Prospectus
Invesco
Actively Managed Exchange-Traded Fund Trust
| | Invesco Active U.S. Real Estate ETF | NYSE Arca, Inc. |
The
U.S. Securities and Exchange Commission (“SEC”) has not approved or disapproved these securities or passed upon the accuracy
or adequacy of this prospectus. Any representation
to the contrary is a criminal offense.
The
Invesco Active U.S. Real Estate ETF (the “Fund”) seeks to achieve high total return through growth of capital and current
income.
This
table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and
example below.
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Management
Fees |
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Other
Expenses |
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Total
Annual Fund Operating Expenses |
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The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all of your Shares at the end of those periods. The example
also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. This example does
not include brokerage commissions that investors may pay to buy and sell Shares. Although your actual costs may be higher or lower, your
costs, based on these assumptions, would be:
|
1
Year |
3
Years |
5
Years |
10
Years |
| $ |
$ |
$ |
$ |
The
Fund is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing, under normal market conditions,
at least 80% of its assets in securities of companies that are principally engaged in the U.S. real estate industry and included within
the FTSE NAREIT All Equity REITs Index. The Fund considers a company to be principally engaged in the U.S. real estate industry if it:
(i) derives 50% of its revenues or profits from the ownership, leasing, management, construction, financing or sale of U.S. real estate;
or (ii) has at least 50% of the value of its assets invested in U.S. real estate. The Fund plans to invest principally in equity real
estate investment trusts (“REITs”). Equity REITs pool investors’ funds for investments primarily in real estate properties
or real estate-related loans (such as mortgages). The Fund also may invest in real estate operating companies (“REOCs”), as
well as securities of other companies principally engaged in the U.S. real estate industry. REOCs are similar to REITs, except that REOCs
reinvest their earnings into the business, rather than distributing them to unitholders like REITs.
The
Fund structures and selects its investments primarily from a universe
of securities that are included within the FTSE NAREIT All Equity REITs Index at the time of purchase. In constructing the portfolio,
Invesco Advisers, Inc., the Fund’s sub-adviser (the “Sub-Adviser”), analyzes quantitative and statistical metrics to
identify attractively priced securities.
As
part of the Fund’s investment process to implement its investment strategy
in pursuit of its investment objective, the Sub-Adviser may also consider both qualitative and quantitative environmental, social and
governance (“ESG”) factors it believes to be material to understanding an issuer’s fundamentals, assess whether any
ESG factors pose a material financial risk or opportunity to the issuer and determine whether such risks are appropriately reflected in
the issuer's valuation. This analysis may involve the use of third-party research as well as proprietary research. Consideration of ESG
factors is just one component of the Sub-Adviser's assessment of issuers eligible for investment and not necessarily determinative to
an investment decision. Therefore, the Sub-Adviser may still invest in securities of issuers that may be viewed as having a high ESG risk
profile. The ESG factors considered by the Sub-Adviser may change over time, one or more factors may not be relevant with respect to all
issuers eligible for investment and ESG considerations may not be applied to all issuers or investments in the Fund.
The
Sub-Adviser will consider selling or reducing a security position if: (i)
its relative valuation has fallen below desired levels; (ii) its risk/return profile has changed significantly; (iii) its fundamentals
have changed; or (iv) a more attractive investment opportunity is identified. The Sub-Adviser generally conducts the security and portfolio
evaluation process monthly.
Concentration
Policy. The Fund will concentrate its investments (i.e., invest
25% or more of the value of its total assets) in securities of companies that are principally engaged in the U.S. real estate industry.
The
following summarizes the principal risks of investing in the Fund.
Market
Risk. Securities held by the Fund are subject to market fluctuations.
You should anticipate that the value of the Shares will decline, more or less, in correlation with any decline in value of the securities
in the Fund’s portfolio. Additionally, natural or environmental disasters, widespread disease or other public health issues, war,
military conflict, acts of terrorism, economic
crisis or other events could result in increased premiums or discounts to the Fund’s net asset value (“NAV”).
Management
Risk. The Fund is subject to management risk because it is an actively
managed portfolio. In managing the Fund’s portfolio holdings, the Sub-Adviser applies investment techniques and risk analyses in
making investment decisions for the Fund, but there can be no guarantee that these actions will produce the desired results.
Industry
Concentration Risk. The Fund concentrates in securities of companies
in the real estate industry. By concentrating its investments in an industry or industry group, the Fund faces more risks than if it were
diversified broadly over numerous industries or industry groups. Such industry-based risks, any of which may adversely affect the companies
in which the Fund invests, may include, but are not limited to, the following: general economic conditions or cyclical market patterns
that could negatively affect supply and demand in a particular industry; competition for resources, adverse labor relations, political
or world events; obsolescence of technologies; and increased competition or new product introductions that may affect the profitability
or viability of companies in an industry. In addition, at times, an industry or industry group may be out of favor and underperform other
industries or the market as a whole.
Real
Estate Sector Risk. The real estate sector contains companies operating
in real estate development and operation, as well as companies related to the real estate sector, including REITs. Investments in securities
of these companies are subject to risks such as: fluctuations in the value of the underlying properties; defaults by
1
borrowers
or tenants; market saturation; changes in general and local economic conditions; decreases in market rates for rents; changes in the availability,
cost and terms of mortgage funds; increased competition, property taxes, capital expenditures, or operating expenses; and other economic,
political or regulatory occurrences, including the impact of changes in environmental laws. The real estate sector is particularly sensitive
to economic downturns and changes to interest rates.
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.
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 the 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.
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.
ESG
Considerations Risk. The ESG considerations that may be assessed
as part of the investment process to implement the Fund’s investment strategy in pursuit of its investment objective may vary across
types of eligible investments and issuers, and not every ESG factor may be identified or evaluated for every investment, and not every
investment or issuer may be evaluated for ESG considerations. The Fund’s portfolio will not be solely based on ESG considerations,
and therefore the issuers in which the Fund invests may not be considered ESG-focused issuers. The incorporation of ESG factors may affect
the Fund’s exposure to certain issuers or industries and may not work as intended. The Fund may underperform other funds that do
not assess an issuer’s ESG factors or that use a different methodology to identify and/or incorporate ESG factors. Information used
by the Fund to evaluate such factors may not be readily available, complete or accurate, and may vary across providers and issuers as
ESG is not a
uniformly
defined characteristic. There is no guarantee that the evaluation of ESG considerations will be additive to the Fund’s performance.
Issuer-Specific
Changes Risk. The value of an individual security or particular
type of security may be more volatile than the market as a whole and may perform differently from the value of the market as a whole.
Authorized
Participant Concentration Risk. Only authorized participants (“APs”)
may engage in creation or redemption transactions directly with the Fund. The 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 the 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 the Fund and no other AP is able
to step forward to create or redeem Creation Units (as defined below), this may result in a significantly diminished trading market for
Shares, and Shares may be more likely to trade at a premium or discount to the Fund's NAV and to face trading halts and/or delisting.
Investments in non-U.S. securities, which may have lower trading volumes
or could experience extended market closures or trading halts,
may increase the risk that APs may not be able to effectively create or redeem Creation Units or the risk that the Shares may be halted
and/or delisted.
Market
Trading Risk. The Fund faces numerous market trading risks, including
the potential lack of an active market for the Shares, losses from trading in secondary markets, and disruption in the creation/redemption
process of the Fund. In stressed market conditions, the market for Shares may become less liquid in response to deteriorating liquidity
in the markets for the Fund’s portfolio holdings, which may cause a variance in the market price of Shares and their underlying
NAV. In addition, an exchange or market may issue trading halts on specific securities or financial instruments. As a result, the ability
to trade certain securities or financial instruments may be restricted, which may disrupt the Fund’s creation/redemption process,
potentially affect the price at which Shares trade in the secondary market, and/or result in the Fund being unable to trade certain securities
or financial instruments at all. In these circumstances, the Fund may be unable to rebalance its portfolio, may be unable to accurately
price its investments and/or may incur substantial trading losses. Any of these factors may lead to the Shares trading at a premium or
discount to the Fund's NAV.
Operational
Risk. The Fund is exposed to operational risks arising from a number
of factors, including, but not limited to, human error, processing and communication errors, errors of the Fund’s service providers,
counterparties or other third parties, failed or inadequate processes and technology or systems failures. The Fund,
its investment adviser, Invesco Capital Management LLC (the “Adviser”),
and the Sub-Adviser seek to reduce these operational risks through controls and procedures. However, these measures do not address every
possible risk and may be inadequate to address these risks.
Shares
May Trade at Prices Different than NAV. Shares trade on a stock
exchange at prices at, above or below the Fund’s most recent NAV. The Fund’s NAV is calculated at the end of each business
day and fluctuates with changes in the market value of the Fund’s holdings. The trading price of the Shares fluctuates continuously
throughout trading hours on the exchange, based on both the relative market supply of, and demand for, the Shares and the underlying value
of the Fund’s portfolio holdings. As a result, the trading prices of the Shares may deviate from the Fund’s NAV. ANY OF THESE
FACTORS, AMONG OTHERS, MAY LEAD TO THE SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV.
The
bar chart below shows how the Fund has performed. The table below the bar chart shows the Fund’s average annual total returns (before
and
2
after
taxes). The bar chart and table provide
an indication of the risks of investing in the Fund by showing how the Fund’s total returns have varied from year to year and by
showing how the Fund’s average annual total returns compared with a broad measure of market performance.
Although
the information shown in the bar chart and the table gives you some idea of the risks involved in investing in the Fund, the Fund’s
past performance (before and after taxes) is not necessarily indicative of how the Fund will perform in the future.
