35,254				2,546,044
Parker-Hannifin Corp.			9,551				2,531,015
Pentair PLC			53,968				2,401,576
Raytheon Technologies Corp.			27,122				2,434,200
Snap-on, Inc.			12,165				2,650,267
Union Pacific Corp.			12,141				2,725,776
United Parcel Service, Inc., Class B			15,059				2,929,126
Verisk Analytics, Inc.			15,859				2,968,170
							42,139,552
Information Technology-12.06%
Akamai Technologies, Inc.(b)			26,710				2,411,379
Amphenol Corp., Class A			38,323				2,817,890
Broadridge Financial Solutions, Inc.			18,568				3,178,285
Citrix Systems, Inc.			27,256				2,801,099
Jack Henry & Associates, Inc.			14,506				2,788,053
NortonLifeLock, Inc.			109,627				2,476,474
Paychex, Inc.			21,428				2,642,930
Roper Technologies, Inc.			6,438				2,591,810
TE Connectivity Ltd. (Switzerland)			20,576				2,596,897
Teledyne Technologies, Inc.(b)			6,693				2,465,433
Texas Instruments, Inc.			16,274				2,688,628
Visa, Inc., Class A			12,606				2,504,938
							31,963,816
Materials-5.74%
Air Products and Chemicals, Inc.			10,663				2,691,874
Avery Dennison Corp.			15,053				2,764,032
Corteva, Inc.			43,408				2,666,554
FMC Corp.			22,842				2,468,763
Linde PLC (United Kingdom)			8,190				2,316,623
Packaging Corp. of America			16,862				2,308,745
							15,216,591
Real Estate-5.88%
American Tower Corp.			10,176				2,585,213
Essex Property Trust, Inc.			9,745				2,583,010
Prologis, Inc.			21,570				2,685,681

		Shares				Value
Real Estate-(continued)
Public Storage			8,502			$	2,812,716
Regency Centers Corp.			41,470				2,523,035
Weyerhaeuser Co.			70,143				2,396,085
							15,585,740
Utilities-6.00%
Atmos Energy Corp.			23,359				2,648,443
Edison International			38,931				2,638,354
Eversource Energy			29,817				2,674,287
Exelon Corp.			55,872				2,453,339
Pinnacle West Capital Corp.			36,091				2,719,457
Sempra Energy			16,880				2,784,694
							15,918,574
Total Common Stocks & Other Equity Interests (Cost $260,366,830)							264,825,206

		Shares				Value
Money Market Funds-0.02%
Invesco Government & Agency Portfolio, Institutional Class, 2.22%(c)(d) (Cost $52,209)			52,209			$	52,209
TOTAL INVESTMENTS IN SECURITIES-99.91% (Cost $260,419,039)							264,877,415
OTHER ASSETS LESS LIABILITIES-0.09%							236,258
NET ASSETS-100.00%						$	265,113,673

		Shares				Value
Common Stocks & Other Equity Interests-99.77%
Australia-5.34%
AGL Energy Ltd.			55,809			$	293,836
Ampol Ltd.			9,876				234,124
APA Group			19,563				148,733
Aristocrat Leisure Ltd.			4,690				114,784
Aurizon Holdings Ltd.			71,125				181,874
BHP Group Ltd.			107,765				2,999,459
BlueScope Steel Ltd.			18,922				216,891
Brambles Ltd.			34,795				295,309
Coles Group Ltd.			36,963				444,970
Computershare Ltd.			5,245				88,814
CSL Ltd.			2,278				458,416
Downer EDI Ltd.			36,181				125,260
Evolution Mining Ltd.			33,448				54,803
Fortescue Metals Group Ltd.			37,682				475,842
Glencore PLC(a)			367,322				2,022,960
Incitec Pivot Ltd.			46,201				124,159
JB Hi-Fi Ltd.			3,217				89,738
Lendlease Corp. Ltd.(b)			21,716				152,894
Metcash Ltd.			43,904				124,005
Newcrest Mining Ltd.			15,566				189,202
OceanaGold Corp.(a)			48,427				71,738
Orica Ltd.			9,174				97,295
Origin Energy Ltd.			56,424				244,080
Orora Ltd.			31,732				72,223
Qantas Airways Ltd.(a)(b)			38,186				139,269
Ramsay Health Care Ltd.			3,394				166,852
Rio Tinto Ltd.			49,880				3,231,450
Rio Tinto PLC			47,157				2,617,939
Santos Ltd.			48,753				263,705
Sonic Healthcare Ltd.			7,054				164,420
South32 Ltd.			117,881				335,375
Tabcorp Holdings Ltd.(b)			38,605				25,407
Telstra Corp. Ltd.			354,902				965,913
Treasury Wine Estates Ltd.			13,497				122,045
Wesfarmers Ltd.			26,560				855,968
Woodside Energy Group Ltd.			53,716				1,261,257
Woolworths Group Ltd.			31,930				789,996
							20,261,005
Austria-0.35%
ams-OSRAM AG(a)			9,083				66,804
ANDRITZ AG			2,350				108,653
Mondi PLC(b)			16,706				284,977
OMV AG			7,286				295,109
UNIQA Insurance Group AG(b)			18,067				119,904
Verbund AG			1,649				158,105
voestalpine AG(b)			9,734				196,935
Wienerberger AG			4,278				100,403
							1,330,890
Belgium-0.92%
Anheuser-Busch InBev S.A./N.V.(b)			51,583				2,507,621
Bekaert S.A.(b)			2,712				83,611
Etablissements Franz Colruyt N.V.(b)			2,616				72,813
Groupe Bruxelles Lambert S.A.			2,275				172,716
Proximus SADP(b)			7,786				99,274
Solvay S.A., Class A(b)			2,907				235,721