LOGO     

 

Invesco Semi-Annual Report to Shareholders

 

April 30, 2022

 

     IVDG   

    Invesco Focused Discovery Growth ETF

 

     IVRA        Invesco Real Assets ESG ETF
     IVSG        Invesco Select Growth ETF
     IVLC        Invesco US Large Cap Core ESG ETF


    

 

 

Table of Contents

 

Liquidity Risk Management Program

     3  

Schedules of Investments

  

Invesco Focused Discovery Growth ETF (IVDG)

     4  

Invesco Real Assets ESG ETF (IVRA)

     6  

Invesco Select Growth ETF (IVSG)

     8  

Invesco US Large Cap Core ESG ETF (IVLC)

     10  

Statements of Assets and Liabilities

     13  

Statements of Operations

     14  

Statements of Changes in Net Assets

     16  

Financial Highlights

     18  

Notes to Financial Statements

     22  

Fund Expenses

     32  

Approval of Investment Advisory and Sub-Advisory Contracts

     33  

 

 

  2  

 

 

 

 


 

Liquidity Risk Management Program

    

 

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

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

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

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

 

   

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

 

   

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

 

   

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

 

   

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

 

   

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

 

 

  3  

 

 

 

 


 

Invesco Focused Discovery Growth ETF (IVDG)

April 30, 2022

(Unaudited)

Schedule of Investments(a)

 

        Shares         Value  
Common Stocks & Other Equity Interests-95.36%

 

Communication Services-2.03%

   

Live Nation Entertainment, Inc.(b)

    161     $ 16,886  
   

 

 

 

Consumer Discretionary-11.10%

   

Dollar Tree, Inc.(b)

    114       18,519  

Hilton Worldwide Holdings, Inc.(b)

    199       30,903  

O’Reilly Automotive, Inc.(b)

    34       20,623  

Tractor Supply Co.

    111       22,361  
   

 

 

 
      92,406  
   

 

 

 

Energy-6.08%

   

Cheniere Energy, Inc.

    234       31,779  

Pioneer Natural Resources Co.

    81       18,830  
   

 

 

 
      50,609  
   

 

 

 

Financials-10.85%

   

Arthur J. Gallagher & Co.

    133       22,409  

KKR & Co., Inc., Class A

    172       8,767  

LPL Financial Holdings, Inc.

    121       22,732  

MSCI, Inc.

    47       19,799  

SVB Financial Group(b)

    34       16,580  
   

 

 

 
      90,287  
   

 

 

 

Health Care-18.41%

   

AmerisourceBergen Corp.

    128       19,365  

Catalent, Inc.(b)

    141       12,769  

IDEXX Laboratories, Inc.(b)

    32       13,775  

Insulet Corp.(b)

    61       14,578  

Mettler-Toledo International, Inc.(b)

    15       19,163  

Molina Healthcare, Inc.(b)

    70       21,941  

Repligen Corp.(b)

    95       14,938  

Tenet Healthcare Corp.(b)

    250       18,128  

West Pharmaceutical Services, Inc.

    59       18,589  
   

 

 

 
      153,246  
   

 

 

 

Industrials-9.77%

   

Advanced Drainage Systems, Inc.

    139       14,242  

AMETEK, Inc.

    222       28,030  

Equifax, Inc.

    44       8,955  

Waste Connections, Inc.

    218       30,077  
   

 

 

 
      81,304  
   

 

 

 
        Shares         Value  

Information Technology-29.69%

   

Cognizant Technology Solutions Corp., Class A

    184     $ 14,886  

Gartner, Inc.(b)

    103       29,927  

Globant S.A.(b)

    85       18,359  

Manhattan Associates, Inc.(b)

    142       18,538  

Marvell Technology, Inc.

    285       16,553  

Monolithic Power Systems, Inc.

    71       27,849  

Motorola Solutions, Inc.

    118       25,215  

Palo Alto Networks, Inc.(b)

    34       19,084  

Paylocity Holding Corp.(b)

    118       22,376  

Synopsys, Inc.(b)

    118       33,841  

Tyler Technologies, Inc.(b)

    52       20,525  
   

 

 

 
      247,153  
   

 

 

 

Materials-1.75%

   

FMC Corp.

    110       14,579  
   

 

 

 

Real Estate-5.68%

   

Alexandria Real Estate Equities, Inc.

    85       15,484  

Extra Space Storage, Inc.

    75       14,250  

Jones Lang LaSalle, Inc.(b)

    80       17,498  
   

 

 

 
      47,232  
   

 

 

 

Total Common Stocks & Other Equity Interests
(Cost $914,756)

 

    793,702  
   

 

 

 
Money Market Funds-4.38%    

Invesco Government & Agency Portfolio, Institutional Class, 0.35%(c)(d)
(Cost $36,469)

    36,469       36,469  
   

 

 

 

TOTAL INVESTMENTS IN SECURITIES-99.74%
(Cost $951,225)

 

    830,171  

OTHER ASSETS LESS LIABILITIES-0.26%

 

    2,154  
   

 

 

 

NET ASSETS-100.00%

    $ 832,325  
   

 

 

 

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) 

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 April 30, 2022.

 

    Value
October 31, 2021
   Purchases
at Cost
   Proceeds
from Sales
   Change in
Unrealized
Appreciation
   Realized
Gain
(Loss)
   Value
April 30, 2022
   Dividend
Income
Investments in Affiliated Money Market Funds:                                  
Invesco Government & Agency Portfolio, Institutional Class     $ 16,890      $ 244,613      $ (225,034 )      $ -      $ -      $ 36,469      $ 17

 

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

 

  4  

 

 

 

 


 

Invesco Focused Discovery Growth ETF (IVDG)–(continued)

April 30, 2022

(Unaudited)

 

    Value
October 31, 2021
   Purchases
at Cost
   Proceeds
from Sales
   Change in
Unrealized
Appreciation
   Realized
Gain
(Loss)
   Value
April 30, 2022
   Dividend
Income
Investments Purchased with Cash Collateral from Securities on Loan:                                  
Invesco Private Government Fund     $ -      $ 19,962      $ (19,962 )      $ -      $ -      $ -      $ -
Invesco Private Prime Fund       -        42,230        (42,228 )        -        (2 )        -        1 *
   

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
Total     $ 16,890      $ 306,805      $ (287,224 )      $ -      $ (2 )      $ 36,469      $ 18
   

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

*

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.

 

(d) 

The rate shown is the 7-day SEC standardized yield as of April 30, 2022.

Portfolio Composition

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

as of April 30, 2022

     

Information Technology

 

   

 

29.69

 

 

 

 

Health Care

 

   

 

18.41

 

 

 

 

Consumer Discretionary

 

   

 

11.10

 

 

 

 

Financials

 

   

 

10.85

 

 

 

 

Industrials

 

   

 

9.77

 

 

 

 

Energy

 

   

 

6.08

 

 

 

 

Real Estate

 

   

 

5.68

 

 

 

 

Sector Types Each Less Than 3%

 

   

 

3.78

 

 

 

 

Money Market Funds Plus Other Assets

Less Liabilities

 

   

 

4.64

 

 

 

 

 

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

 

  5  

 

 

 

 


 

Invesco Real Assets ESG ETF (IVRA)

April 30, 2022

(Unaudited)

Schedule of Investments(a)

 

        Shares         Value  
Common Stocks & Other Equity Interests-99.44%

 

Consumer Staples-1.48%

   

Archer-Daniels-Midland Co.

    579     $ 51,855  
   

 

 

 

Energy-22.96%

   

Cameco Corp. (Canada)

    382       9,914  

Cheniere Energy, Inc.

    836       113,537  

Enbridge, Inc. (Canada)

    4,627       202,957  

Gibson Energy, Inc. (Canada)

    2,328       44,555  

Keyera Corp. (Canada)

    2,849       71,044  

Kinder Morgan, Inc.

    2,173       39,440  

ONEOK, Inc.

    746       47,244  

Pembina Pipeline Corp. (Canada)

    3,045       115,815  

Targa Resources Corp.

    798       58,581  

TC Energy Corp. (Canada)

    1,016       54,018  

Williams Cos., Inc. (The)

    1,365       46,806  
   

 

 

 
      803,911  
   

 

 

 

Materials-13.97%

   

Agnico Eagle Mines Ltd. (Canada)

    1,080       63,192  

Canfor Corp. (Canada)(b)

    1,974       37,810  

Corteva, Inc.

    1,227       70,786  

First Quantum Minerals Ltd. (Zambia)

    709       20,432  

Lundin Mining Corp. (Chile)

    8,990       82,511  

Nutrien Ltd. (Canada)

    792       78,230  

Sylvamo Corp.(b)

    85       3,795  

West Fraser Timber Co. Ltd. (Canada)

    958       84,635  

WestRock Co.

    970       48,044  
   

 

 

 
      489,435  
   

 

 

 

Real Estate-53.39%

   

Acadia Realty Trust

    2,610       54,601  

Agree Realty Corp.

    780       52,978  

Alexandria Real Estate Equities, Inc.

    377       68,674  

American Homes 4 Rent, Class A

    1,568       62,109  

American Tower Corp.

    920       221,738  

Canadian Apartment Properties REIT (Canada)

    1,747       68,784  

Crown Castle International Corp.

    195       36,116  

CubeSmart

    701       33,305  

Douglas Emmett, Inc.

    2,074       61,100  

Duke Realty Corp.

    609       33,343  

Equinix, Inc.

    133       95,638  

Equity Residential

    422       34,393  

Federal Realty Investment Trust

    133       15,569  

Healthcare Realty Trust, Inc.

    1,006       27,242  

Healthpeak Properties, Inc.

    2,717       89,145  

JBG SMITH Properties

    2,530       66,691  

Kilroy Realty Corp.

    715       50,050  

Kimco Realty Corp.

    754       19,099  

Investment Abbreviations:

REIT -Real Estate Investment Trust

        Shares         Value  

Real Estate-(continued)

   

Pebblebrook Hotel Trust

    2,092     $ 51,087  

PotlatchDeltic Corp.

    592       32,791  

Prologis, Inc.

    1,342       215,109  

Regency Centers Corp.

    409       28,151  

SBA Communications Corp., Class A

    386       133,984  

Simon Property Group, Inc.

    642       75,756  

Summit Hotel Properties, Inc.(b)(c)

    5,800       57,246  

Sunstone Hotel Investors, Inc.(b)

    3,169       38,820  

UDR, Inc.

    1,177       62,628  

Washington REIT(c)

    1,126       27,125  

Welltower, Inc.

    304       27,606  

Weyerhaeuser Co.