Updated
performance information is available online at www.invesco.com/ETFs .
| | Period Ended | Returns |
Best Quarter | | |
Worst Quarter | | - |
Average Annual Total Returns (for the periods ended December 31, 2022)
| | Inception Date | 1 Year | 5 Years | 10 Years |
| Return Before Taxes | | - | | |
| Return After Taxes on Distributions | | - | | |
| Return After Taxes on Distributions and Sale of Fund Shares | | - | | |
| | ||||
| FTSE NAREIT All Equity REITs Index deduction for fees, expenses or taxes) | | - | | |
| | ||||
Management
of the Fund
Investment
Adviser. Invesco Capital Management LLC (the “Adviser”).
Investment
Sub-Adviser. Invesco Advisers, Inc. (the “Sub-Adviser”).
Portfolio
Managers
The
following individuals are responsible jointly and primarily for the day-to-day management of the Fund’s portfolio:
| Name | Title with Sub-Adviser | Date Began Managing the Fund |
| Grant Jackson | Portfolio Manager of the Sub-Adviser | March 2018 |
| | ||
| Chip McKinley | Portfolio Manager of the Sub-Adviser | January 2022 |
| | ||
| Darin Turner | Portfolio Manager of the Sub-Adviser | February 2015 |
| | ||
| Ping-Ying Wang | Portfolio Manager of the Sub-Adviser | November 2008 |
Purchase
and Sale of Shares
The
Fund issues and redeems Shares at NAV only with APs and only in large blocks of 10,000 Shares (each block of Shares is called a “Creation
Unit”) or multiples thereof (“Creation Unit Aggregations”), generally in exchange for the deposit or delivery of a basket
of securities. However, the Fund also
reserves
the right to permit or require Creation Units to be issued in exchange for cash. Except when aggregated in Creation Units, the Shares
are not redeemable securities of the Fund.
Individual
Shares may only be bought and sold in the secondary market (i.e.,
on a national securities exchange) through a broker or dealer at a market price. Because the Shares trade at market prices rather than
NAV, Shares may trade at a price greater than NAV (at a premium), at NAV, or less than NAV (at a discount). An investor may incur costs
attributable to the difference between the highest price a buyer is willing to pay to purchase Shares (bid) and the lowest price a seller
is willing to accept for Shares (ask) when buying or selling shares in the secondary market (the “bid-ask spread”).
Recent
information, including information on the Fund’s NAV, market price,
premiums and discounts, and bid-ask spreads, is available online at www.invesco.com/ETFs.
Tax
Information
The
Fund’s distributions generally are taxed as ordinary income, capital gains or some combination of both, unless you are investing
through a tax-advantaged arrangement, such as a 401(k) plan or an individual retirement account, in which case your distributions may
be taxed as ordinary income when withdrawn from such account.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund’s distributor or its related
companies may pay the intermediary for certain Fund-related activities, including those that are designed to make the intermediary more
knowledgeable about exchange-traded products, such as the Fund, as well as for marketing, education or other initiatives related to the
sale or promotion of Shares. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and
your salesperson or financial adviser to recommend the Fund over another investment. Ask your salesperson or financial adviser or visit
your financial intermediary’s website for more information.
Additional Information About the Fund’s Strategies and Risks
Principal
Investment Strategies
The
Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in securities
of companies that are principally engaged in the U.S. real estate industry and included within the FTSE NAREIT All Equity REITs Index.
The Fund considers a company to be principally engaged in the U.S. real estate industry if it: (i) derives 50% of its revenues or profits
from the ownership, leasing, management, construction, financing or sale of U.S. real estate; or (ii) has at least 50% of the value of
its assets invested in U.S. real estate. The Fund plans to invest principally in REITs. Equity REITs pool investors’ funds for investments
primarily in real estate properties or real estate-related loans (such as mortgages). The Fund also may invest in REOCs, as well as securities
of other companies principally engaged in the U.S. real estate industry. REOCs are similar to REITs, except that REOCs reinvest their
earnings into the business, rather than distributing them to unitholders like REITs.
The
Fund structures and selects its investments primarily from a universe
of securities that are included within the FTSE NAREIT All Equity REITs Index at the time of purchase. In constructing the portfolio,
the Sub-Adviser analyzes quantitative and statistical metrics to identify attractively priced securities.
As
part of the Fund’s investment process to implement its investment strategy
in pursuit of its investment objective, the Sub-Adviser may also
3
consider
both qualitative and quantitative ESG factors it believes to be material to understanding an issuer’s fundamentals, assess whether
any ESG factors pose a material financial risk or opportunity to the issuer and determine whether such risks are appropriately reflected
in the issuer's valuation. This analysis may involve the use of third-party research as well as proprietary research. Consideration of
ESG factors is just one component of the Sub-Adviser's assessment of issuers eligible for investment and not necessarily determinative
to an investment decision. Therefore, the Sub-Adviser may still invest in securities of issuers that may be viewed as having a high ESG
risk profile. The ESG factors considered by the Sub-Adviser may change over time, one or more factors may not be relevant with respect
to all issuers eligible for investment and ESG considerations may not be applied to all issuers or investments in the Fund.
The
Sub-Adviser will consider selling or reducing a security position
if: (i) its relative valuation has fallen below desired levels; (ii) its risk/return profile has changed significantly; (iii) its fundamentals
have changed; or (iv) a more attractive investment opportunity is identified. The Sub-Adviser generally conducts the security and portfolio
evaluation process monthly.
Temporary
Defensive Strategies
The
Fund may take a temporary defensive position and hold all or a portion of its assets in cash or cash equivalents and money market funds
(including affiliated money market funds) if there are inadequate investment opportunities available due to adverse market, economic,
political or other conditions, or atypical circumstances such as unusually large cash inflows or redemptions. Doing so could help the
Fund avoid losses in the event of falling market prices and provide liquidity to make additional investments, but may mean lost investment
opportunities in a period of rising market prices. During these periods, the Fund may not achieve its investment objective.
Principal
Risks of Investing in the Fund
The
following provides additional information regarding certain of the principal risks identified under “Principal Risks of Investing
in the Fund” in the Fund's “Summary Information” section. Any of the following risks may impact the Fund’s NAV
which could result in the Fund trading at a premium or discount to NAV.
Market
Risk. The Fund’s holdings are subject to market fluctuations,
and the Fund could lose money due to short-term market movements and over longer periods during market downturns. You should anticipate
that the value of Shares will decline, more or less, in correlation with any decline in value of the holdings in the Fund’s portfolio.
The value of a security may decline due to general market conditions, economic trends or events that are not specifically related to the
issuer of the security or due to factors that affect a particular industry or group of industries. During a general downturn in the securities
markets, multiple asset classes may be negatively affected. Additionally, natural or environmental disasters, widespread disease or other
public health issues, war, military conflict, acts of terrorism,
economic crisis or other events could result in increased premiums
or discounts to the Fund’s NAV.
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 health care
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 Fund’s performance.
Market
Disruption Risks Related to Russia-Ukraine Conflict.
Following Russia’s invasion of Ukraine in late February 2022,
various countries, including the United States, as well as North Atlantic Treaty Organization (“NATO”) member countries and
the European Union, issued broad-ranging economic sanctions against Russia. The war in Ukraine (and the potential for further sanctions
in response to Russia’s continued military activity) may escalate. These and other corresponding events, have had, and could continue
to have, severe negative effects on regional and global economic and financial markets, including increased volatility, reduced liquidity,
and overall uncertainty. The negative impacts may be particularly acute in certain sectors including, but not limited to, energy and financials.
Russia may take additional countermeasures or retaliatory actions (including cyberattacks), which could exacerbate negative consequences
on global financial markets. The duration of the conflict and corresponding sanctions and related events cannot be predicted. The foregoing
may result in a negative impact on Fund performance and the value of an investment in the Fund, even beyond any direct investment exposure
the Fund may have to Russian issuers or the adjoining geographic regions.
Management
Risk. The Fund is subject to management risk because it is an actively
managed portfolio. In managing the Fund’s portfolio holdings, the Sub-Adviser applies investment techniques and risk analyses in
making investment decisions for the Fund, but there can be no guarantee that these actions will produce the desired results.
Industry
Concentration Risk. The Fund concentrates in securities of companies
in the real estate industry. By concentrating its investments in an industry or industry group, the Fund faces more risks than if it were
diversified broadly over numerous industries or industry groups. Such industry-based risks, any of which may adversely affect the companies
in which the Fund invests, may include, but are not limited to, the following: general economic conditions or cyclical market patterns
that could negatively affect supply and demand in a particular industry; competition for resources, adverse labor relations, political
or world events; obsolescence of technologies; and increased competition or new product introductions that may affect the profitability
or viability of companies in an industry. In addition, at times, an industry or industry group may be out of favor and underperform other
industries or the market as a whole. Information about the Fund’s exposure to a particular industry or industry group is available
in the Fund’s Annual and Semi-Annual Reports to Shareholders, as well as on required forms filed with the SEC.
Real
Estate Sector Risk. The risks associated with investments in securities
issued by companies in the real estate sector and companies related to the real estate sector, including REITs, consist of: fluctuations
in the value of the underlying properties; defaults by borrowers or tenants; market saturation; changes in general and local economic
conditions; decreases in market rates for rents; changes in the availability, cost and terms of mortgage funds; increases in competition,
property taxes, capital expenditures, or operating expenses; and other economic, political or regulatory occurrences, including the impact
of changes in environmental laws.
