Domestic Equity

The fiscal year ended October 31, 2022 began with continued volatility in equity markets in the fourth quarter of 2021 amid substantial inflation and the emergence of a new COVID-19 variant. Pandemic-related supply chain disruption and labor shortages intensified during the quarter, resulting in broadly higher input costs for companies and consumers alike. Additionally, the price of oil rose,¹ causing higher gas prices for consumers, and the Consumer Price Index (CPI) reported for November 2021 increased 0.8%, resulting in a 6.8% increase over the prior 12 months, the highest since 1982.² To combat inflation, the US Federal Reserve (the Fed) announced the potential for three or more interest rate increases in 2022. With solid corporate earnings and optimism about the COVID-19 Omicron variant reporting milder symptoms, stocks rallied at the 2021 year-end.

Equity markets declined in the first quarter of 2022 amid volatility sparked by Russia’s invasion of Ukraine, rising commodity prices, rampant global inflation and the Fed’s shift toward tighter monetary policy. Russia’s invasion exacerbated inflation pressures, disrupting already strained supply chains and increasing shortages of oil, gas and raw materials. The price of oil rose sharply, with crude prices reaching their highest price per barrel since 2008.¹ Inflation continued to be a top concern for consumers, investors and the Fed. To combat inflation, the Fed raised the federal funds rate by one-quarter percentage point in March and the Fed indicated it would “taper” its asset purchase program quickly.³

As the war in Ukraine continued and corporate earnings in high-profile names like Netflix reported slowing growth and profits, the equity markets sold off for much of April 2022. The downward direction of the equity markets continued into the second quarter of 2022 amid record inflation, rising interest rates and an increasing likelihood of a US recession. Driven by higher food and energy prices, the CPI rose by yet another 40-year high to 8.6% for the 12 months ended May 2022.² Oil prices peaked near $122 per barrel in early June, resulting in skyrocketing gasoline prices; the national average price reached a record high above $5 per gallon in early June.¹ To tame inflation, the Fed raised the benchmark federal funds rate three more times, by 0.50% in May, by 0.75% in June and another 0.75% in July, which were the largest increases in nearly 30 years.³ US equity markets rose in July and much of August until Fed chairman Jerome Powell’s hawkish comments at an economic policy symposium held in Jackson Hole, Wyoming, sparked a sharp selloff at month-end. The Fed reiterated that it would continue taking aggressive action to curb inflation, even though such measures could “bring pain to households and businesses,” and the Fed raised the benchmark federal funds rate by another 0.75% in September.³

After experiencing a sharp drop in September 2022, US equity markets rebounded in October with strong gains, despite mixed data on the economy and corporate earnings. Inflation data

reported in October came in higher than expected; however, the labor market remained strong, with payroll employment gains and a decline in the unemployment rate to a near record low of 3.5% in September.² The initial estimate of third quarter real gross domestic product showed an increase of 2.6% (annualized) after falling in the prior two quarters, but the headline number masked a drop in demand and investment. Corporate earnings were generally in line with expectations, but many companies’ forward earnings guidance was weaker than expected.

In this environment, US stocks had negative double-digit returns for the fiscal year ended October 31, 2022 of -14.61%, as measured by the S&P 500 Index.⁴

 

1	Source: Bloomberg LP

2	Source: US Bureau of Labor Statistics

3	Source: US Federal Reserve

4	Source: Lipper Inc.

Global Equity

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

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

Inflation headwinds continued into the third quarter of 2022. The US Federal Reserve (the Fed), the European Central Bank and the Bank of England all raised interest rates. In contrast, the People’s Bank of China lowered its policy rate and the Bank of Japan kept rates the same. Emerging market equities, hampered by the strong US dollar, underperformed developed market equities.

During October 2022, developed market equities rebounded and were in positive territory. Developed market equities outperformed emerging market equities, which declined primarily driven by weakness in China as Chinese markets reacted to the reappointment of President Xi and his authority, with no signs of the country’s zero-COVID-19 policy being relaxed. Despite the rebound in October for developed market equities, at the end of the fiscal year, trailing one-year returns for developed market equities and emerging market equities were both in negative territory.

As an index fund, Invesco China Technology ETF’s (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the FTSE China Incl A 25% Technology Capped Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index, as well as American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”) that represent securities in the Index.

Strictly in accordance with its guidelines and mandated procedures, FTSE International Limited (the “Index Provider”) compiles, maintains, and calculates the Index. The Index is composed of securities of companies that the Index Provider, pursuant to the Index methodology, has classified as being in the technology industry and that are constituents of the FTSE China Index or FTSE China A Stock Connect CNH Index. The Index may include China A-shares (shares of Chinese incorporated companies that may trade on the Shanghai or Shenzhen stock exchanges via a Stock Connect program), B-shares, H-shares, N-shares, Red Chip shares, P-chip shares and S-chip shares. Index constituents are modified market capitalization weighted. The Fund generally invests in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended October 31, 2022, on a market price basis, the Fund returned (53.17)%. On a net asset value (“NAV”) basis, the Fund returned (53.32)%. During the same time period, the Index returned (53.05)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.