    695       28,648  
   

 

 

 
      1,869,526  
   

 

 

 

Utilities-7.64%

   

American Water Works Co., Inc.

    740       114,019  

CenterPoint Energy, Inc.

    1,850       56,629  

Consolidated Edison, Inc.

    1,046       97,006  
   

 

 

 
      267,654  
   

 

 

 

Total Common Stocks & Other Equity Interests
(Cost $3,174,025)

 

    3,482,381  
   

 

 

 
Money Market Funds-0.50%

 

Invesco Government & Agency Portfolio, Institutional Class, 0.35%(d)(e)
(Cost $17,454)

    17,454       17,454  
   

 

 

 

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)-99.94%
(Cost $3,191,479)

 

    3,499,835  
   

 

 

 
Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds-2.54%

 

Invesco Private Government Fund, 0.40%(d)(e)(f)

    26,684       26,684  

Invesco Private Prime
Fund, 0.35%(d)(e)(f)

    62,241       62,241  
   

 

 

 

Total Investments Purchased with Cash
Collateral from Securities on Loan
(Cost $88,925)

 

    88,925  
   

 

 

 

TOTAL INVESTMENTS IN SECURITIES-102.48%
(Cost $3,280,404)

      3,588,760  

OTHER ASSETS LESS LIABILITIES-(2.48)%

 

    (87,009
   

 

 

 

NET ASSETS-100.00%

    $ 3,501,751  
   

 

 

 

 

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

 

  6  

 

 

 

 


 

Invesco Real Assets ESG ETF (IVRA)(continued)

April 30, 2022

(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 April 30, 2022.

(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 April 30, 2022.

 

    Value
October 31, 2021
   Purchases
at Cost
   Proceeds
from Sales
   Change in
Unrealized
Appreciation
   Realized
Gain
(Loss)
   Value
April 30, 2022
   Dividend
Income
Investments in Affiliated Money Market Funds:                                  
Invesco Government & Agency Portfolio, Institutional Class     $ 12,077      $ 428,423      $ (423,046 )      $ -      $ -      $ 17,454      $ 12
Investments Purchased with Cash Collateral from Securities on Loan:                                  
Invesco Private Government Fund       1,639        300,469        (275,424 )        -        -        26,684        9 *
Invesco Private Prime Fund       3,665        593,473        (534,891 )        -        (6 )        62,241        27 *
   

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

Total

    $ 17,381      $ 1,322,365      $ (1,233,361 )      $ -      $ (6 )      $ 106,379      $ 48
   

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

*

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 April 30, 2022.

(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.

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

 

Canada    23.73%

 

Portfolio Composition        
Sector Breakdown (% of the Fund’s Net Assets)
as of April 30, 2022
     

Real Estate

 

   

 

53.39

 

 

 

 

Energy

 

   

 

22.96

 

 

 

 

Materials

 

   

 

13.97

 

 

 

 

Utilities

 

   

 

7.64

 

 

 

 

Consumer Staples

 

   

 

1.48

 

 

 

 

Money Market Funds Plus Other Assets

Less Liabilities

 

   

 

0.56

 

 

 

 

 

 

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

 

  7  

 

 

 

 


 

Invesco Select Growth ETF (IVSG)

April 30, 2022

(Unaudited)

Schedule of Investments(a)

 

        Shares         Value  
Common Stocks & Other Equity Interests-100.55%

 

Communication Services-11.65%

   

Alphabet, Inc., Class A(b)

    31     $ 70,748  

Electronic Arts, Inc.

    253       29,867  

Meta Platforms, Inc., Class A(b)

    143       28,667  
   

 

 

 
      129,282  
   

 

 

 

Consumer Discretionary-12.50%

   

Amazon.com, Inc.(b)

    25       62,141  

Booking Holdings, Inc.(b)

    17       37,575  

Farfetch Ltd., Class A (United Kingdom)(b)

    552       6,183  

O’Reilly Automotive, Inc.(b)

    35       21,229  

Penn National Gaming, Inc.(b)

    316       11,556  
   

 

 

 
      138,684  
   

 

 

 

Consumer Staples-3.17%

   

Sysco Corp.

    411       35,132  
   

 

 

 

Energy-6.51%

   

APA Corp.

    1,764       72,200  
   

 

 

 

Financials-4.43%

   

Arthur J. Gallagher & Co.

    292       49,199  
   

 

 

 

Health Care-11.50%

   

Intuitive Surgical, Inc.(b)

    143       34,220  

IQVIA Holdings, Inc.(b)

    172       37,494  

UnitedHealth Group, Inc.

    110       55,941  
   

 

 

 
      127,655  
   

 

 

 
        Shares         Value  

Industrials-5.17%

   

Deere & Co.

    90     $ 33,980  

Lockheed Martin Corp.

    54       23,334  
   

 

 

 
      57,314  
   

 

 

 

Information Technology-42.31%

   

Apple, Inc.

    431       67,947  

Applied Materials, Inc.

    335       36,967  

Microsoft Corp.

    458       127,104  

MongoDB, Inc.(b)

    65       23,071  

NVIDIA Corp.

    265       49,150  

Palo Alto Networks, Inc.(b)

    163       91,489  

QUALCOMM, Inc.

    251       35,062  

Visa, Inc., Class A

    168       35,806  

Zscaler, Inc.(b)

    14       2,838  
   

 

 

 
      469,434  
   

 

 

 

Materials-3.31%

   

Freeport-McMoRan, Inc.

    906       36,738  
   

 

 

 

TOTAL INVESTMENTS IN SECURITIES-100.55%
(Cost $1,284,337)

 

    1,115,638  

OTHER ASSETS LESS LIABILITIES-(0.55)%

 

    (6,089
   

 

 

 

NET ASSETS-100.00%

    $ 1,109,549  
   

 

 

 

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.

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 April 30, 2022.

 

    Value
October 31, 2021
   Purchases
at Cost
   Proceeds
from Sales
   Change in
Unrealized
Appreciation
   Realized
Gain
   Value
April 30, 2022
   Dividend
Income
Investments in Affiliated Money Market Funds:                                  
Invesco Government & Agency Portfolio, Institutional Class     $ 6,376      $ 54,555      $ (60,931 )      $ -      $ -      $ -      $ 2
Investments Purchased with Cash Collateral from Securities on Loan:                                  
Invesco Private Government Fund       20,688        32,484        (53,172 )        -        -        -        -
Invesco Private Prime Fund       48,272        69,309        (117,581 )        -        -        -        2 *
   

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

Total

    $ 75,336      $ 156,348      $ (231,684 )      $ -      $ -      $ -      $ 4
   

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

*

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.

 

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

 

  8  

 

 

 

 


 

Invesco Select Growth ETF (IVSG)–(continued)

April 30, 2022

(Unaudited)

    

 

Portfolio Composition          
Sector Breakdown (% of the Fund’s Net Assets)
as of April 30, 2022
     

Information Technology

 

   

 

42.31

 

 

 

 

Consumer Discretionary

 

   

 

12.50

 

 

 

 

Communication Services

 

   

 

11.65

 

 

 

 

Health Care

 

   

 

11.50

 

 

 

 

Energy

 

   

 

6.51

 

 

 

 

Industrials

 

   

 

5.17

 

 

 

 

Financials

 

   

 

4.43

 

 

 

 

Materials

 

   

 

3.31

 

 

 

 

Consumer Staples

 

   

 

3.17

 

 

 

 

Other Assets Less Liabilities

 

   

 

(0.55

 

 

 

 

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

 

  9  

 

 

 

 


 

Invesco US Large Cap Core ESG ETF (IVLC)

April 30, 2022

(Unaudited)

Schedule of Investments(a)

 

        Shares         Value  
Common Stocks & Other Equity Interests-99.86%

 

Communication Services-7.27%

 

 

Alphabet, Inc., Class A(b)

    113     $  257,887  

Comcast Corp., Class A

    1,044       41,509  

Electronic Arts, Inc.

    535       63,157  

Verizon Communications, Inc.

    1,863       86,257  
   

 

 

 
      448,810  
   

 

 

 

Consumer Discretionary-13.59%

   

Amazon.com, Inc.(b)

    107       265,962  

Aptiv PLC(b)

    389       41,390  

D.R. Horton, Inc.

    744       51,775  

Dollar General Corp.

    253       60,095  

Expedia Group, Inc.(b)

    554       96,812  

Home Depot, Inc. (The)

    388       116,555  

O’Reilly Automotive, Inc.(b)

    133       80,671  

Ross Stores, Inc.

    560       55,871  

Target Corp.

    305       69,738  
   

 

 

 
      838,869  
   

 

 

 

Consumer Staples-7.00%

   

Mondelez International, Inc., Class A

    1,468       94,657  

PepsiCo, Inc.

    633       108,692  

Procter & Gamble Co. (The)

    800       128,440  

Sysco Corp.

    1,171       100,097  
   

 

 

 
      431,886  
   

 

 

 

Energy-2.31%

   

Baker Hughes Co., Class A

    4,585       142,227  
   

 

 

 

Financials-10.95%

   

Allstate Corp. (The)

    449       56,817  

American Express Co.

    497       86,831  

Equitable Holdings, Inc.

    3,451       99,492  

First Citizens BancShares, Inc., Class A

    114       72,889  

Intercontinental Exchange, Inc.

    879       101,797  

JPMorgan Chase & Co.

    767       91,549  

Marsh & McLennan Cos., Inc.

    464       75,029  

S&P Global, Inc.

    134       50,451  

SVB Financial Group(b)

    84       40,962  
   

 

 

 
      675,817  
   

 

 

 

Health Care-12.84%

   

AstraZeneca PLC, ADR
(United Kingdom)

    1,798       119,387  

Cooper Cos., Inc. (The)

    211       76,179  

Danaher Corp.

    342       85,886  

Eli Lilly and Co.

    443       129,414  

HCA Healthcare, Inc.

    583       125,083  

Seagen, Inc.(b)

    449       58,824  

UnitedHealth Group, Inc.

    389       197,826  
   

 

 

 
      792,599  
   

 

 

 

Industrials-10.06%

   

Carrier Global Corp.

    1,611       61,653  

Deere & Co.

    210       79,285  

Hubbell, Inc.

    333       65,055  

Otis Worldwide Corp.

    1,048       76,336  

Rockwell Automation, Inc.

    265       66,957  

Union Pacific Corp.

    364       85,282  
        Shares         Value  

Industrials-(continued)

   

United Parcel Service, Inc., Class B

    719     $ 129,406  

Waste Connections, Inc.

    411       56,706  
   

 

 

 
      620,680  
   

 

 

 

Information Technology-28.92%

   

Accenture PLC, Class A

    376       112,935  

Advanced Micro Devices, Inc.(b)

    797       68,160  

Apple, Inc.