The
real estate sector has historically been cyclical and particularly sensitive
to economic downturns. Many real estate companies utilize leverage, which increases investment risk and could adversely affect a company’s
operations and market value in periods of rising interest rates.
REIT
Risk. The REITs in which the Fund may invest will be subject to
risks inherent in the direct ownership of real estate. These risks include, among others: fluctuations in the value of the underlying
properties; defaults by borrowers or tenants; market saturation; changes in general and local economic conditions; decreases in market
rates for rents; changes in the availability, cost and terms of mortgage funds; increased competition, property taxes, capital expenditures,
or operating expenses; and other occurrences, including the impact of changes in environmental laws that may affect the real estate industry.
A REIT that fails to comply with federal
4
tax
requirements affecting REITs may be subject to federal income taxation, or the federal tax requirement that a REIT distribute substantially
all of its net income to its shareholders may result in a REIT having insufficient capital for future expenditures. The value of a REIT
can depend on the structure of and cash flow generated by the REIT. In addition, like mutual funds, REITs have expenses, including advisory
and administration fees, that their shareholders pay. As a result, an investor may absorb duplicate levels of fees when the Fund invests
in REITs. In addition, REITs are subject to certain provisions under federal tax law. The failure of a company to qualify as a REIT could
have adverse consequences for the Fund, including significantly reducing the return to the Fund on its investment in such company. Mortgage
REITs lend money to developers and owners of properties and invest primarily in mortgages and similar real estate interests. Mortgage
REITs receive interest payments from the owners of the mortgaged properties. Accordingly, mortgage REITs are subject to the credit risk
of the borrowers to whom they extend funds. Credit risk is the risk that the borrower will not be able to make interest and principal
payments on the loan to the REIT when they are due. Mortgage REITs also are subject to the risk that the value of mortgaged properties
may be less than the amounts owed on the properties. If a mortgage REIT is required to foreclose on a borrower, the amount recovered in
connection with the foreclosure may be less than the amount owed to the mortgage REIT. Mortgage REITs are subject to significant interest
rate risk. During periods when interest rates are declining, mortgages are often refinanced or prepaid. Refinancing or prepayment of mortgages
may reduce the yield of mortgage REITs. When interest rates decline, however, the value of a REIT’s investment in fixed rate obligations
can be expected to rise. Conversely, when interest rates rise, the value of a REIT’s investment in fixed rate obligations can be
expected to decline. In addition, rising interest rates generally increase the costs of obtaining financing, which could cause the value
of a mortgage REIT’s investments to decline. A REIT’s investment in adjustable rate obligations may react differently to interest
rate changes than an investment in fixed rate obligations. As interest rates on adjustable rate mortgage loans are reset periodically,
yields on a REIT’s investment in such loans will gradually align themselves to reflect changes in market interest rates, causing
the value of such investments to fluctuate less dramatically in response to interest rate fluctuations than would investments in fixed
rate obligations.
Mortgage
REITs typically use leverage (and in many cases, may be highly
leveraged), which increases investment risk and could adversely affect a REIT’s operations and market value in periods of rising
interest rates, increased interest rate volatility, downturns in the economy and reductions in the availability of financing or deterioration
in the conditions of the REIT’s mortgage-related assets.
Equity
Risk. Equity risk is the risk that the value of equity securities,
including common stocks, will fall. The value of an equity security may fall due to changes in general economic conditions that impact
the market as a whole and that are relatively unrelated to an issuer or its industry. These conditions include changes in interest rates,
specific periods of overall market turbulence or instability, or general and prolonged periods of economic decline and cyclical change.
An issuer's common stock in particular may be especially sensitive to, and more adversely affected by, these general movements in the
stock market; it is possible that a drop in the stock market may depress the price of most or all of the common stocks that the Fund holds.
In
addition, equity risk includes the risk that investor sentiment toward, and
perceptions regarding, one or more particular industries or economic sectors 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 or sectors more broadly.
Price changes of equity securities may occur in a particular region, industry, or sector of the market, and as a result, the value of
an issuer's common stock may fall solely because of factors, such as increases in production costs, that negatively impact other companies
in the same industry or in a number of different industries.
Equity
risk also includes the financial risks of a specific company, including
that the value of the company's securities may fall as a result of factors directly relating to that company, such as decisions made by
its management or lower demand for the company's products or services. In particular, the common stock of a company may decline significantly
in price over short periods of time. For example, an adverse event, such as an unfavorable earnings report, may depress the value of common
stock; similarly, the common stock of an issuer may decline in price if the issuer fails to make anticipated dividend payments because,
among other reasons, the issuer experiences a decline in its financial condition.
Small-
and Mid-Capitalization Company Risk.
Securities of small- and mid-capitalization companies may be more
volatile and thinly traded (that is, 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. In addition, small- and mid-capitalization
companies are typically less financially stable than larger, more established companies, and they may depend on a small number of essential
personnel, making them more vulnerable to loss of personnel. Smaller capitalization companies also normally have less diverse product
lines than large capitalization companies and are more susceptible to adverse developments concerning their products. As such, small-and
mid-capitalization companies typically are more likely to be adversely affected than large capitalization companies by changes in earnings
results, business prospects, investor expectations or poor economic or market conditions.
ESG
Considerations Risk. The ESG considerations that may be assessed
as part of the investment process to implement the Fund’s investment strategy in pursuit of its investment objective may vary across
types of investments and issuers eligible for investment, and not every ESG factor may be identified or evaluated for every investment,
and not every investment or issuer may be evaluated for ESG considerations. The Fund’s portfolio will not be solely based on ESG
considerations, and therefore the issuers in which the Fund invests may not be considered ESG-focused issuers. The incorporation of ESG
factors may affect the Fund’s exposure to certain issuers or industries and may not work as intended. The Fund may underperform
other funds that do not assess an issuer’s ESG factors as part of the investment process or that use a different methodology to
identify and/or incorporate ESG factors. As investors can differ in their views regarding ESG factors, the Fund may invest in issuers
that do not reflect the views with respect to ESG of any particular investor. Information used by the Fund to evaluate such factors may
not be readily available, complete or accurate, and may vary across providers and issuers as ESG is not a uniformly defined characteristic,
which could negatively impact the Fund’s ability to accurately assess a company, which could negatively impact the Fund’s
performance. There is no guarantee that the evaluation of ESG considerations will be additive to the Fund’s performance.
Issuer-Specific
Changes Risk. The performance of the Fund depends on the performance
of individual securities to which the Fund has exposure. The value of an individual security or particular type of security may be more
volatile than the market as a whole and may perform worse than the market as a whole, causing the value of its securities to decline.
Poor performance may be caused by poor management decisions, competitive pressures, changes in technology, expiration of patent protection,
disruptions in supply, labor problems or shortages, corporate restructurings, fraudulent disclosures or other factors. Issuers may, in
times of distress or at their own discretion, decide to reduce or eliminate dividends, which may also cause their stock prices to decline.
Authorized
Participant Concentration Risk. Only APs may engage in creation
or redemption transactions directly with the Fund. The 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
5
the
Shares. The risk may be heightened to the extent that securities held by the 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 the 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 Shares, and Shares may be more likely to trade at a premium or discount
to NAV and to face trading halts and/or delisting. Investments in non-U.S. securities, which may have lower trading volumes or could experience
extended market closures or trading halts, may increase the risk that APs may not be able to effectively create or redeem Creation Units
or the risk that the Shares may be halted and/or delisted.
Market
Trading Risk. The Fund faces numerous market trading risks, including
losses from trading in secondary markets, periods of high volatility and disruption in the creation/redemption process of the Fund. Although
Shares are listed for trading on a securities exchange, there can be no assurance that an active trading market for Shares will develop
or be maintained by market makers or APs, that Shares will continue to trade on any such exchange or that Shares will continue to meet
the requirements for listing on an exchange. Any of these factors, among others, may lead to the Shares trading at a premium or discount
to the Fund’s NAV. As a result, an investor could lose money over short or long periods. Further, the Fund may experience low trading
volume and wide bid/ask spreads. Bid/ask spreads vary over time based on trading volume and market liquidity (including for the underlying
securities held by the Fund), and are generally lower if Shares have more trading volume and market liquidity and higher if Shares have
little trading volume and market liquidity.
In
stressed market conditions, the market for Shares may become less liquid
in response to deteriorating liquidity in the markets for the Fund’s portfolio holdings, which may cause a variance in the market
price of Shares and their underlying NAV. In addition, an exchange or market may issue trading halts on specific securities or financial
instruments. As a result, the ability to trade certain securities or financial instruments may be restricted, which may disrupt the Fund’s
creation/redemption process, potentially affect the price at which Shares trade in the secondary market, and/or result in the Fund being
unable to trade certain securities or financial instruments at all. In these circumstances, the Fund may be unable to rebalance its portfolio,
may be unable to accurately price its investments and/or may incur substantial trading losses.
Operational
Risk. The Fund is exposed to operational risks arising from a number
of factors, including, but not limited to, human error, processing and communication errors, errors of the Fund’s service providers,
counterparties or other third-parties, failed or inadequate processes and technology or systems failures. The Fund,
the Adviser and the Sub-Adviser seek to reduce these operational
risks through controls and procedures. However, these measures do not address every possible risk and may be inadequate to address these
risks.