    2,416       380,882  

Applied Materials, Inc.

    959       105,826  

Fiserv, Inc.(b)

    945       92,534  

Microsoft Corp.

    1,487       412,672  

NVIDIA Corp.

    260       48,222  

PayPal Holdings, Inc.(b)

    391       34,381  

QUALCOMM, Inc.

    862       120,413  

salesforce.com, inc.(b)

    551       96,943  

TE Connectivity Ltd. (Switzerland)

    419       52,283  

Visa, Inc., Class A(c)

    477       101,663  

VMware, Inc., Class A

    927       100,153  

Workday, Inc., Class A(b)

    277       57,256  
   

 

 

 
      1,784,323  
   

 

 

 

Materials-1.33%

   

Crown Holdings, Inc.

    743       81,760  
   

 

 

 

Real Estate-3.84%

   

Alexandria Real Estate Equities, Inc.

    184       33,517  

American Tower Corp.

    174       41,938  

Prologis, Inc.

    1,008       161,572  
   

 

 

 
      237,027  
   

 

 

 

Utilities-1.75%

   

Avangrid, Inc.(c)

    741       32,863  

NextEra Energy, Inc.

    1,059       75,210  
   

 

 

 
      108,073  
   

 

 

 

Total Common Stocks & Other Equity Interests
(Cost $6,503,745)

 

    6,162,071  
   

 

 

 
Money Market Funds-0.11%

 

Invesco Government & Agency Portfolio, Institutional Class, 0.35%(d)(e)
(Cost $6,680)

    6,680       6,680  
   

 

 

 

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)-99.97%
(Cost $6,510,425)

      6,168,751  
   

 

 

 
Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds-2.28%

   

Invesco Private Government Fund, 0.40%(d)(e)(f)

    42,213       42,213  

 

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

 

  10  

 

 

 

 


 

Invesco US Large Cap Core ESG ETF (IVLC)–(continued)

April 30, 2022

(Unaudited)

    

 

        Shares         Value  
Money Market Funds-(continued)

 

Invesco Private Prime Fund, 0.35%(d)(e)(f)

    98,500     $ 98,500  
   

 

 

 

Total Investments Purchased with Cash
Collateral from Securities on Loan
(Cost $140,701)

 

    140,713  
   

 

 

 

TOTAL INVESTMENTS IN SECURITIES-102.25%
(Cost $6,651,126)

 

    6,309,464  

OTHER ASSETS LESS LIABILITIES-(2.25)%

      (138,934
   

 

 

 

NET ASSETS-100.00%

    $ 6,170,530  
   

 

 

 

 

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 April 30, 2022.

(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 April 30, 2022.

 

    Value
October 31, 2021
   Purchases
at Cost
   Proceeds
from Sales
   Change in
Unrealized
Appreciation
   Realized
Gain
(Loss)
   Value
April 30, 2022
   Dividend
Income
Investments in Affiliated Money Market Funds:                                  
Invesco Government & Agency Portfolio, Institutional Class     $ 26,020      $ 153,914      $ (173,254)        $ -      $ -      $ 6,680      $ 10
Investments Purchased with Cash Collateral from Securities on Loan:                                  
Invesco Private Government Fund       12,583        119,753        (90,123 )        -        -        42,213        17 *
Invesco Private Prime Fund       27,638        259,083        (188,232 )        12        (1 )        98,500        42 *
   

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
Total     $ 66,241      $ 532,750      $ (451,609 )      $ 12      $ (1 )      $ 147,393      $ 69
   

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

*

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 April 30, 2022.

(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.

 

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

 

  11  

 

 

 

 


 

Invesco US Large Cap Core ESG ETF (IVLC)–(continued)

April 30, 2022

(Unaudited)

    

 

Portfolio Composition          
Sector Breakdown (% of the Fund’s Net Assets)
as of April 30, 2022          
     

Information Technology

 

   

 

28.92

 

 

 

 

Consumer Discretionary

 

   

 

13.59

 

 

 

 

Health Care

 

   

 

12.84

 

 

 

 

Financials

 

   

 

10.95

 

 

 

 

Industrials

 

   

 

10.06

 

 

 

 

Communication Services

 

   

 

7.27

 

 

 

 

Consumer Staples

 

   

 

7.00

 

 

 

 

Real Estate

 

   

 

3.84

 

 

 

 

Sector Types Each Less Than 3%

 

   

 

5.39

 

 

 

 

Money Market Funds Plus Other Assets

Less Liabilities

 

   

 

0.14

 

 

 

 

 

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

 

  12  

 

 

 

 


 

Statements of Assets and Liabilities

April 30, 2022

(Unaudited)

 

    Invesco Focused Discovery
Growth ETF (IVDG)
  Invesco Real Assets
ESG ETF (IVRA)
  Invesco Select
Growth ETF (IVSG)
  Invesco US Large Cap
Core ESG ETF (IVLC)
Assets:                

Unaffiliated investments in securities, at value(a)

    $ 793,702       $ 3,482,381       $ 1,115,638       $ 6,162,071  

Affiliated investments in securities, at value

      36,469         106,379         -         147,393  

Cash

      -         -         -         345  

Foreign currencies, at value

      -         499         -         -  

Receivable for:

               

Dividends

      19         2,996         358         4,030  

Securities lending

      -         2         -         10  

Investments sold

      2,573         -         -         -  
   

 

 

     

 

 

     

 

 

     

 

 

 

Total assets

      832,763       3,592,257       1,115,996       6,313,849
   

 

 

     

 

 

     

 

 

     

 

 

 
Liabilities:                

Due to custodian

      -         -         5,968         -  

Payable for:

               

Investments purchased

      -         3         -         -  

Collateral upon return of securities loaned

      -         88,925         -         140,701  

Accrued unitary management fees

      438         1,578         479         2,618  
   

 

 

     

 

 

     

 

 

     

 

 

 

Total liabilities

      438       90,506       6,447       143,319
   

 

 

     

 

 

     

 

 

     

 

 

 
Net Assets     $ 832,325       $ 3,501,751       $ 1,109,549       $ 6,170,530  
   

 

 

     

 

 

     

 

 

     

 

 

 
Net assets consist of:                

Shares of beneficial interest

    $ 982,081       $ 3,162,399       $ 1,221,276       $ 6,433,463  

Distributable earnings (loss)

      (149,756       339,352         (111,727       (262,933
   

 

 

     

 

 

     

 

 

     

 

 

 
Net Assets     $ 832,325       $ 3,501,751       $ 1,109,549       $ 6,170,530  
   

 

 

     

 

 

     

 

 

     

 

 

 

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

      80,001         230,001         100,001         480,001  

Net asset value

    $ 10.40       $ 15.22       $ 11.10       $ 12.86  
   

 

 

     

 

 

     

 

 

     

 

 

 

Market price

    $ 10.44       $ 15.24       $ 11.09       $ 12.84  
   

 

 

     

 

 

     

 

 

     

 

 

 

Unaffiliated investments in securities, at cost

    $ 914,756       $ 3,174,025       $ 1,284,337       $ 6,503,745  
   

 

 

     

 

 

     

 

 

     

 

 

 

Affiliated investments in securities, at cost

    $ 36,469       $ 106,379       $ -       $ 147,381  
   

 

 

     

 

 

     

 

 

     

 

 

 

Foreign currencies, at cost

    $ -       $ 499       $ -       $ -  
   

 

 

     

 

 

     

 

 

     

 

 

 

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

    $ -       $ 83,510       $ -       $ 133,106  
   

 

 

     

 

 

     

 

 

     

 

 

 

 

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

 

  13  

 

 

 

 


 

Statements of Operations

For the period ended April 30, 2022

(Unaudited)

 

    Invesco Focused Discovery
Growth ETF (IVDG)
  Invesco Real Assets
ESG ETF (IVRA)
  Invesco Select
Growth ETF (IVSG)
  Invesco US Large Cap
Core ESG ETF (IVLC)
Investment income:                

Unaffiliated dividend income

    $ 1,525     $ 39,912     $ 3,264     $ 43,478

Affiliated dividend income

      17       12       2       10

Securities lending income

      1       69       2       25

Foreign withholding tax

      (13 )       (2,172 )       -       (58 )
   

 

 

     

 

 

     

 

 

     

 

 

 

Total investment income

      1,530       37,821       3,268       43,455
   

 

 

     

 

 

     

 

 

     

 

 

 
Expenses:                

Unitary management fees

      2,985       7,760       3,158       16,576
   

 

 

     

 

 

     

 

 

     

 

 

 

Less: Waivers

      (2 )       (1 )       -       (1 )
   

 

 

     

 

 

     

 

 

     

 

 

 

Net expenses

      2,983       7,759       3,158       16,575
   

 

 

     

 

 

     

 

 

     

 

 

 

Net investment income (loss)

      (1,453 )       30,062       110       26,880
   

 

 

     

 

 

     

 

 

     

 

 

 
Realized and unrealized gain (loss) from:                

Net realized gain (loss) from:

               

Unaffiliated investment securities

      (147,079 )       28,241       (190,530 )       (85,009 )

Affiliated investment securities

      (2 )       (6 )       -       (1 )

In-kind redemptions

      204,258       -       272,999       165,228

Foreign currencies

      -       131       -       -
   

 

 

     

 

 

     

 

 

     

 

 

 

Net realized gain

      57,177       28,366       82,469       80,218
   

 

 

     

 

 

     

 

 

     

 

 

 

Change in net unrealized appreciation (depreciation) of:

               

Unaffiliated investment securities

      (360,536 )       68,970       (421,353 )       (920,858 )

Affiliated investment securities

      -       -       -       12

Foreign currencies

      -       (5 )       -       -
   

 

 

     

 

 

     

 

 

     

 

 

 

Change in net unrealized appreciation (depreciation)

      (360,536 )       68,965       (421,353 )       (920,846 )
   

 

 

     

 

 

     

 

 

     

 

 

 

Net realized and unrealized gain (loss)

      (303,359 )       97,331       (338,884 )       (840,628 )
   

 

 

     

 

 

     

 

 

     

 

 

 

Net increase (decrease) in net assets resultingfrom operations

    $ (304,812 )     $ 127,393     $ (338,774 )     $ (813,748 )
   

 

 

     

 

 

     

 

 

     

 

 

 

 

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

 

  14  

 

 

 

 


 

 

(This Page Intentionally Left Blank)

 

 

 

  15  

 

 

 

 


 

Statements of Changes in Net Assets

For the six months ended April 30, 2022 and the year ended October 31, 2021

(Unaudited)

 

    Invesco Focused Discovery
Growth ETF (IVDG)
   Invesco Real Assets
ESG ETF (IVRA)
    Six Months Ended
April 30,

2022
   Period Ended
October 31,
2021(a)
   Six Months
Ended
April 30,
2022
   Period Ended
October 31,
2021(a)
Operations:                   

Net investment income (loss)

    $ (1,453 )      $ (4,063 )      $ 30,062      $ 24,949

Net realized gain (loss)

      57,177        (11,527 )        28,366        78,434

Change in net unrealized appreciation (depreciation)

      (360,536 )        239,482        68,965        239,385
   

 

 

      

 

 

      

 

 

      

 

 

 

Net increase (decrease) in net assets resulting from operations

      (304,812 )        223,892        127,393        342,768
   

 

 

      

 

 

      

 

 

      

 

 

 
Distributions to Shareholders from:                   

Distributable earnings

      -          -          (89,431 )        (41,522 )
   

 

 

      

 

 

      

 

 

      

 

 

 
Shareholder Transactions:                   

Proceeds from shares sold

      2,317,575          1,320,645          1,529,409          1,633,134  

Value of shares repurchased

      (2,319,561 )        (405,414 )        -          -  
   

 

 

      

 

 

      

 

 

      

 

 

 

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

      (1,986 )        915,231          1,529,409          1,633,134  
   

 

 

      

 

 

      

 

 

      

 

 

 

Net increase (decrease) in net assets

      (306,798 )        1,139,123          1,567,371          1,934,380  
   

 

 

      

 

 

      

 

 

      

 

 

 
Net assets:                   

Beginning of period

      1,139,123          -          1,934,380          -  
   

 

 

      

 

 

      

 

 

      

 

 

 

End of period

    $ 832,325        $ 1,139,123        $ 3,501,751        $ 1,934,380  
   

 

 

      

 

 

      

 

 

      

 

 

 
Changes in Shares Outstanding:                   

Shares sold

      170,000          110,001          100,000          130,001  

Shares repurchased

      (170,000 )        (30,000 )        -          -  

Shares outstanding, beginning of period

      80,001          -          130,001          -  
   

 

 

      

 

 

      

 

 

      

 

 

 

Shares outstanding, end of period

      80,001          80,001          230,001          130,001  
   

 

 

      

 

 

      

 

 

      

 

 

 

(a) For the period December 17, 2020 (commencement of investment operations) through October 31, 2021.

 

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

 

  16  

 

 

 

 


 

 

    Invesco Select
Growth ETF (IVSG)
   Invesco US Large Cap
Core ESG ETF (IVLC)
    Six Months Ended
April  30,
2022
   Period Ended
October  31,

2021(a)
   Six Months Ended
April 30,

2022
   Period Ended
October  31,

2021(a)
                    
        $          110      $ (591 )      $ 26,880      $ 31,865
        82,469        (25,173 )        80,218        135,434
        (421,353 )        252,654        (920,846 )        579,184
     

 

 

      

 

 

      

 

 

      

 

 

 
        (338,774 )        226,890        (813,748 )        746,483
     

 

 

      

 

 

      

 

 

      

 

 

 
        -        (125 )        (68,131 )        (29,001 )
     

 

 

      

 

 

      

 

 

      

 

 

 
        2,363,286        1,200,012        1,244,111        7,062,656
        (2,341,740 )        -        (1,142,065 )        (829,775 )
     

 

 

      

 

 

      

 

 

      

 

 

 
        21,546        1,200,012        102,046        6,232,881
     

 

 

      

 

 

      

 

 

      

 

 

 
        (317,228 )        1,426,777        (779,833 )        6,950,363
     

 

 

      

 

 

      

 

 

      

 

 

 
        1,426,777        -        6,950,363        -
     

 

 

      

 

 

      

 

 

      

 

 

 
        $1,109,549      $ 1,426,777      $ 6,170,530      $ 6,950,363
     

 

 

      

 

 

      

 

 

      

 

 

 
        170,000        100,001        90,000        530,001
        (170,000 )        -        (80,000 )        (60,000 )
        100,001        -        470,001        -
     

 

 

      

 

 

      

 

 

      

 

 

 
        100,001        100,001        480,001        470,001
     

 

 

      

 

 

      

 

 

      

 

 

 

 

 

  17  

 

 

 

 


 

Financial Highlights

 

Invesco Focused Discovery Growth ETF (IVDG)

 

    Six
Months Ended
April 30, 2022
(Unaudited)
  For the Period
December 17,  2020(a)
Through
October 31, 2021

Per Share Operating Performance:

       

Net asset value at beginning of period

    $ 14.24     $ 12.00
   

 

 

     

 

 

 

Net investment income (loss)(b)

      (0.02 )       (0.04 )

Net realized and unrealized gain (loss) on investments

      (3.82 )       2.28
   

 

 

     

 

 

 

Total from investment operations

      (3.84 )       2.24
   

 

 

     

 

 

 

Net asset value at end of period

    $ 10.40     $ 14.24
   

 

 

     

 

 

 

Market price at end of period(c)

    $ 10.44     $ 14.25
   

 

 

     

 

 

 

Net Asset Value Total Return(d)

      (26.97 )%       18.67 %(e)

Market Price Total Return(d)

      (26.74 )%       18.75 %(e)

Ratios/Supplemental Data:

       

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

    $ 832     $ 1,139

Ratio to average net assets of:

       

Expenses(f)

      0.59 %       0.58 %

Net investment income (loss)(f)

      (0.29 )%       (0.36 )%

Portfolio turnover rate(g)

      86 %       135 %

 

(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 (December 22, 2020, the first day of trading on the exchange) to October 31, 2021 was 16.53%. The market price total return from Fund Inception to October 31, 2021 was 16.61%.

(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.

 

  18  

 

 

 

 


 

Financial Highlights–(continued)

 

Invesco Real Assets ESG ETF (IVRA)

 

    Six Months Ended
April 30, 2022
(Unaudited)
   For the Period
December 17,  2020(a)
Through
October 31, 2021

Per Share Operating Performance:

        

Net asset value at beginning of period

    $ 14.88      $ 12.00
   

 

 

      

 

 

 

Net investment income(b)

      0.17        0.22

Net realized and unrealized gain on investments

      0.59        3.04
   

 

 

      

 

 

 

Total from investment operations

      0.76        3.26
   

 

 

      

 

 

 

Distributions to shareholders from:

        

Net investment income

      (0.02 )        (0.38 )

Net realized gains

      (0.40 )        -
   

 

 

      

 

 

 

Total distributions

      (0.42 )        (0.38 )
   

 

 

      

 

 

 

Net asset value at end of period

    $ 15.22      $ 14.88
   

 

 

      

 

 

 

Market price at end of period(c)

    $ 15.24      $ 14.96
   

 

 

      

 

 

 

Net Asset Value Total Return(d)

      6.17 %        27.65 %(e)

Market Price Total Return(d)

      5.73 %        28.33 %(e)

Ratios/Supplemental Data:

        

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

    $ 3,502      $ 1,934

Ratio to average net assets of:

        

Expenses(f)

      0.59 %        0.60 %

Net investment income(f)

      2.29 %        1.86 %

Portfolio turnover rate(g)

      32 %        52 %

 

(a) 

Commencement of investment operations.

(b) 

Based on average shares outstanding

(c) 

The mean bietween 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 (December 22, 2020, the first day of trading on the exchange) to October 31, 2021 was 32.40%. The market price total return from Fund Inception to October 31, 2021 was 32.53%.

(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.

 

  19  

 

 

 

 


 

Financial Highlights–(continued)

 

Invesco Select Growth ETF (IVSG)

 

    Six Months Ended
April 30, 2022
(Unaudited)
  For the Period
December 17,  2020(a)
Through
October 31, 2021

Per Share Operating Performance:

       

Net asset value at beginning of period

    $ 14.27     $ 12.00
   

 

 

     

 

 

 

Net investment income (loss)(b)

      0.00 (c)        (0.01 )

Net realized and unrealized gain (loss) on investments

      (3.17 )       2.28
   

 

 

     

 

 

 

Total from investment operations

      (3.17 )       2.27
   

 

 

     

 

 

 

Net asset value at end of period

    $ 11.10     $ 14.27
   

 

 

     

 

 

 

Market price at end of period(d)

    $ 11.09     $ 14.26
   

 

 

     

 

 

 

Net Asset Value Total Return(e)

      (22.21 )%       18.93 %(f)

Market Price Total Return(e)

      (22.23 )%       18.84 %(f)

Ratios/Supplemental Data:

       

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

    $ 1,110     $ 1,427

Ratio to average net assets of:

       

Expenses(g)

      0.48 %       0.47 %

Net investment income (loss)(g)

      0.02 %       (0.05 )%

Portfolio turnover rate(h)

      55 %       33 %

 

(a) 

Commencement of investment operations.

(b)

Based on average shares outstanding.

(c)

Amount represents less than $0.005.

(d)

The mean between the last bid and ask prices.

(e) 

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.

(f) 

The net asset value total return from Fund Inception (December 22, 2020, the first day of trading on the exchange) to October 31, 2021 was 18.93%. The market price total return from Fund Inception to October 31, 2021 was 18.65%.

(g) 

Annualized.

(h) 

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.

 

  20  

 

 

 

 


 

Financial Highlights–(continued)

Invesco US Large Cap Core ESG ETF (IVLC)

 

    Six Months Ended
April 30,
2022
(Unaudited)
  For the Period
December 17,  2020(a)
Through
October 31,
2021

Per Share Operating Performance:

       

Net asset value at beginning of period

      $14.79       $12.00
   

 

 

     

 

 

 

Net investment income(b)

      0.06       0.10

Net realized and unrealized gain (loss) on investments

      (1.87 )       2.78
   

 

 

     

 

 

 

Total from investment operations

      (1.81 )       2.88
   

 

 

     

 

 

 

Distributions to shareholders from:

       

Net investment income

      (0.04 )       (0.09 )

Net realized gains

      (0.08 )       -
   

 

 

     

 

 

 

Total distributions

      (0.12 )       (0.09 )
   

 

 

     

 

 

 

Net asset value at end of period

      $12.86       $14.79
   

 

 

     

 

 

 

Market price at end of period(c)

      $12.84       $14.78
   

 

 

     

 

 

 

Net Asset Value Total Return(d)

      (12.20 )%       24.07 %(e)

Market Price Total Return(d)

      (12.28 )%       23.98 %(e)

Ratios/Supplemental Data:

       

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

      $6,171       $6,950

Ratio to average net assets of:

       

Expenses(f)

      0.48 %       0.47 %

Net investment income(f)

      0.78 %       0.82 %

Portfolio turnover rate(g)

      12 %       50 %

 

(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 (December 22, 2020, the first day of trading on the exchange) to October 31, 2021 was 25.01%. The market price total return from Fund Inception to October 31, 2021 was 24.82%.