Shares
May Trade at Prices Different than NAV. Shares trade on a stock
exchange at prices at, above or below the Fund’s most recent NAV. The Fund’s NAV is calculated at the end of each business
day and fluctuates with changes in the market value of the Fund’s holdings. The trading price of the Shares fluctuates continuously
throughout trading hours on the exchange, based on both the relative market supply of, and demand for, the Shares and the underlying value
of the Fund’s portfolio holdings. As a result, the trading prices of the Shares may deviate from the Fund’s NAV. ANY OF THESE
FACTORS, AMONG OTHERS, MAY LEAD TO THE SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV. The Adviser cannot predict whether the Shares will
trade below, at or above the Fund’s NAV. Exchange prices are not expected to correlate exactly with the Fund’s NAV due to
timing reasons, supply and demand imbalances and other factors. In addition, disruptions to creations and redemptions, including disruptions
at market makers, APs, or other market participants, or periods of significant market
volatility
or stress, may result in trading prices for the Shares that differ significantly from the value of the Fund’s underlying holdings,
with the result that investors may pay significantly more or receive significantly less than the underlying value of the Shares bought
or sold. This can be reflected as a spread between the bid and ask prices for the Fund quoted during the day or a premium or discount
in the closing price from the Fund’s NAV. Additionally, APs may be less willing to create or redeem the Shares if there is a lack
of an active market for such Shares or the Fund’s underlying investments, which may contribute to the Shares trading at a premium
or discount.
Unlike
conventional ETFs, the Fund is not an index fund. The Fund is actively
managed and does not seek to replicate the performance of a specified index. Index-based ETFs generally have traded at prices that closely
correspond to NAV per share. Given the high level of transparency of the Fund’s holdings, the Adviser believes that the trading
experience of the Fund should be similar to that of index-based ETFs. However, there can be no assurance as to whether and/or the extent
to which the Shares will trade at premiums or discounts to NAV.
Non-Principal
Investment Strategies
As
non-principal investment strategies, the Fund may invest in bank loans (including senior and/or mezzanine loans), convertible securities
and structured notes (notes on which the amount of principal repayment and interest payments is based on the movement of one or more specified
factors, such as the movement of a particular security or securities index) and in futures contracts, options, and options on futures
contracts.
In
accordance with the Investment Company Act of 1940, as amended (the
“1940 Act”) and rules thereunder, the Fund has adopted a policy to invest, under normal circumstances, at least 80% of the
value of its net assets, plus the amount of any borrowing for investment purposes, in real estate securities (the “80% investment
policy”).
The
Fund’s investment objective and the 80% investment policy are non-fundamental
policies that the Board of Trustees (the “Board”) of the Invesco Actively Managed Exchange-Traded Fund Trust (the “Trust”)
may change without shareholder approval upon 60 days’ prior written notice to shareholders.
The
fundamental and non-fundamental policies of the Fund are set forth in
the Fund’s Statement of Additional Information (“SAI”) under the section “Investment Restrictions.”
Borrowing
Money
The
Fund may borrow money up to the limits set forth in the Fund’s SAI under the section “Investment Restrictions.”
Securities
Lending
The
Fund may lend its portfolio securities to brokers, dealers, and other financial institutions. In connection with such loans, the Fund
receives liquid collateral equal to at least 102% (105% for international securities) of the value of the loaned portfolio securities.
This collateral is marked-to-market on a daily basis.
Additional
Risks of Investing in the Fund
The
Fund may also be subject to certain other non-principal risks associated with its investments and investment strategies. The following
provides additional non-principal risk information regarding investing in the Fund.
Cash
Transaction Risk. The Fund generally expects to make in-kind redemptions
to avoid being taxed at the fund level on gains on the distributed portfolio securities. However, from time to time, the Fund reserves
the right to effect redemptions for cash, rather than in-kind. In such circumstances, the Fund may be required to sell portfolio securities
to obtain the cash needed to distribute redemption proceeds. Therefore, the Fund may recognize a capital gain on these sales that might
not have been incurred if the Fund had made a redemption in-kind. This may decrease the tax efficiency of the Fund compared to utilizing
an in-kind redemption process.
6
Convertible
Securities Risk. A convertible security generally is a preferred
stock that may be converted within a specified period of time into common stock. Convertible securities nevertheless remain subject to
the risks of both debt securities and equity securities. As with other equity securities, the value of a convertible security tends to
increase as the price of the underlying stock goes up, and to decrease as the price of the underlying stock goes down. Declining common
stock values therefore also may cause the value of the Fund’s investments to decline. Like a debt security, a convertible security
provides a fixed-income stream and also tends to decrease in value when interest rates rise. Moreover, many convertible securities have
credit ratings that are below investment grade and are subject to the same risks as lower-rated debt securities, which are considered
to have more speculative characteristics and greater susceptibility to default or decline in market value than investment grade (or higher-rated)
securities.
Cybersecurity
Risk. With
the increased use of technologies such as the Internet to conduct business, the Fund, like all companies, may be susceptible to operational,
information security and related risks. Cybersecurity incidents
involving the Fund and its service providers (including,
without limitation, the Adviser,
the Sub-Adviser, fund accountant, custodian, transfer agent and
financial intermediaries) have the ability to cause disruptions and impact business operations, potentially resulting in financial losses,
impediments to trading, the inability of Fund shareholders to transact business, violations of applicable privacy and other laws, regulatory
fines, penalties, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs. Similar adverse
consequences could result from cybersecurity incidents affecting issuers of securities in which the Fund invests, counterparties with
which the Fund engages, governmental and other regulatory authorities, exchanges and other financial market operators, banks, brokers,
dealers, insurance companies, other financial institutions and other parties. The Fund and its shareholders could be negatively impacted
as a result.
Derivatives
Risk. The Fund may invest in derivatives, such as futures contracts,
options, and options on futures contracts, as applicable. Derivatives are financial instruments that derive their value from an underlying
asset, such as a security, index or exchange rate. Their use is a highly specialized activity that involves investment techniques and
risks different from those associated with ordinary portfolio securities transactions. Derivatives may be riskier than other types of
investments and may be more volatile, less tax efficient and less liquid than other securities.
Derivatives
may be used to create synthetic exposure to an underlying asset
or to hedge a portfolio risk. If the Fund uses derivatives to “hedge” a portfolio risk, the change in value of a derivative
may not correlate as expected with the underlying asset being hedged, and it is possible that the hedge therefore may not succeed. In
addition, given their complexity, derivatives may be difficult to value.
Derivatives
are subject to a number of risks including credit risk, interest
rate risk, and market risk. Credit risk refers to the possibility that a counterparty will be unable and/or unwilling to perform under
the agreement. Interest rate risk refers to fluctuations in the value of an asset resulting from changes in the general level of interest
rates. Over-the-counter (“OTC”) derivatives are also subject to counterparty risk (sometimes referred to as “default
risk”), which is the risk that the other party to the contract will not fulfill its contractual obligations.
Derivatives
may be especially sensitive to changes in economic and market conditions,
and their use may give rise to a form of leverage. Leverage may cause the portfolio of the Fund to be more volatile than if the portfolio
had not been leveraged because leverage can exaggerate the effect of any increase or decrease in the value of securities and other instruments
held by the Fund. For some derivatives, such leverage could result in losses that exceed the original amount invested in the derivative.
The Fund’s use of derivatives may be limited by the requirements for taxation of the Fund as a regulated investment company, as
well as by regulatory changes.
Natural
Disaster/Epidemic Risk. Natural or environmental disasters, such
as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather-related phenomena generally, and widespread disease, including
pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors,
industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value
of the Fund’s investments. Additionally, if a sector or sectors in which the Fund is concentrated is negatively impacted to a greater
extent by such events, the Fund may experience heightened volatility. Given the increasing interdependence among global economies and
markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange
rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s
investments.
Large
Shareholder Risk. Certain shareholders, including a third party
investor, the Adviser or an affiliate of the Adviser, an AP, a lead market maker, or another entity, may from time to time own a substantial
amount of Shares or may invest in the Fund and hold its investment for a limited period of time solely to facilitate the commencement
of the Fund or to facilitate the Fund achieving a specified size or scale. There can be no assurance that any large shareholder would
not redeem its investment. Dispositions of a large number of Shares by these shareholders may adversely affect the Fund’s liquidity
and net assets to the extent such transactions are executed directly with the Fund in the form of redemptions through an AP, rather than
executed in the secondary market. These redemptions may also force the Fund to sell portfolio securities when it might not otherwise do
so, which may negatively impact the Fund’s NAV and increase the Fund’s brokerage costs. Further, such sales may accelerate
the realization of taxable income and/or gains to shareholders, or the Fund may be required to sell its more liquid Fund investments to
meet a large redemption, in which case the Fund’s remaining assets may be less liquid, more volatile, and more difficult to price.
To the extent the Fund permits cash purchases, large purchases of Shares may adversely affect the Fund’s performance to the extent
that the Fund is delayed in investing new cash and is required to maintain a larger cash position than it ordinarily would. To the extent
these large shareholders transact in shares on the secondary market, such transactions may account for a large percentage of the trading
volume on the Fund’s exchange and may, therefore, have a material upward or downward effect on the market price of the Shares. To
the extent the Fund permits redemptions in cash, the Fund may hold a relatively large proportion of its assets in cash in anticipation
of large redemptions, diluting its investment returns.
Leverage
Risk. To the extent that the Fund borrows money, it may be leveraged.
Leveraging generally exaggerates the effect on NAV of any increase or decrease in the market value of the Fund’s portfolio securities.
Borrowing creates interest expenses and other expenses (e.g., commitment fees) for the Fund that affect the Fund’s performance.
Interest expenses are excluded from the Fund expenses borne by the Adviser under the unitary management fee.
Risks
of Futures and Options.
The Fund may enter into U.S. futures contracts, options and options
on futures contracts to manage cash flows. The Fund will not use futures or options for speculative purposes. The Fund intends to use
futures and options contracts to limit its risk exposure to levels comparable to direct investment in securities.