(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.

 

  21  

 

 

 

 


 

Notes to Financial Statements

Invesco Actively Managed Exchange-Traded Fund Trust

April 30, 2022

(Unaudited)

 

NOTE 1–Organization

Invesco Actively Managed Exchange-Traded Fund Trust (the “Trust”) was organized as a Delaware statutory 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 Focused Discovery Growth ETF (IVDG)    “Focused Discovery Growth ETF”
Invesco Real Assets ESG ETF (IVRA)    “Real Assets ESG ETF”
Invesco Select Growth ETF (IVSG)    “Select Growth ETF”
Invesco US Large Cap Core ESG ETF (IVLC)    “US Large Cap Core ESG 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 Cboe BZX Exchange, 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 for Focused Discovery Growth ETF and Select Growth ETF are issued and redeemed principally in exchange for the deposit or delivery of a basket of securities which includes a significant percentage of securities held in each Fund’s portfolio, but excludes or modifies the weightings of certain securities (the “Substitute Basket”), as well as cash included in the Fund’s Substitute Basket. Creation Units for Real Assets ESG ETF and US Large Cap Core ESG ETF are issued and redeemed principally in exchange for (1) select recently disclosed portfolio holdings (“Strategy Components”), (2) an amount of cash corresponding to the value of ETFs that convey information about the types of instruments in which each Fund invests (“Representative ETFs”) and (3) cash and cash equivalents, which, together with the Strategy Components and Representative ETFs, constitute the “Tracking Basket”. Except when aggregated in Creation Units by authorized participants, the Shares are not individually redeemable securities of the Funds.

The investment objective of Focused Discovery Growth ETF and US Large Cap Core ESG ETF is to seek capital appreciation. The investment objective of Real Assets ESG ETF is to seek capital appreciation with a secondary objective of current income. The investment objective of Select Growth ETF is to seek long-term capital appreciation.

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 last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded or, lacking any sales 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 (“OTC”) market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked prices from the exchange on which they are principally traded, or at the final settlement price set by such exchange. Swaps and options not listed on an exchange are valued by an independent source. For purposes of determining NAV per Share, futures and option contracts may be valued up to 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

Investment companies are valued using such company’s NAV per share, unless the shares are exchange-traded, in which case they are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.

Debt obligations (including convertible debt securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes 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

 

  22  

 

 

 

 


 

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, odd lot sizes. Odd lots often trade at lower prices than institutional round lots. 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. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that Invesco Capital Management LLC (the “Adviser”) determines are significant and make the closing price unreliable, a Fund 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 using procedures approved by the Board of Trustees. 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 approved 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.

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 or became unreliable are valued at fair value as determined in good faith following procedures approved by the Board of Trustees. 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 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.

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 withholding tax, if any) is recorded on the ex-dividend date. Dividend income from REITs is recorded based on the income included in the distributions received from the REIT investments using published REIT classifications, including some management estimates when actual amounts are not available. Distributions received in excess of this estimated amount are recorded as a reduction of the cost of investments or reclassified to capital gains. The actual amounts of income, return of capital, and capital gains are only determined by each REIT after its fiscal year-end, and may differ from the estimated amounts. 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 each 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.

 

  23  

 

 

 

 


 

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 each Fund’s NAV and, accordingly, they reduce each 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 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 and the country that has the primary market for the issuer’s securities, 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 Real Assets ESG ETF) declares and pays dividends from net investment income, if any, to their shareholders quarterly and records such dividends on the ex-dividend date. Real Assets ESG ETF declares and pays dividends from net investment income, if any, to its shareholders monthly 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 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 payments to Invesco Advisers, Inc. (the “Affiliated Sub-Adviser”), and for each Fund, 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).

Expenses of the Trust that are excluded from a Fund’s unitary management fee and are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that are excluded from a Fund’s unitary management fee and 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.

 

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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 continues to serve 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 April 30, 2022, 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  

Real Assets ESG ETF

    $1  

US Large Cap Core ESG ETF

    3  

 

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.

 

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K. Other Risks

ADR Risk. Certain Funds may invest in American Depositary Receipts (“ADRs”). 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. ADRs 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 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.

Arbitrage Risk. Unlike ETFs that publicly disclose their complete portfolio holdings each Business Day, the Funds provide certain other information intended to allow market participants to estimate the value of positions in Fund shares. Although this information is designed to facilitate arbitrage opportunities in Shares to reduce bid/ask spread and minimize discounts or premiums between the market price and the NAV of the Shares, there is no guarantee the Funds’ arbitrage mechanism will operate as intended and that the Funds will not experience wide bid/ask spreads and/or large discounts or premiums to NAV. In addition, market participants may attempt to use the disclosed information to “reverse engineer” the Funds’ trading strategy, which, if successful, could increase opportunities for predatory trading practices that may have the potential to negatively impact the Funds’ performance.

Authorized Participant Concentration Risk. Only authorized participants (“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 this risk.

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 market 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, unexpected market closures, and lack of timely information.

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.

ESG Risk. Because Real Assets ESG ETF and US Large Cap Core ESG ETF evaluate ESG factors to assess and exclude certain investments for non-financial reasons, such Funds may forego some market opportunities available to funds that do not use these factors. The securities of companies that score favorably under a Fund’s ESG scoring methodology may underperform similar companies that do not score as well or may underperform the stock market as a whole. As a result, Real Assets ESG ETF and US Large Cap Core ESG ETF may underperform funds that do not screen or score companies based on ESG factors or funds that use a different ESG methodology. Information used by a Fund to evaluate such factors may not be readily available,

 

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complete or accurate, which could negatively impact the Fund’s ability to apply its methodology, which in turn could negatively impact the Fund’s performance. In addition, a Fund’s assessment of a company, based on the company’s level of involvement in a particular industry or the company’s ESG score, may differ from that of other funds or an investor. As a result, the companies deemed eligible for inclusion in a Fund’s portfolio may not reflect the beliefs or values of any particular investor and may not be deemed to exhibit positive or favorable ESG characteristics if different metrics were used to evaluate them.

Fluctuation of Net Asset Value and Share Price Risk. Shares may trade at a larger premium or discount to the NAV than shares of other ETFs, including ETFs that make their daily holdings public. The NAV of the Funds will generally fluctuate with changes in the market value of the Funds’ holdings. The Shares can be bought and sold in the secondary market at market prices. Disruptions to creations and redemptions, the existence of extreme market volatility or potential lack of an active trading market for the Shares may result in the Shares trading significantly above (at a premium) or below (at a discount) NAV. In addition, in stressed market conditions or periods of market disruption or volatility, the market for Shares may become less liquid in response to deteriorating liquidity in the markets for the Funds’ underlying portfolio holdings.

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.

Industry Concentration Risk. Certain Funds are concentrated to a significant degree in securities of issuers operating in a single industry or industry group. By concentrating their investments in an industry or industry group, such Funds may face more risks than if they were diversified broadly over numerous industries or industry groups. Such industry-based risks, any of which may adversely affect the companies in which some Funds invest, 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.

Management Risk. The Funds are subject to management risk because they are actively managed portfolios. In managing a Fund’s portfolio securities, the Adviser or a sub-adviser (as applicable and as set forth below) applies investment techniques and risk analyses in making investment decisions, but there can be no guarantee that these will produce the desired results.

Market Risk. The Funds’ holdings 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 holdings in a Fund’s portfolio. Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to each Fund’s NAV.

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 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.

Non-Transparent Actively Managed Fund Risk. Focused Discovery Growth ETF and Select Growth ETF publish each Business Day on each Fund’s website a “Substitute Basket,” which is designed to closely track the daily performance of each Fund but is not each Fund’s actual portfolio. The Substitute Basket often will include a significant percentage of the securities held in each Fund’s portfolio, but it will exclude (or modify the weightings of) certain securities held in each Fund’s portfolio, such as those securities that each Fund’s portfolio managers are actively looking to purchase or sell. Disclosure of the Substitute Basket structure may affect the price at which Shares trade in the secondary market. Although the Substitute Basket is intended to provide investors with enough information to allow for an effective arbitrage mechanism that will keep the market price of each Fund at or close to each Fund’s NAV per share, there is a risk that market prices will vary significantly from NAV. By trading on the basis of a published Substitute Basket, each Fund may trade at a wider bid/ask spread than ETFs that publish their full portfolios on a daily basis, and therefore, may cost investors more to trade. These risks may increase during periods of market disruption or volatility. In addition, although each Fund seeks to benefit from keeping its portfolio information secret, market participants may attempt to use the Substitute Basket to identify the fund’s trading strategy. If successful, this could result in such market participants engaging in certain predatory trading practices that may have the potential to harm each Fund and its shareholders, such as front running each Fund’s trades of portfolio securities. Real Assets ESG ETF and US Large Cap Core ESG ETF publish each Business Day on each Fund’s website a “Tracking Basket,” which is designed to closely track the daily performance of each Fund but is not each Fund’s actual portfolio. The Tracking Basket is comprised of: (1) Strategy Components; (2) Representative ETFs; and (3) cash and cash equivalents. Each Fund also publishes

 

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each Business Day on its website the “Tracking Basket Weight Overlap,” which is the percentage weight overlap between the holdings of the prior Business Day’s Tracking Basket compared to the holdings of each Fund that formed the basis for each Fund’s calculation of NAV per share at the end of the prior Business Day. The Tracking Basket Weight Overlap is designed to provide investors with an understanding of how similar the Tracking Basket is to each Fund’s actual portfolio in percentage terms. Given the differences between each Fund and ETFs that disclose their complete holdings daily, there is a risk that market prices of each Fund may vary significantly from NAV, and that the Shares may trade at a wider bid/ask spread—and therefore cost investors more to trade—than shares of other ETFs. These risks are heightened during periods of market disruption or volatility. Similarly to mutual funds and other ETFs, each Fund discloses the complete schedule of its portfolio holdings on Form N-PORT after its first and third fiscal quarters and in shareholder reports after its second and fourth fiscal quarters.

Real Assets Companies Risk. Investments in real assets companies may involve a higher degree of risk, including significant financial, operating, and competitive risks, and may expose the Real Assets ESG ETF to adverse macroeconomic conditions, such as changes and volatility in commodity prices, a rise in interest rates or a downturn in the economy in which the asset is located, elevating the risk of loss.

REIT Risk. REITs are pooled investment vehicles that trade like stocks and invest substantially all of their assets in real estate and may qualify for special tax considerations. REITs are subject to certain risks inherent in the direct ownership of real estate, including without limitation, a possible lack of mortgage funds and associated interest rate risks, overbuilding, property vacancies, increases in property taxes and operating expenses, changes in zoning laws, losses due to environmental damages and changes in neighborhood values and appeal to purchasers. Further, failure of a company to qualify as a REIT under federal tax law may have adverse consequences to the REIT’s shareholders. In addition, REITs may have expenses, including advisory and administration expenses, and REIT shareholders will incur a proportionate share of the underlying expenses.

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.

Trading Halt Risk. There may be circumstances where a security held in a Fund’s portfolio but not in the Substitute Basket or Tracking Basket does not have readily available market quotations. If the Adviser or the Affiliated Sub-Adviser determines that such circumstance may affect the reliability of the Substitute Basket or Tracking Basket as an arbitrage vehicle, that information, along with the identity and weighting of that security in the Fund’s portfolio, will be publicly disclosed on the Fund’s website and the Adviser or the Sub-Adviser will assess appropriate remedial measures. In these circumstances, market participants may use this information to engage in certain predatory trading practices that may have the potential to harm the Fund and its shareholders. If securities representing 10% or more of the Fund’s portfolio do not have readily available market quotations, the Adviser would promptly request the Cboe BZX Exchange, Inc. (the “Exchange”) to halt trading on the Fund, meaning that investors would not be able to trade the Shares. Moreover, trading in Shares on the Exchange may be halted due to market conditions or for reasons that, in the view of the Exchange, make trading in Shares inadvisable. In addition, trading in Shares on the Exchange is subject to trading halts caused by extraordinary market volatility pursuant to the Exchange’s “circuit breaker” rules. There can be no assurance that the requirements of the Exchange necessary to maintain the listing of the Fund will continue to be met or will remain unchanged.

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 the Funds’ investments, managing the Funds’ business affairs, providing certain clerical, bookkeeping and other administrative services, and for each Fund, oversight of the Affiliated Sub-Adviser.

Pursuant to an Investment Advisory Agreement, each Fund 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 payments to the Affiliated Sub-Adviser for each Fund, and for each Fund 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

 

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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)

Focused Discovery Growth ETF

  0.59%

Real Assets ESG ETF

  0.59%

Select Growth ETF

  0.48%

US Large Cap Core ESG ETF

  0.48%

The Adviser has entered into an Investment Sub-Advisory Agreement with the Affiliated Sub-Adviser for each Fund. The sub-advisory fee for these Funds is paid by the Adviser to the Affiliated Sub-Adviser at 40% of the Adviser’s compensation of the sub-advised assets of each Fund.

Further, through at least August 31, 2024, 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. These waivers do 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.

For the six months ended April 30, 2022, the Adviser waived fees for each Fund in the following amounts:

 

Focused Discovery Growth ETF

    $2  

Real Assets ESG ETF

    1  

Select Growth ETF

    -  

US Large Cap Core ESG ETF

    1  

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 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.

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 or are unreliable. 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 a Fund’s own 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 April 30, 2022, for each Fund (except for Focused Discovery Growth ETF and Select Growth ETF). As of April 30, 2022, all of the securities in Focused Discovery Growth ETF and Select Growth ETF were valued based on Level 1 inputs (see the Schedules of Investments for security categories). 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.

 

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    Level 1      Level 2     

Level 3

   Total  

Real Assets ESG ETF

          

Investments in Securities

          

Common Stocks & Other Equity Interests

  $ 3,482,381      $ -      $-    $ 3,482,381  

Money Market Funds

    17,454        88,925        -      106,379  
 

 

 

    

 

 

    

 

  

 

 

 

Total Investments

  $ 3,499,835      $ 88,925      $-    $ 3,588,760  
 

 

 

    

 

 

    

 

  

 

 

 

US Large Cap Core ESG ETF

          

Investments in Securities

          

Common Stocks & Other Equity Interests

  $ 6,162,071      $ -      $-    $ 6,162,071  

Money Market Funds

    6,680        140,713        -      147,393  
 

 

 

    

 

 

    

 

  

 

 

 

Total Investments

  $ 6,168,751      $ 140,713      $-    $ 6,309,464  
 

 

 

    

 

 

    

 

  

 

 

 

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 October 31, 2021, as follows:

 

    No expiration       
        Short-Term          Long-Term      Total    

Focused Discovery Growth ETF

    $  80,499            $-      $80,499    

Real Assets ESG ETF

              -              -      -    

Select Growth ETF

      25,173              -      25,173    

US Large Cap Core ESG ETF

              -              -      -    

NOTE 6–Investment Transactions

For the six months ended April 30, 2022, 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  

Focused Discovery Growth ETF

  $ 834,683      $ 872,283  

Real Assets ESG ETF

    1,338,509        857,476  

Select Growth ETF

    708,188        1,285,559  

US Large Cap Core ESG ETF

    811,732        860,398  

For the six months ended April 30, 2022, in-kind transactions associated with creations and redemptions were as follows:

 

    In-kind
Purchases
     In-kind
Sales
 

Focused Discovery Growth ETF

  $ 2,015,901      $ 2,004,005  

Real Assets ESG ETF

    984,646        -  

Select Growth ETF

    2,192,372        1,581,201  

US Large Cap Core ESG ETF

    1,131,913        996,643  

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

 

  30  

 

 

 

 


 

As of April 30, 2022, 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  

Focused Discovery Growth ETF

   $  11,431    $(132,485)   $(121,054)   $ 951,225    

Real Assets ESG ETF

     355,912        (47,562)     308,350     3,280,410    

Select Growth ETF

       36,273      (204,972)     (168,699)     1,284,337    

US Large Cap Core ESG ETF

     294,980      (637,501)     (342,521)     6,651,985    

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 each Fund’s unitary management fee, pays for such compensation for the Funds. 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 Authorized Participants are permitted to purchase or redeem Creation Units from the Funds. For Focused Discovery Growth ETF and Select Growth ETF, such transactions are principally permitted in exchange for the securities and cash in each Fund’s Substitution Basket. For Real Assets ESG ETF and US Large Cap Core ESG ETF, such transactions are principally permitted in exchange for the Strategy Components included in each Fund’s Tracking Basket, together with an amount of cash corresponding to the value of the Representative ETFs and cash and cash equivalents that form the remainder of the Tracking Basket. 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 Authorized Participant 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 Authorized Participant, notwithstanding the fact that the corresponding Deposit Securities have not been received in part or in whole, in reliance on the undertaking of the Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking shall be secured by the Authorized Participant’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 a Fund of the Invesco Actively Managed Exchange-Traded Fund Trust, you incur a unitary management fee. In addition to the 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 November 1, 2021 through April 30, 2022.

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 transactional 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, expenses shown in the table do not include the expenses of the underlying funds, which are borne indirectly by a Fund. If transaction costs and indirect expenses were included, your costs would have been higher.

 

    Beginning
Account Value
November 1, 2021
   Ending
Account Value
April 30, 2022
   Annualized
Expense Ratio
Based on the
Six-Month Period
  

Expenses Paid
During the

Six-Month Period(1)

Invesco Focused Discovery Growth ETF (IVDG)

          

Actual

  $1,000.00    $  730.30        0.59%    $2.53  

Hypothetical (5% return before expenses)

    1,000.00    1,021.87    0.59    2.96

Invesco Real Assets ESG ETF (IVRA)

          

Actual

    1,000.00    1,061.70    0.59    3.02

Hypothetical (5% return before expenses)

    1,000.00    1,021.87    0.59    2.96

Invesco Select Growth ETF (IVSG)

          

Actual

    1,000.00      777.90    0.48    2.12

Hypothetical (5% return before expenses)

    1,000.00    1,022.41    0.48    2.41

Invesco US Large Cap Core ESG ETF (IVLC)

          

Actual

    1,000.00      878.00    0.48    2.24

Hypothetical (5% return before expenses)

    1,000.00    1,022.41    0.48    2.41

 

(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 April 30, 2022. 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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Approval of Investment Advisory and Sub-Advisory Contracts

 

At a meeting held on April 6, 2022, the Board of Trustees of the Invesco Actively Managed Exchange-Traded Fund Trust (the “Trust”), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco Capital Management LLC (the “Adviser”) and the Trust for the following 17 series (each, a “Fund” and collectively, the “Funds”):

 

Invesco Active U.S. Real Estate ETF    Invesco Total Return Bond ETF
Invesco Balanced Multi-Asset Allocation ETF    Invesco US Large Cap Core ESG ETF
Invesco Conservative Multi-Asset Allocation ETF    Invesco Variable Rate Investment Grade ETF
Invesco Focused Discovery Growth ETF    Invesco High Yield Bond Factor ETF
Invesco Growth Multi-Asset Allocation ETF    Invesco Corporate Bond Factor ETF
Invesco Moderately Conservative Multi-Asset Allocation ETF    Invesco Intermediate Bond Factor ETF
Invesco Real Assets ESG ETF    Invesco Multi-Sector Bond Income Factor ETF
Invesco S&P 500® Downside Hedged ETF    Invesco Short-Term Bond Factor ETF
Invesco Select Growth ETF   

Also at the April 6, 2022 meeting, the Board of Trustees of the Trust, including the Independent Trustees, approved the continuation of the Investment Sub-Advisory Agreement between the Adviser and the following seven affiliated sub-advisers: Invesco Advisers, Inc.; Invesco Asset Management Deutschland, GmbH; Invesco Asset Management Limited; Invesco Asset Management (Japan) Limited; Invesco Hong Kong Limited; Invesco Senior Secured Management, Inc.; and Invesco Canada Ltd. (each, a “Sub-Adviser” and collectively, the “Sub-Advisers”); with respect to each of the following 16 Funds (the “Sub-Advisory Agreement”):

 

Invesco Active U.S. Real Estate ETF    Invesco Total Return Bond ETF
Invesco Balanced Multi-Asset Allocation ETF    Invesco US Large Cap Core ESG ETF
Invesco Conservative Multi-Asset Allocation ETF    Invesco Variable Rate Investment Grade ETF
Invesco Focused Discovery Growth ETF    Invesco High Yield Bond Factor ETF
Invesco Growth Multi-Asset Allocation ETF    Invesco Corporate Bond Factor ETF
Invesco Moderately Conservative Multi-Asset Allocation ETF    Invesco Intermediate Bond Factor ETF
Invesco Real Assets ESG ETF    Invesco Multi-Sector Bond Income Factor ETF
Invesco Select Growth ETF    Invesco Short-Term Bond Factor ETF

Investment Advisory Agreement

The Trustees reviewed information from the Adviser describing: (i) the nature, extent and quality of services provided or to be provided, (ii) the investment performance of each Fund, as applicable, and the Adviser, (iii) the fees paid or to be paid by the Funds and comparisons to amounts paid by other comparable registered investment companies, (iv) the costs of services provided or to be provided and estimated profits realized by the Adviser, as applicable, (v) the extent to which economies of scale may be realized as a Fund grows and whether fee levels reflect any possible economies of scale for the benefit of Fund shareholders and (vi) any further benefits realized by the Adviser or its affiliates from the Adviser’s relationship with the Funds.