An
option gives a holder the right to buy or sell a specific security or an index
at a specified price within a specified period of time. An option on a futures contract gives the purchaser the right, in return for the
premium paid, to assume a position in the underlying futures contract at a specified price at any time prior to the expiration date of
the option. Options can offer large amounts of leverage, which may result in the Fund’s NAV being more sensitive to changes in the
value of the related instrument. The purchase of put or call options could be based upon predictions as to anticipated trends; such predictions
could prove to be incorrect resulting in loss of part or all of
7
the premium
paid. The risk of trading uncovered call options in some strategies (e.g., selling uncovered stock index futures contracts) potentially
is unlimited.
Futures
contracts provide for the future sale by one party and purchase by
another party of a specified amount of a specific instrument or index at a specified future time and at a specified price. In the event
of adverse price movements, the Fund would remain required to make daily cash payments to maintain its required margin. There is no assurance
that a liquid secondary market will exist for any particular futures contract at any particular time. The risk of loss in trading futures
contracts potentially is unlimited.
Risk
of Investing in Loans. Investments in loans are subject to interest
rate risk and credit risk. Default in the payment of interest or principal on a loan will result in a reduction in the value of the loan
and consequently a reduction in the value of the Fund’s investments and a potential decrease in the NAV of the Fund. Even if loans
are secured by specific collateral, there can be no assurance that such collateral would satisfy the borrower’s obligation in the
event of non-payment of scheduled interest or principal or that such collateral could be readily liquidated. In the event of the bankruptcy
of a borrower, the Fund’s access to the collateral may be limited by bankruptcy or other insolvency loans and, therefore, the Fund
could experience delays or limitations with respect to its ability to realize the benefits of the collateral securing a loan.
There
is no organized exchange on which loans are traded and reliable market
quotations may not be readily available. Therefore, elements of judgment may play a greater role in valuation of loans than for securities
with a more developed secondary market and the Fund may not realize full value in the event of the need to sell a loan. To the extent
that a secondary market does exist for certain loans, the market may be subject to volatility, irregular trading activity, wide bid/ask
spreads, decreased liquidity and extended trade settlement periods, any of which may impair the Fund’s ability to sell loans within
its desired time frame or at an acceptable price and its ability to accurately value existing and prospective investments. Extended trade
settlement periods for certain loans may result in cash not being immediately available to the Fund upon sale of the loan. As a result,
the Fund may have to sell other investments with shorter settlement periods or engage in borrowing transactions to raise cash to meet
its obligations.
Some
loans are subject to the risk that a court, pursuant to fraudulent conveyance
or other similar laws, could subordinate the loans to presently existing or future indebtedness of the borrower or take other action detrimental
to lenders such as invalidation of loans or causing interest previously paid to be refunded to the borrower. Investments in loans also
are subject to the risk of changes in legislation or state or federal regulations. If such legislation or regulations impose additional
requirements or restrictions on the ability of financial institutions to make loans, the availability of loans for investment by the Fund
may be adversely affected. Many loans are not registered with the SEC or any state securities commission and often are not rated by any
nationally recognized rating service. Generally, there is less readily available, reliable information about most loans than is the case
for many other types of securities. Although a loan may be senior to equity and other debt securities in a borrower’s capital structure,
such obligations may be structurally subordinated to obligations of the borrower’s subsidiaries.
Securities
Lending Risk. Securities lending involves a risk of loss because
the borrower may fail to return the securities in a timely manner or at all. If the Fund lends its securities and is unable to recover
the securities loaned, it may sell the collateral and purchase a replacement security in the market. Lending securities entails a risk
of loss to the Fund if and to the extent that the market value of the loaned securities increases and the collateral is not increased
accordingly. Any cash received as collateral for loaned securities will be invested in an affiliated money market fund. This investment
is subject to market appreciation or depreciation and the Fund will bear any loss on the investment of its cash collateral.
Structured
Notes Risk. Investments in structured notes involve risks including
interest rate risk, credit risk and market risk. Interest rate risk
refers
to fluctuations in the value of a note resulting from changes in the general level of interest rates. When the general level of interest
rates goes up, the prices of notes tend to go down. Credit risk refers to the possibility that the issuer of a note will be unable and/or
unwilling to make timely interest payments and/or repay the principal on its debt. Depending on the factors used, changes in interest
rates and movement of such factors may cause significant price fluctuations. Structured notes may be less liquid than other types of securities
and more volatile than the reference factor underlying the note. This means that the Fund may lose money if the issuer of the note defaults,
as the Fund may not be able to readily close out its investment in such notes without incurring losses.
Trading
Issues Risk. Investors buying or selling Shares in the secondary
market may pay brokerage commissions or other charges, which may be a significant proportional cost for investors seeking to buy or sell
relatively small amounts of Shares. Moreover, trading in Shares on the NYSE Arca, Inc. (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. Foreign exchanges may be open on days when Shares are not priced, and therefore, if the Fund
holds securities that are primarily listed on such exchanges, the value of such securities in the Fund’s portfolio may change on
days when shareholders will not be able to purchase or sell Shares.
Tax Structure of ETFs
Unlike
interests in conventional mutual funds, which typically are bought and sold only at closing NAVs, the Shares are traded throughout the
day in the secondary market on a national securities exchange, and are issued and redeemed principally in-kind in Creation Units at each
day’s next calculated NAV. These in-kind arrangements are designed to protect shareholders from the adverse effects on the Fund’s
portfolio that could arise from frequent cash creation and redemption transactions. In a conventional mutual fund, redemptions can have
an adverse tax impact on taxable shareholders because the mutual fund may need to sell portfolio securities to obtain cash to meet such
redemptions. These sales may generate taxable gains that must be distributed to the shareholders of the mutual fund, whereas the Shares’
in-kind redemption mechanism generally will not lead to such taxable events for the Fund or its shareholders. However, the tax advantages
of investing in Shares may be less pronounced than passive ETFs because the Fund is actively managed and, therefore, may have greater
turnover in its portfolio securities, which could result in less tax efficiency than an investment in a fund that is not actively managed.
The
Fund may recognize gains as a result of selling its securities. The Fund
also may be required to distribute any such gains to its shareholders to avoid adverse federal income tax consequences. For information
concerning the tax consequences of distributions, see the section entitled “Dividends, Other Distributions and Taxes” in this
prospectus.
Because
the Fund invests principally in REITs, its shareholders may receive
distributions of ordinary income and long-term capital gains in greater amounts and at earlier times compared to investors in a fund that
does not invest in REITs.
Portfolio Holdings
A description
of the Trust's policies and procedures with respect to the disclosure of the Fund’s portfolio holdings is available in the Fund’s
SAI, which is available at www.invesco.com/ETFs.
8
Management of the Fund
Invesco
Capital Management LLC is a registered investment adviser with its offices at 3500 Lacey Road, Suite 700, Downers Grove, IL 60515.
Invesco Capital Management LLC serves as the investment adviser to the Invesco Actively Managed Exchange-Traded Commodity Fund Trust,
Invesco Actively Managed Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco
Exchange-Traded Self-Indexed Fund Trust and Invesco India Exchange-Traded Fund Trust, a family of ETFs, with combined assets under management
of $173.9 billion as of December 31, 2022.
As
the Fund’s investment adviser, the Adviser has overall responsibility for
continuously monitoring the Fund’s investments, managing the Fund’s business affairs and providing certain clerical, bookkeeping
and other administrative services for the Trust and oversight of the Sub-Adviser.
Invesco
Advisers, Inc., a subsidiary of Invesco Ltd., the parent of Invesco Capital
Management LLC, is a registered investment adviser and serves as the investment sub-adviser to the Fund and, subject to the supervision
of the Adviser and the Board, is responsible for the investment management of the Fund. The Sub-Adviser’s principal business address
is 1555 Peachtree Street, N.E., Atlanta, Georgia 30309. In addition, the Sub-Adviser serves as the investment adviser to the Invesco mutual
funds with combined assets under management of approximately $702.1 billion as of December 31, 2022.
Portfolio
Managers
The
Adviser and Sub-Adviser each use teams of portfolio managers, investment strategists and other investment specialists in managing the
Fund. This team approach brings together many disciplines and leverages the Adviser’s and Sub-Adviser’s extensive resources.
In this regard, Grant Jackson, Chip McKinley, Darin Turner and Ping-Ying Wang (the “Portfolio Managers”) are jointly and primarily
responsible for the day-to-day management of the Fund.
Investment
decisions for the Fund are made by investment management teams
at the Sub-Adviser. Each Portfolio Manager is responsible for various functions related to portfolio management, including investing cash
flows, coordinating with other team members to focus on certain asset classes, implementing investment strategy and researching and reviewing
investment strategy. Each Portfolio Manager has limitations on his or her authority for risk management and compliance purposes that the
Adviser or Sub-Adviser believes to be appropriate.
◾
Grant
Jackson, Portfolio
Manager of the Sub-Adviser, has been responsible for the management of the Fund since March 2018 and has been associated with the Sub-Adviser
and/or its affiliates since 2005.
◾
Chip
McKinley, Portfolio Manager of the Sub-Adviser, has been responsible for the management of the Fund since 2022. He has been associated
with the Sub-Adviser and/or its affiliates since 2022. Prior to joining the Sub-Adviser, Mr. McKinley was the Founder and served as a
Portfolio Manager with Saepio Capital Management from 2019 to 2022. From 2007 to 2019, he was a Senior Vice President and Portfolio Manager
with Cohen and Steers Capital Management.