Nature, Extent and Quality of Services. In evaluating the nature, extent and quality of the Adviser’s services, the Trustees reviewed information concerning the functions performed by the Adviser for the Funds, information describing the Adviser’s current organization and staffing, including operational support provided by the Adviser’s parent organization, Invesco Ltd. (“Invesco”), and the background and experience of the persons responsible for the day-to-day management of the Funds. The Trustees reviewed matters related to the Adviser’s execution and/or oversight of execution of portfolio transactions on behalf of the Funds. The Trustees noted that, unlike most of the other exchange-traded funds (“ETFs”) for which the Adviser serves as investment adviser, the Funds are not designed to track the performance of an index, and investment decisions are the primary responsibility of the Adviser or Sub-Advisers, as applicable.

The Trustees reviewed information on the performance of Invesco Active U.S. Real Estate ETF, its benchmark index (FTSE NAREIT All Equity REITs Index) and the Fund’s Lipper Inc. (“Lipper”) peer group rankings (the 1st quartile being the best performers and the 4th quartile being the worst performers) for the one-year, three-year, five-year, ten-year and since-inception (November 20, 2008) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund underperformed its benchmark for the three-year, five-year, ten-year and since-inception periods and outperformed its

 

  33  

 

 

 

 


 

Approval of Investment Advisory and Sub-Advisory Contracts–(continued)

 

benchmark for the one-year period. The Board also noted that the Fund ranked in the 2nd quartile of its Lipper peer group for the one-year, five-year, ten-year and since-inception periods, and in the 3rd quartile of its Lipper peer group for the three-year period.

The Trustees reviewed information on the performance of Invesco Balanced Multi-Asset Allocation ETF, its benchmark indexes (Custom Invesco Balanced Allocation ETF Index and S&P 500® Index) and the Fund’s Lipper peer group rankings for the one-year, three-year and since-inception (February 23, 2017) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund outperformed the Custom Invesco Balanced Allocation ETF Index for each period and underperformed the S&P 500® Index for each period. The Board also noted that the Fund ranked in the 2nd quartile of its Lipper peer group for the one-year period and in the 3rd quartile of its Lipper peer group for the three-year and since-inception periods.

The Trustees reviewed information on the performance of Invesco Conservative Multi-Asset Allocation ETF, its benchmark indexes (Custom Invesco Conservative Allocation ETF Index and S&P 500® Index) and the Fund’s Lipper peer group rankings for the one-year, three-year and since-inception (February 23, 2017) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund outperformed the Custom Invesco Conservative Allocation ETF Index for each period and underperformed the S&P 500® Index for each period. The Board also noted that the Fund ranked in the 3rd quartile of its Lipper peer group for the one-year and three-year periods and ranked in the 2nd quartile of its Lipper peer group for the since-inception period.

The Trustees reviewed information on the performance of Invesco Focused Discovery Growth ETF, its benchmark index (Russell Midcap Growth Index) and the Fund’s Lipper peer group rankings for the one-year and since-inception (December 22, 2020) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund outperformed its benchmark for each period. The Board also noted that the Fund ranked in the 2nd quartile of its Lipper peer group for each period.

The Trustees reviewed information on the performance of Invesco Growth Multi-Asset Allocation ETF, its benchmark indexes (Custom Invesco Growth Allocation ETF Index and S&P 500® Index) and the Fund’s Lipper peer group rankings for the one-year, three-year and since-inception (February 23, 2017) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund outperformed the Custom Invesco Growth Allocation ETF Index for each period and underperformed the S&P 500® Index for each period. The Board also noted that the Fund ranked in the 1st quartile of its Lipper peer group for the one-year and since-inception periods and in the 2nd quartile of its Lipper peer group for the three-year period.

The Trustees reviewed information on the performance of Invesco Moderately Conservative Multi-Asset Allocation ETF, its benchmark indexes (Custom Invesco Moderately Conservative Allocation ETF Index and S&P 500® Index) and the Fund’s Lipper peer group rankings for the one-year, three-year and since-inception (February 23, 2017) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund outperformed the Custom Invesco Moderately Conservative Allocation ETF Index for each period and underperformed the S&P 500® Index for each period. The Board also noted that the Fund ranked in the 1st quartile of its Lipper peer group for each period.

The Trustees reviewed information on the performance of Invesco Real Assets ESG ETF, its benchmark index (S&P U.S. Canada & Mexico Real Assets Equity Index-GR) and the Fund’s Lipper peer group rankings for the one-year and since-inception (December 22, 2020) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund underperformed its benchmark for each period. The Board also noted that the Fund ranked in the 1st quartile of its Lipper peer group for each period.

The Trustees reviewed information on the performance of Invesco Select Growth ETF, its benchmark index (Russell 1000® Growth Index) and the Fund’s Lipper peer group rankings for the one-year and since-inception (December 22, 2020) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund underperformed its benchmark for each period. The Board also noted that the Fund ranked in the 2nd quartile of its Lipper peer group for each period.

The Trustees reviewed information on the performance of Invesco S&P 500® Downside Hedged ETF, its benchmark indexes (S&P 500® Dynamic VEQTOR Index, S&P 500® Index and U.S. 3-Month Treasury Bill Index) and the Fund’s Lipper peer group rankings for the one-year, three-year, five-year and since-inception (December 6, 2012) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund underperformed the S&P 500® Dynamic VEQTOR Index and

 

  34  

 

 

 

 


 

Approval of Investment Advisory and Sub-Advisory Contracts–(continued)

 

the S&P 500® Index for each period and outperformed the U.S. 3 Month Treasury Bill Index for each period. The Board also noted that the Fund ranked in the 1st quartile of its Lipper peer group for each period.

The Trustees reviewed information on the performance of Invesco Total Return Bond ETF, its benchmark index (Bloomberg U.S. Aggregate Bond Index) and the Fund’s Lipper peer group rankings for the one-year, three-year, five-year and since-inception (February 10, 2016) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund outperformed its benchmark for each period. The Board also noted that the Fund ranked in the 1st quartile of its Lipper peer group for each period. The Trustees considered that the Fund was created in connection with the purchase by Invesco of the ETFs business of Guggenheim Capital LLC (“Guggenheim”) (the “Transaction”) and that the Fund’s performance prior to the closing of the Transaction on April 6, 2018 is that of its predecessor Guggenheim ETF.

The Trustees reviewed information on the performance of Invesco US Large Cap Core ESG ETF, its benchmark index (S&P 500® Index) and the Fund’s Lipper peer group rankings for the one-year and since-inception (December 22, 2020) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund underperformed its benchmark for each period. The Board also noted that the Fund ranked in the 2nd quartile of its Lipper peer group for each period.

The Trustees reviewed information on the performance of Invesco Variable Rate Investment Grade ETF, its benchmark index (Bloomberg US Floating Rate Note Index) and the Fund’s Lipper peer group rankings for the one-year, three-year, five-year and since-inception (September 22, 2016) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund outperformed its benchmark for each period. The Board also noted that the Fund ranked in the 1st quartile of its Lipper peer group for each period.

The Trustees reviewed information on the performance of Invesco High Yield Bond Factor ETF, its benchmark index (Bloomberg US Corporate High Yield 2% Issuer Cap Index) and the Fund’s Lipper peer group rankings for the one-year and since-inception (December 2, 2020) periods ended December 31, 2021. Based on the information provided, the Board noted that the Fund underperformed its benchmark for each period. The Board also noted that the Fund ranked in the 3rd quartile of its Lipper peer group for each period.

The Trustees did not review the performance of Invesco Corporate Bond Factor ETF, Invesco Intermediate Bond Factor ETF, Invesco Multi-Sector Bond Income Factor ETF and Invesco Short-Term Bond Factor ETF because those Funds had not commenced operations as of December 31, 2021.

The Trustees considered the services provided by the Adviser in its oversight of the Funds’ administrator, custodian, transfer agent and, for all Funds except Invesco S&P 500® Downside Hedged ETF, the Sub-Advisers. The Trustees noted the significant amount of time, effort and resources that had been devoted to this oversight function.

Based on their review, the Trustees concluded that the nature, extent and quality of services provided or to be provided by the Adviser to the Funds under the Investment Advisory Agreement were or were expected to be appropriate and reasonable.

Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Fund’s net expense ratio and unitary advisory fee. The Trustees noted that the annual advisory fee charged to each Fund, as set forth below, is a unitary advisory fee and that the Adviser pays all other operating expenses of each Fund, including the fees payable to the Sub-Advisers, except that each Fund pays its brokerage expenses, taxes, interest, acquired fund fees and expenses, if any, litigation expenses, costs incurred in connection with proxies (except certain proxies) and other extraordinary expenses:

 

   

0.05% of the Fund’s average daily net assets for Invesco Balanced Multi-Asset Allocation ETF, Invesco Conservative Multi-Asset Allocation ETF, Invesco Growth Multi-Asset Allocation ETF and Invesco Moderately Conservative Multi-Asset Allocation ETF;

 

   

0.22% of the Fund’s average daily net assets for Invesco Corporate Bond Factor ETF;

 

   

0.27% of the Fund’s average daily net assets for Invesco Intermediate Bond Factor and Invesco Short-Term Bond Factor ETF;

 

   

0.30% of the Fund’s average daily net assets for Invesco Variable Rate Investment Grade ETF;

 

   

0.35% of the Fund’s average daily net assets for Invesco Active U.S. Real Estate ETF;

 

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Approval of Investment Advisory and Sub-Advisory Contracts—(continued)

 

   

0.39% of the Fund’s average daily net assets for Invesco S&P 500® Downside Hedged ETF, Invesco High Yield Bond Factor ETF and Invesco Multi-Sector Bond Income Factor ETF;

 

   

0.48% of the Fund’s average daily net assets for Invesco Select Growth ETF and Invesco US Large Cap Core ESG ETF;

 

   

0.50% of the Fund’s average daily net assets for Invesco Total Return Bond ETF; and

 

   

0.59% of the Fund’s average daily net assets for Invesco Focused Discovery Growth ETF and Invesco Real Assets ESG ETF.