◾
Darin
Turner, Portfolio Manager of the Sub-Adviser, has been responsible for the management of the Fund since February 2015 and has been associated
with the Sub-Adviser and/or its affiliates since 2005.
◾
Ping-Ying
Wang, Portfolio Manager of the Sub-Adviser, has been responsible for the management of the Fund since November 2008 and has been associated
with Sub-Adviser and/or its affiliates since 1998.
The
Fund's SAI provides additional information about the Portfolio Managers’
compensation structure, other accounts that the Portfolio Managers manage and the Portfolio Managers' ownership of Shares.
Advisory
Fees
Pursuant
to an investment advisory agreement between the Adviser and the Trust (the “Investment Advisory Agreement”), the Fund pays
the Adviser an annual management fee equal to 0.35% of its average daily net assets (the “Advisory Fee”).
The
Advisory Fee paid by the Fund to the Adviser is an annual unitary management
fee. Out of the unitary management fee, the Adviser pays the Sub-Adviser’s fees and substantially all expenses of the Fund, including
the cost of transfer agency, custody, fund administration, legal, audit and other services, except for distribution fees, if any, brokerage
expenses, taxes, interest, Acquired Fund Fees and Expenses, if any, litigation expenses, and other extraordinary expenses including proxy
expenses (except for such proxies related to: (i) changes to the Investment Advisory Agreement, (ii) the election of any Board member
who is an “interested person” of the Trust, or (iii) any other matters that directly benefit the Adviser).
The
Fund may invest 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 (collectively, “Underlying Affiliated
Investments”). The indirect portion of the advisory fees that the Fund incurs through such Underlying Affiliated Investments is
in addition to the Advisory Fee payable to the Adviser by the Fund. Therefore, the Adviser has agreed to waive the Advisory Fee payable
by the 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 Underlying Affiliated Investments or (ii) the Advisory Fee available to be waived. This waiver
does not
apply to the Fund’s investment of cash collateral received for securities lending. This waiver is in place through at least August
31, 2024, and there is no guarantee that the Adviser will extend it past that date.
The
Adviser has entered into an Investment Sub-Advisory Agreement with
the Sub-Adviser. The sub-advisory fee is paid by the Adviser to the Sub-Adviser at 40% of the Adviser’s compensation of the sub-advised
assets of the Fund.
A
discussion regarding the basis for the Board’s approval of the Investment
Advisory Agreement and the Investment Sub-Advisory Agreement with respect to the Fund is available in the Fund’s Semi-Annual Report
to Shareholders for the fiscal period ended April 30, 2022.
How to Buy and Sell Shares
The
Fund issues or redeems its Shares at NAV per Share only in Creation Units or Creation Unit Aggregations.
Most
investors buy and sell Shares in secondary market transactions through
brokers. Shares are listed for trading on the secondary market on the Exchange. Shares can be bought and sold throughout the trading day
like other publicly traded shares. There is no minimum investment. Although Shares generally are purchased and sold in “round lots”
of 100 Shares, brokerage firms typically permit investors to purchase or sell Shares in smaller “odd lots,” at no per share
price differential. When buying or selling Shares through a broker, you will incur customary brokerage commissions and charges, and you
may pay some or all of the spread between the bid and the offered price in the secondary market on each leg of a round trip (purchase
and sale) transaction.
The
Shares trade on the Exchange under the symbol “PSR.”
Share
prices are reported in dollars and cents per Share.
APs
may acquire Shares directly from the Fund, and APs may tender their
Shares for redemption directly to the Fund, at NAV per Share, only in Creation Units or Creation Unit Aggregations, and in accordance
with the procedures described in the SAI.
Under
normal circumstances, the Fund will pay out redemption proceeds
to a redeeming AP within two days after the AP’s redemption request is received, in accordance with the process set forth in the
Fund’s SAI and in the agreement between the AP and the Fund’s distributor. However, the Fund reserves the right, including
under stressed market
9
conditions,
to take up to seven days after the receipt of a redemption request to pay an AP, all as permitted by the 1940 Act. If the Fund has foreign
investments in a country where local market holiday(s) prevent the Fund from delivering such foreign investments to an AP in response
to a redemption request, the Fund may take up to 15 days after the receipt of the redemption request to deliver such investments to the
AP.
The
Fund anticipates meeting redemption requests either by paying redemption
proceeds to an AP primarily through in-kind redemptions or in cash. Cash used for redemptions will be raised from the sale of portfolio
assets or may come from existing holdings of cash or cash equivalents. If the Fund holds Rule 144A securities, an AP that is not a “qualified
institutional buyer,” as such term is defined under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”),
will not be able to receive those Rule 144A securities.
The
Fund may liquidate and terminate at any time without shareholder approval.
Book
Entry
Shares
are held in book-entry form, which means that no stock certificates are issued. The Depository Trust Company (“DTC”) or its
nominee is the record owner of all outstanding Shares and is recognized as the record owner of all Shares for all purposes.
Investors
owning Shares are beneficial owners as shown on the records of
DTC or its participants. DTC serves as the securities depository for all Shares. Participants in DTC include securities brokers and dealers,
banks, trust companies, clearing corporations and other institutions that directly or indirectly maintain a custodial relationship with
DTC. As a beneficial owner of Shares, you are not entitled to receive physical delivery of stock certificates or to have Shares registered
in your name, and you are not considered a registered owner of Shares. Therefore, to exercise any right as an owner of Shares, you must
rely upon the procedures of DTC and its participants. These procedures are the same as those that apply to any other stocks that you hold
in book entry or “street name” form.
Share
Trading Prices
The
trading prices of Shares on the Exchange may differ from the Fund’s daily NAV. Market forces of supply and demand, economic conditions
and other factors may affect the trading prices of Shares.
Frequent Purchases and Redemptions of Shares
Shares
may be purchased and redeemed directly from the Fund only in Creation Units by APs. The vast majority of trading in Shares occurs on the
secondary market and does not involve the Fund directly. In-kind purchases and redemptions of Creation Units by APs and cash trades on
the secondary market are unlikely to cause many of the harmful effects of frequent purchases or redemptions of the Shares. Cash purchases
and/or redemptions of Creation Units, however, can result in increased disruption of portfolio management, dilution to the Fund and increased
transaction costs, which could negatively impact the Fund's ability to achieve its investment objective, and may lead to the realization
of capital gains. These consequences may increase as the frequency of cash purchases and redemptions of Creation Units by APs increases.
However, direct trading by APs is critical to ensuring that Shares trade at or close to NAV.
To
minimize these potential consequences of frequent purchases and redemptions
of Shares, the Fund imposes transaction fees on purchases and redemptions of Creation Units to cover the custodial and other costs the
Fund incurs in effecting trades. In addition, the Adviser monitors trades by APs for patterns of abusive trading and the Fund reserves
the right to not accept orders from APs that the Adviser has determined may be disruptive to the management of the Fund or otherwise are
not in the best interests of the Fund. For these reasons, the Board has not adopted policies and procedures with respect to frequent purchases
and redemptions of Shares.
Dividends, Other Distributions and Taxes
Dividends
and Other Distributions
A portion
of the Fund’s distributions received from REITs may be reclassified as a return of capital for federal income tax purposes. As a
result of such reclassification, the Fund is more likely to make distributions that are treated as returns of capital, and possibly in
greater amounts, than a fund that does not invest in REITs.
Generally,
dividends from net investment income, if any, are declared and
paid quarterly by the Fund. The Fund also intends to distribute its net realized capital gains, if any, to shareholders annually. Dividends
and other distributions may be declared and paid more frequently to comply with the distribution requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended (the “Code”), and to avoid a federal excise tax imposed on regulated investment companies.
Distributions
in cash may be reinvested automatically in additional whole Shares
only if the broker through whom you purchased Shares makes such option available.
Taxes
The
Fund intends to qualify each year as a regulated investment company (“RIC”) and, as such, is not subject to entity-level tax
on the income and gain it distributes. If you are a taxable investor, dividends and distributions you receive generally are taxable to
you whether you reinvest distributions in additional Shares or take them in cash. Every year, you will be sent information showing the
amount of dividends and distributions you received during the prior calendar year. In addition, investors in taxable accounts should be
aware of the basic tax points listed below:
Fund
Tax Basics
◾
The
Fund earns income generally in the form of dividends or interest on its investments. This income, less expenses incurred in the operation
of the Fund, constitutes the Fund’s net investment income from which dividends may be paid to shareholders. If you are a taxable
investor, distributions of net investment income generally are taxable to you as ordinary income.
◾
Distributions
of net short-term capital gains are taxable to you as ordinary income. A fund with a high portfolio turnover rate (a measure of how frequently
assets within the fund are bought and sold) is more likely to generate short-term capital gains than a fund with a low portfolio turnover
rate.
◾
Distributions
of net long-term capital gains are taxable to you as long-term capital gains no matter how long you have owned your Shares.
◾
A
portion of income dividends paid by the Fund may be reported as qualified dividend income eligible for taxation by individual shareholders
at long-term capital gain rates, provided certain holding period requirements are met. These reduced rates generally are available for
dividends derived from the Fund’s investment in stocks of domestic corporations and qualified foreign corporations. If the Fund
invests primarily in debt securities, either none or only a nominal portion of the dividends paid by the Fund will be eligible for taxation
at these reduced rates.
◾
The
use of derivatives by the Fund may cause the Fund to realize higher amounts of ordinary income or short-term capital gain, distributions
from which are taxable to individual shareholders at ordinary income tax rates rather than at the more favorable tax rates for long-term
capital gain.
◾
Distributions
declared to shareholders with a record date in October, November or December—if paid to you by the end of January—are taxable
for federal income tax purposes as if received in December.
10
◾
Any
long-term or short-term capital gains realized on the sale of your Shares will be subject to federal income tax.
◾
If
the Fund is terminated, a shareholder will receive a liquidating distribution(s) which should be treated as payment in exchange for the
Shares held by the shareholder. As a result, each shareholder should recognize gain or loss in an amount equal to the difference between
the shareholder’s adjusted tax basis in his or her shares and the liquidating distribution(s) he or she receives, except to the
extent the Shares are held in a tax-advantaged arrangement. A liquidating distribution may be subject to backup withholding as described
below.
◾
A
shareholder’s cost basis information will be provided on the sale of any of the shareholder’s Shares, subject to certain exceptions
for exempt recipients. Please contact the broker (or other nominee) that holds your Shares with respect to reporting of your cost basis
and available elections for your account.
◾
At
the time you purchase your Shares, the Fund’s NAV may reflect undistributed income or undistributed capital gains. A subsequent
distribution to you of such amounts, although constituting a return of your investment, would be taxable. Buying Shares just before the
Fund declares an income dividend or capital gains distribution is sometimes known as “buying a dividend.” In addition, the
Fund’s NAV may, at any time, reflect net unrealized appreciation, which may result in future taxable distributions to you.
◾
By
law, if you do not provide the Fund with your proper taxpayer identification number and certain required certifications, you may be subject
to backup withholding on any distributions of income, capital gains, or proceeds from the sale of your Shares. The Fund also must withhold
if the IRS instructs it to do so. When withholding is required, the amount will be 24% of any distributions or proceeds paid.
◾
An
additional 3.8% Medicare tax is imposed on certain net investment income (including ordinary dividends and capital gain distributions
received from the Fund and net gains from taxable dispositions of Shares) of U.S. individuals, estates and trusts to the extent that such
person’s “modified adjusted gross income” (in the case of an individual) or “adjusted gross income” (in
the case of an estate or trust) exceeds a threshold amount. This Medicare tax, if applicable, is reported by you on, and paid with, your
federal income tax return.
◾
You
will not be required to include the portion of dividends paid by the Fund derived from interest on U.S. government obligations in your
gross income for purposes of personal and, in some cases, corporate income taxes in many state and local tax jurisdictions. The percentage
of dividends that constitutes dividends derived from interest on federal obligations will be determined annually. This percentage may
differ from the actual percentage of interest received by the Fund on federal obligations for the particular days on which you hold shares.
◾
Fund
distributions and gains from the sale of Shares generally are subject to state and local income taxes.
◾
If
the Fund qualifies to pass through the tax benefits from foreign taxes it pays on its investments, and elects to do so, then any foreign
taxes it pays on these investments may be passed through to you. You will then be required to include your pro rata share of
these taxes in gross income, even though not actually received by you, and will be entitled either to deduct your share of these taxes
in computing your taxable income, or to claim a foreign tax credit for these taxes against your U.S. federal income tax.
◾
Foreign
investors should be aware that U.S. withholding, special certification requirements to avoid U.S. backup withholding and claim any treaty
benefits, and estate taxes may apply to an investment in the Fund.
◾
Under
the Foreign Account Tax Compliance Act (“FATCA”), a 30%
withholding
tax is imposed on income dividends made by the Fund to certain foreign entities, referred to as foreign financial institutions or non-financial
foreign entities, that fail to comply (or be deemed compliant) with extensive reporting and withholding requirements designed to inform
the U.S. Department of the Treasury of U.S.-owned foreign investment accounts. After December 31, 2018, FATCA withholding also would have
applied to certain capital gain distributions, return of capital distributions and the proceeds arising from the sale of Shares; however,
based on proposed regulations issued by the IRS, which can be relied upon currently, such withholding is no longer required unless final
regulations provide otherwise (which is not expected). The Fund may disclose the information that it receives from its shareholders to
the IRS, non-U.S. taxing authorities or other parties as necessary to comply with FATCA or similar laws. Withholding also may be required
if a foreign entity that is a shareholder of the Fund fails to provide the Fund with appropriate certifications or other documentation
concerning its status under FATCA.
◾
To
the extent the Fund invests in an underlying fund that is taxed as a RIC, please see the section titled
“Taxes –
Taxation of the Funds” in the Fund’s SAI for more information
regarding the tax consequences of such investment.
◾
The
above discussion concerning the taxability of Fund dividends and distributions and of sales of Shares is inapplicable to investors that
generally are exempt from federal income tax, such as retirement plans that are qualified under Section 401 and 403 of the Code and individual
retirement accounts (“IRAs”) and Roth IRAs.
Additional
Considerations for Investments in Real Estate Securities
◾
Because
of “noncash” expenses such as property depreciation, the cash flow of a REIT that owns properties will exceed its taxable
income. The REIT, and in turn the Fund, may distribute this excess cash. Such a distribution is classified as a return of capital. Return
of capital distributions generally are not taxable to you. Your cost basis in your Shares will be decreased by the amount of any return
of capital. Any return of capital distributions in excess of your cost basis will be treated as capital gains.
◾
Dividends
paid to shareholders from the Fund’s investments in U.S. REITs generally will not qualify for taxation at long-term capital gain
rates applicable to qualified dividend income.
◾
The
Fund may derive “excess inclusion income” from certain equity interests in mortgage pooling vehicles either directly or through
an investment in a U.S. REIT. Please see the SAI for a discussion of the risks and special tax consequences to shareholders in the event
the Fund realizes excess inclusion income in excess of certain threshold amounts.
◾
Under
the Tax Cuts and Jobs Act, “qualified REIT dividends” (i.e., ordinary REIT dividends other than capital gain dividends and
portions of REIT dividends designated as qualified dividend income) are treated as eligible for a 20% deduction by noncorporate taxpayers.
The Fund may choose to report the special character of “qualified REIT dividends” to a shareholder, provided both the Fund
and the shareholder meet certain holding period requirements with respect to their shares.
◾
The
Fund’s foreign shareholders should see the SAI for a discussion of the risks and special tax consequences to them from a sale of
a U.S. real property interest by a REIT in which the Fund invests.
Taxes
on Purchase and Redemption of Creation Units
To
the extent that the Fund permits in-kind transactions, an AP that exchanges equity securities for a Creation Unit generally will recognize
a capital gain or loss equal to the difference between the market value of the Creation Units at the time of exchange (plus any cash received
by the AP as part of the issue) and the sum of the AP's aggregate basis in the securities
11
surrendered
plus any cash component paid. Similarly, an AP that redeems a Creation Unit in exchange for securities generally will recognize a capital
gain or loss equal to the difference between the AP's basis in the Creation Units (plus any cash paid by the AP as part of the redemption)
and the aggregate market value of the securities received (plus any cash received by the AP as part of the redemption). The IRS, however,
may assert that a loss realized upon an exchange of securities for a Creation Unit, or of a Creation Unit for securities, cannot be deducted
currently under the rules governing “wash sales” or on the ground that there has been no significant change in the AP's economic
position. An AP exchanging securities should consult its own tax advisor(s) with respect to whether wash sale rules apply and when a loss
otherwise might not be deductible.
Any
capital gain or loss realized on a redemption of a Creation Unit generally
is treated as long-term capital gain or loss if the Shares have been held for more than one year and as short-term capital gain or loss
if the Shares have been held for one year or less, assuming that such Creation Units are held as a capital asset. If you purchase or redeem
one or more Creation Units, you will be sent a confirmation statement showing how many Shares you purchased or sold and at what price.
The
foregoing discussion summarizes some of the more important
possible consequences under current federal, state and local tax law of an investment in the Fund. It is not a substitute for personal
tax advice. You also may be subject to state, local and/or foreign tax on the Fund's distributions and sales and/or redemptions of Shares.
Consult your personal tax advisor(s) about the potential tax consequences of an investment in the Shares under all applicable tax laws.
Distributor
Invesco
Distributors, Inc. (the “Distributor”) serves as the distributor of Creation Units for the Fund on an agency basis. The Distributor
does not maintain a secondary market in Shares. The Distributor is an affiliate of the Adviser.
Net Asset Value
The
NAV for the Fund will be calculated and disseminated daily on each day that the NYSE is open for trading. The Bank of New York Mellon
(“BNYM”) normally calculates the Fund’s NAV as of the regularly scheduled close of business of the NYSE (normally 4:00
p.m., Eastern time). The Fund’s NAV is based on prices at the time of closing, and U.S. fixed-income assets may be valued as of
the announced closing time for trading in fixed-income instruments in a particular market or exchange. NAV is calculated by deducting
all of the Fund’s liabilities from the total value of its assets and then dividing the result by the number of Shares outstanding,
rounding to the nearest cent. Generally, the portfolio securities are recorded in the NAV no later than the trade date plus one day. In
determining NAV,
expenses are accrued and applied daily and securities and other assets for which market quotations are readily available and reliable
are valued at market value. The Trust’s Board has designated the Adviser to fair value the Fund’s portfolio securities and
other assets for which market quotations are not readily available and reliable in accordance with Board-approved policies and related
Adviser procedures (the “Valuation Procedures”), subject to the Board’s oversight.