The Trustees compared each Fund’s net expense ratio to information compiled by the Adviser from Lipper databases on the net expense ratios of comparable ETFs, open-end (non-ETF) index funds and open-end (non-ETF) actively-managed funds, as applicable. The Trustees noted that the net expense ratios for certain Funds were equal to or lower than the median net expense ratios of their ETF peers, open-end index peer funds and open-end actively-managed peer funds, as applicable, as illustrated in the table below.

 

Invesco Fund

  Equal
to/Lower
than ETF
Peer
Median*
   Equal to/Lower
than Open-
End

Index Fund
Peer Median*
   Lower than
Open-End
Active Fund
Peer Median
Invesco Active U.S. Real Estate ETF   N/A       X
Invesco Balanced Multi-Asset Allocation ETF   N/A    N/A    X
Invesco Conservative Multi-Asset Allocation ETF   N/A    N/A    X
Invesco Focused Discovery Growth ETF       X       X
Invesco Growth Multi-Asset Allocation ETF   N/A    N/A    X
Invesco Moderately Conservative Multi-Asset Allocation ETF   N/A    N/A    X
Invesco Real Assets ESG ETF   N/A    N/A    X
Invesco S&P 500® Downside Hedged ETF       X    N/A    X
Invesco Select Growth ETF       X        X    X
Invesco Total Return Bond ETF        
Invesco US Large Cap Core ESG ETF       X       X
Invesco Variable Rate Investment Grade ETF        
Invesco High Yield Bond Factor ETF       X        X    X
Invesco Corporate Bond Factor ETF       X       X
Invesco Intermediate Bond Factor ETF       X       X
Invesco Multi-Sector Bond Income Factor ETF       X    N/A    X
Invesco Short-Term Bond Factor ETF       X       X

 

*

The information provided by the Adviser indicated that certain Funds did not have any comparable open-end index fund peers. Those Funds have been designated in this column with an “N/A” for not available.

In response to questions from the Independent Trustees, the Adviser provided supplemental information regarding the Invesco Total Return Bond ETF’s advisory fee and total expenses and the Lipper peer data. The Adviser explained its view that the advisory fee and total expenses for the Fund are competitive and generally in line with other comparable funds in the marketplace, particularly in light of the level and nature of services provided and the investment management style of the Adviser. The Trustees also considered the Adviser’s statements regarding its pricing philosophy and the differing pricing philosophy of certain of the peers.

The Trustees noted information, including fee information, provided by the Adviser regarding other investment products to which it provides investment advisory services, noting that the Adviser indicated that none of the other investment products have investment strategies comparable to the Funds. The Trustees considered the Adviser’s explanation of the differences between the services provided or to be provided to the Funds and to the other investment products it advises, noting the Adviser’s statement that the management and oversight of the Funds requires substantially more labor and expense.

Based on all of the information provided, the Board concluded that the unitary advisory fee charged or to be charged to each Fund was reasonable and appropriate in light of the services provided or to be provided, the distinguishing factors of the Funds, and the administrative, operational and management oversight costs for the Adviser.

 

  36  

 

 

 

 


 

Approval of Investment Advisory and Sub-Advisory Contracts–(continued)

 

In conjunction with their review of the unitary advisory fees, the Trustees considered information provided by the Adviser on the revenues received by the Adviser under the Investment Advisory Agreement for the Funds. The Trustees reviewed information provided by the Adviser on its overall profitability, as well as the estimated profitability to the Adviser from its relationship to each Fund. (The Trustees did not consider the revenues received by the Adviser under the Investment Advisory Agreement or the estimated profitability of the Adviser in managing Invesco Corporate Bond Factor ETF, Invesco Intermediate Bond Factor ETF, Invesco Multi-Sector Bond Income Factor ETF and Invesco Short-Term Bond Factor ETF because the Funds had not yet commenced operations as of December 31, 2021.) The Trustees concluded that the overall and estimated profitability to the Adviser was not unreasonable.

Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. The Trustees reviewed the information provided by the Adviser as to the extent to which economies of scale may be realized as each Fund grows and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees reviewed each Fund’s asset size and unitary advisory fee. The Trustees noted that any reduction in fixed costs associated with the management of the Funds would be enjoyed by the Adviser, but a unitary advisory fee provides a level of certainty in expenses for the Funds. The Trustees considered whether the unitary advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund and concluded that the unitary advisory fee was reasonable and appropriate.

Fall-out Benefits. The Trustees considered that the Adviser identified no additional benefits it receives from its relationship with the Funds, and noted that the Adviser does not have any soft-dollar arrangements. The Trustees also considered benefits received by affiliates of the Adviser that may be directly or indirectly attributed to the Adviser’s relationship with the Funds, including brokerage fees, advisory fees for money market cash management vehicles and fees as the Funds’ direct securities lending agent. The Trustees also considered that Invesco Distributors, Inc., an affiliate of the Adviser, serves as each Fund’s distributor and is paid a distribution fee by the Adviser. The Board concluded that each Fund’s unitary advisory fee was reasonable, taking into account any ancillary benefits received by affiliates of the Adviser.

Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Investment Advisory Agreement for each Fund. No single factor was determinative in the Board’s analysis.

Investment Sub-Advisory Agreement

As noted above, the Board of Trustees of the Trust, including the Independent Trustees, approved the continuation of the Sub-Advisory Agreement for each of Invesco Active U.S. Real Estate ETF, Invesco Balanced Multi-Asset Allocation ETF, Invesco Conservative Multi-Asset Allocation ETF, Invesco Focused Discovery Growth ETF, Invesco Growth Multi-Asset Allocation ETF, Invesco Moderately Conservative Multi-Asset Allocation ETF, Invesco Real Assets ESG ETF, Invesco Select Growth ETF, Invesco Total Return Bond ETF, Invesco US Large Cap Core ESG ETF, Invesco Variable Rate Investment Grade ETF, Invesco High Yield Bond Factor ETF, Invesco Corporate Bond Factor ETF, Invesco Intermediate Bond Factor ETF, Invesco Multi-Sector Bond Income Factor ETF and Invesco Short-Term Bond Factor ETF (each such Fund, a “Sub-Advised Fund” and collectively, the “Sub-Advised Funds”) at a meeting held on April 6, 2022. The review process followed by the Board is described in detail above. In connection with the review of the Sub-Advisory Agreement, the Board considered the factors described below, among others.

Nature, Extent and Quality of Services. The Trustees considered the nature, extent and quality of services provided or to be provided to each Sub-Advised Fund under the Sub-Advisory Agreement. The Board reviewed the qualifications and background of each Sub-Adviser, the services provided or to be provided by each Sub-Adviser, the investment approach of the Sub-Adviser whose investment personnel manage Invesco Active U.S. Real Estate ETF’s, Invesco Balanced Multi-Asset Allocation ETF’s, Invesco Conservative Multi-Asset Allocation ETF’s, Invesco Focused Discovery Growth ETF’s, Invesco Growth Multi-Asset Allocation ETF’s, Invesco Moderately Conservative Multi-Asset Allocation ETF’s, Invesco Real Assets ESG ETF’s, Invesco Select Growth ETF’s, Invesco Total Return Bond ETF’s, Invesco US Large Cap Core ESG ETF’s, Invesco Variable Rate Investment Grade ETF’s and Invesco High Yield Bond Factor ETF’s assets, the experience and skills of the investment personnel responsible for the day-to-day management of such Sub-Advised Funds, and the resources made available to such personnel.

Based on their review, the Trustees concluded that the nature, extent and quality of services provided or to be provided by the Sub-Advisers to each Sub-Advised Fund under the Sub-Advisory Agreement were appropriate and reasonable.

 

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Approval of Investment Advisory and Sub-Advisory Contracts–(continued)

 

Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser and the Sub-Advisers on the sub-advisory fee rates under the Sub-Advisory Agreement. The Trustees noted that the sub-advisory fees charged by the Sub-Advisers under the Sub-Advisory Agreement are consistent with the compensation structure used throughout Invesco when Invesco’s affiliates provide sub-advisory services for funds managed by other Invesco affiliates. The Board considered how the sub-advisory fees relate to the overall advisory fee for each Sub-Advised Fund and noted that the Adviser compensates the Sub-Advisers from its fee.

The Trustees reviewed the financial statements provided by Invesco Advisers, Inc. in connection with the April 6, 2022 meeting, and they noted the net income generated by the firm. The Trustees noted that the Adviser compensates the Sub-Adviser from its fee and that the Adviser provided profitability information with respect to Invesco Active U.S. Real Estate ETF, Invesco Balanced Multi-Asset Allocation ETF, Invesco Conservative Multi-Asset Allocation ETF, Invesco Focused Discovery Growth ETF, Invesco Growth Multi-Asset Allocation ETF, Invesco Moderately Conservative Multi-Asset Allocation ETF, Invesco Real Assets ESG ETF, Invesco Select Growth ETF, Invesco Total Return Bond ETF, Invesco US Large Cap Core ESG ETF, Invesco Variable Rate Investment Grade ETF and Invesco High Yield Bond Factor ETF.

Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. As part of their review of the Investment Advisory Agreement for each Sub-Advised Fund, the Trustees considered the extent to which economies of scale may be realized as the Sub-Advised Funds grow and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees considered whether the sub-advisory fee rates for each Sub-Advised Fund were reasonable in relation to the asset size (if any) of the Sub-Advised Funds and concluded that the flat sub-advisory fee rates were reasonable and appropriate.

Fall-out Benefits. The Trustees noted that Invesco Advisers, Inc. receives management fees from money market funds into which the Funds’ and other Invesco ETFs’ excess cash and securities lending collateral may be invested, and that the Adviser waives its fees with respect to each Fund in an amount equal to the fees received by Invesco Advisers, Inc. on the Fund’s excess cash invested in the money market funds. The Trustees also noted the fees received by Invesco Advisers, Inc. in its capacity as the direct securities lending agent for the Invesco ETFs. The Trustees considered that Invesco Advisers, Inc. may participate in soft-dollar arrangements for certain Funds, but that the Sub-Advisers generally do not use or generate soft-dollars with respect to the Sub-Advised Funds. The Trustees noted that the Sub-Advisers had not identified any further benefits that they derived from their relationships with the Sub-Advised Funds. The Board concluded that the sub-advisory fee with respect to each Sub-Advised Fund was reasonable, taking into account any ancillary benefits received by the Sub-Advisers.

Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Sub-Advisory Agreement for each Sub-Advised Fund. No single factor was determinative in the Board’s analysis.

 

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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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