Securities
listed or traded on an exchange (except convertible securities)
generally are valued at the last trade price or official closing price that day as of the close of the exchange where the security primarily
trades. Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s
end-of-business day NAV per share, whereas securities of investment companies that are exchange-traded
are valued at the last trade price or official closing price on
the
exchange on which they primarily trade. Deposits, other obligations of U.S. and non-U.S. banks and financial institutions, and cash equivalents
are valued at their daily account value. Fixed-income securities (including convertible securities) normally are valued on the basis of
prices provided by independent pricing services. Pricing services generally value fixed-income
securities assuming orderly transactions of institutional round
lot size, but the 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, and their value may be adjusted accordingly. Futures contracts are valued at the daily settlement price set
by an exchange on which they are principally traded. U.S.
exchange-traded options are valued at the mean between the last
bid and asked prices from the exchange on which they principally trade. Non-U.S.
exchange-traded options are valued at the final settlement price
set by the exchange on which they trade. Options not listed on an exchange and swaps generally are valued using pricing provided from
independent pricing services. Unlisted securities will be valued using prices provided by independent pricing services or by another method
that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.
Foreign exchange-traded equity securities are valued at their market
value if market quotations are available and reliable. The Adviser may use various pricing services to obtain market quotations as well
as fair value prices. The Adviser may discontinue the use of any pricing service at any time.
At
times, a listed security’s market price may not be readily available. Moreover,
even when market quotations are available for a security, they may be stale or unreliable. A security’s last market quotation may
become stale because, among other reasons, (i) the security is not traded frequently, (ii) the security ceased trading before its exchange
closed; (iii) market or issuer-specific events occurred after the security ceased trading; or (iv) the passage of time between when the
security’s trading market closes and when the Fund calculates its NAV caused the quotation to become stale. A security’s last
market quotation may become unreliable because of (i) certain issuer- or security-specific events, including a merger or insolvency, (ii)
events which affect a geographical area or an industry segment, such as political events or natural disasters, or (iii) market events,
such as a significant movement in the U.S. market. When a security’s market price is not readily available, or the Adviser determines,
in its judgment, that such price is stale or unreliable, the Adviser
will value the security at fair value in good faith using the Valuation
Procedures.
Fair
value pricing involves subjective judgments, and fair value pricing methods
may change from time to time. Consequently, while such determinations may be made in good faith, it may nevertheless be more difficult
for the Adviser to accurately assign a daily value, and Fund securities that are fair valued may be subject to greater fluctuation in
their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation,
and the degree of subjectivity in such decisions, it is possible that a fair value determination for a security is materially different
than the value that could be realized upon the sale of the security. There is no assurance that the Fund could sell a portfolio security
for the value established for it at any time, and it is possible that the Fund would incur a loss if a security is sold at a discount
to its established value.
Fund Service Providers
BNYM,
240 Greenwich Street, New York, New York 10286, is the administrator, custodian, transfer agent and fund accounting and dividend disbursing
agent for the Fund.
Stradley
Ronon Stevens & Young, LLP, 191 North Wacker Drive, Suite 1601, Chicago, Illinois 60606, and 2000 K Street, NW, Suite 700, Washington,
D.C. 20006, serves as legal counsel to the Trust.
12
PricewaterhouseCoopers
LLP (“PwC”), One North Wacker Drive, Chicago, Illinois 60606, serves as the Fund’s independent registered public accounting
firm. PwC is responsible for auditing the annual financial statements of the Fund and assists in the preparation and/or review of the
Fund’s federal and state income tax returns.
13
Financial Highlights
The financial
highlights table below is intended to help you understand the Fund’s financial performance for the past five fiscal years. Certain
information reflects financial results for a single Share. The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and other
distributions).
This information has been derived from the Fund’s financial statements, which have been audited by PwC, whose report, along with
the Fund’s financial statements, is included in the Fund’s Annual Report for the fiscal year ended October 31, 2022, which
is available upon request.
| | Years Ended October 31, | ||||
| | 2022 | 2021 | 2020 | 2019 | 2018 |
| Per Share Operating Performance: | | | | | |
| Net asset value at beginning of year | $110.25 | $78.27 | $97.24 | $79.45 | $80.07 |
| Net investment income(a) | 1.83 | 1.59 | 2.11 | 2.16 | 2.05 |
| Net realized and unrealized gain (loss) on investments | (22.07) | 32.99 | (18.34) | 18.01 | (1.24) |
| Total from investment operations | (20.24) | 34.58 | (16.23) | 20.17 | 0.81 |
| Distributions to shareholders from: | | | | | |
| Net investment income | (2.59) | (2.60) | (2.74) | (2.38) | (1.43) |
| Net asset value at end of year | $87.42 | $110.25 | $78.27 | $97.24 | $79.45 |
| Market price at end of year(b) | $87.45 | $110.26 | $78.23 | $97.13 | $79.30 |
| Net Asset Value Total Return(c) | (18.66)% | 44.71% | (16.56)% | 25.82% | 1.02% |
| Market Price Total Return(c) | (18.65)% | 44.82% | (16.52)% | 25.90% | 0.87% |
| Ratios/Supplemental Data: | | | | | |
| Net assets at end of year (000’s omitted) | $112,770 | $130,094 | $78,270 | $121,552 | $27,807 |
| Ratio to average net assets of: | | | | | |
| Expenses | 0.35% | 0.35% | 0.35% | 0.35% | 0.53% |
| Net investment income | 1.77% | 1.61% | 2.46% | 2.40% | 2.58% |
| Portfolio turnover rate(d) | 68% | 83% | 51% | 30% | 92% |
| (a) | Based on average shares outstanding. |
| (b) | The mean between the last bid and ask prices. |
| (c) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
| (d) | 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. |
14
Premium/Discount Information
Information
showing the number of days the market price of the Shares was greater (at a premium) and less (at a discount) than the Fund’s NAV
for the most recently completed calendar year and the most recently completed calendar quarters since that year (or the life of the Fund,
if shorter) is available on the Fund’s website at www.invesco.com/ETFs.
Other Information
Continuous
Offering
The
method by which Creation Unit Aggregations of Shares are created and traded may raise certain issues under applicable securities laws.
Because new Creation Unit Aggregations of Shares are issued and sold by the Fund on an ongoing basis, a “distribution,” as
such term is used in the Securities Act, may occur at any point. Broker-dealers and other persons are cautioned that some activities on
their part may, depending on the circumstances, result in their being deemed participants in a distribution in a manner which could render
them statutory underwriters and subject them to the prospectus delivery requirement and liability provisions of the Securities Act.
For
example, a broker-dealer firm or its client may be deemed a statutory
underwriter if it takes Creation Unit Aggregations after placing an order with the Distributor, breaks them down into constituent Shares
and sells such Shares directly to customers, or if it chooses to couple the creation of a supply of new Shares with an active selling
effort involving the solicitation of secondary market demand for Shares. A determination of whether one is an underwriter for purposes
of the Securities Act must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its
client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities
that could lead to a characterization as an underwriter.
Broker-dealer
firms also should note that dealers who are not “underwriters”
but are effecting transactions in Shares, whether or not participating in the distribution of Shares, generally are required to deliver
a prospectus. This is because the prospectus delivery exemption in Section 4(a)(3)(C) of the Securities Act is not available in respect
of such transactions as a result of Section 24(d) of the 1940 Act. As a result, broker-dealer firms should note that dealers who are not
“underwriters” but are participating in a distribution (as contrasted with engaging in ordinary secondary market transactions),
and thus dealing with the Shares that are part of an overallotment within the meaning of Section 4(a)(3)(C) of the Securities Act, will
be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. For delivery of prospectuses
to exchange members, the prospectus delivery mechanism of Rule 153 under the Securities Act only is available with respect to transactions
on a national exchange.
Delivery
of Shareholder Documents–Householding
Householding
is an option available to certain investors of the Fund. Householding is a method of delivery, based on the preference of the
individual
investor, in which a single copy of certain shareholder documents can be delivered to investors who share the same address, even if their
accounts are registered under different names. Householding for the Fund is available through certain broker-dealers. If you are interested
in enrolling in householding and receiving a single copy of the prospectus and other shareholder documents, please contact your broker-dealer.
If you currently are enrolled in householding and wish to change your householding status, please contact your broker-dealer.
For
More Information
For
more detailed information on the Trust, the Fund and the Shares, you may request a copy of the Fund’s SAI. The SAI provides detailed
information about the Fund and is incorporated by reference into this prospectus. This means that the SAI legally is a part of this prospectus.
Additional information about the Fund’s investments also is available in the Fund’s Annual and Semi-Annual Reports to Shareholders.
In the Fund’s current Annual Report, you will find a discussion of the market conditions and investment strategies that significantly
affected the Fund's performance during the last fiscal year. If you have questions about the Fund or Shares or you wish to obtain the
SAI, Annual Report and/or Semi-Annual Report, free of charge, or to make shareholder inquiries, please:
| Call: | Invesco Distributors, Inc. at 1-800-983-0903 Monday through Friday 8:00 a.m. to 5:00 p.m. Central Time |
| Write: | Invesco Actively Managed Exchange-Traded Fund Trust c/o Invesco Distributors, Inc. 11 Greenway Plaza, Suite 1000 Houston, Texas 77046-1173 |
| Visit: | www.invesco.com/ETFs |
Reports
and other information about the Fund are available on the EDGAR
Database on the SEC's Internet site at www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by
electronic request at the following e-mail address: publicinfo@sec.gov.
No
person is authorized to give any information or to make any representations
about the Fund and its Shares not contained in this prospectus, and you should not rely on any other information. Read and keep this prospectus
for future reference.
Dealers
effecting transactions in the Shares, whether or not participating
in this distribution, generally are required to deliver a prospectus. This is in addition to any obligation of dealers to deliver a prospectus
when acting as underwriters.
The
Trust's registration number under the 1940 Act is 811-22148.
15