During this same time period, the MSCI China Index (Net) (the “Benchmark Index”) returned (47.90)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 700 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of Chinese stocks.

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

Relative to the Benchmark Index, the Fund was most overweight in the semiconductors & semiconductor equipment industry and most underweight the internet & direct marketing retail industry during the fiscal year ended October 31, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during that period can be attributed to the Fund’s underweight allocation to the banks industry as well as the Fund’s overweight allocation to the interactive media & services industry.

For the fiscal year ended October 31, 2022, the trading companies & distributors industry contributed most significantly to the Fund’s return, followed by the communications equipment industry. The interactive media & services industry detracted most significantly from the Fund’s return, followed by the electronic equipment instruments & components and entertainment industries, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2022 included China National Software & Service Co. Ltd., A Shares, a software company (portfolio average weight of 0.06%), and Beijing Kingsoft Office Software. Inc., A Shares, a software company (portfolio average weight of 0.82%). Positions that detracted most significantly from the Fund’s return included Tencent Holdings Ltd., an interactive media & services company (portfolio average weight of 10.61%), and Kuaishou Technology, an interactive media & services company (portfolio average weight of 6.92%).

 

Industry Breakdown (% of the Fund’s Net Assets) as of October 31, 2022
Interactive Media & Services			22.63
Semiconductors & Semiconductor Equipment			19.54
Internet & Direct Marketing Retail			15.89
Software			13.00
Electronic Equipment, Instruments & Components			12.36
Entertainment			5.06
IT Services			3.84
Industry Types Each Less Than 3%			7.70
Money Market Funds Plus Other Assets Less Liabilities			(0.02)
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of October 31, 2022
Security
Tencent Holdings Ltd.			8.93
Meituan, B Shares			8.32
Pinduoduo, Inc., ADR			7.34
Baidu, Inc., A Shares			5.83
Kingdee International Software Group Co. Ltd.			4.39
Kuaishou Technology			4.01
LONGi Green Energy Technology Co. Ltd., A Shares			3.65
Sunny Optical Technology Group Co. Ltd.			3.56
Tencent Music Entertainment Group, ADR			2.32
Bilibili, Inc., Z Shares			2.28
Total			50.63

 

*	Excluding money market fund holdings.

Guggenheim China Technology ETF (the “Predecessor Fund”) Fund Inception: December 08, 2009

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.70% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

Performance results for the indexes stated above are based upon a hypothetical investment in their respective constituent securities. The

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

Notes Regarding Indexes and Fund Performance History:

 

-	Effective after the close of business on May 18, 2018, the Predecessor Fund was reorganized into the Fund. Fund returns shown are blended returns of the Predecessor Fund and the Fund.

 

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

 

-	Net returns reflect reinvested dividends net of withholding taxes.

 

-

The Blended-FTSE China Incl A 25% Technology Capped Index (Net) is comprised of the performance of the AlphaShares China Technology Index, the Fund’s previous underlying index from Fund inception to the conversion date, June 21, 2019, followed by the performance of the Index, starting from the conversion date through October 31, 2022.

As an index fund, the Invesco DWA Developed Markets Momentum ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Dorsey Wright^® Developed Markets Technical Leaders Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, Dorsey Wright & Associates, LLC (“Dorsey Wright” or the “Index Provider”) selects securities pursuant to its proprietary selection methodology for inclusion in the Index, which is designed to identify securities that demonstrate powerful relative strength characteristics. “Relative strength” is an investing technique that seeks to determine the strongest performing securities by measuring certain factors, such as a security’s relative performance against the overall market or a security’s relative strength value, which is derived by comparing the rate of increase of the security’s price over a set period as compared to that of a benchmark index. The Index is comprised of equity securities of large capitalization companies based in countries classified as developed markets, excluding the United States. Dorsey Wright selects securities for inclusion in the Index from an eligible universe of the largest 1,000 constituents by market capitalization within the Nasdaq Developed Markets Ex United States Index (except for U.S.-listed American depositary receipts of foreign listings). The Index Provider assigns a relative strength score to each eligible security and selects approximately 100 securities with the greatest scores for inclusion in the Index. Component security weights are based on relative scores, with securities with higher scores receiving larger weights. The Fund generally invests in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended October 31, 2022, on a market price basis, the Fund returned (33.49)%. On a net asset value (“NAV”) basis, the Fund returned (33.25)%. During the same time period, the Index returned (32.68)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period.

During this same time period, the MSCI EAFE^® Index (Net) (the “Benchmark Index”) returned (23.00)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 800 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the markets of economically developed countries outside of the U.S.

The performance of the Fund differed from the Benchmark Index because the Fund seeks to track an Index that employs a proprietary stock selection and weighting methodology, whereas

the Benchmark Index selects and weights stocks based on market capitalization.

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

For the fiscal year ended October 31, 2022, the industrials sector detracted most significantly from the Fund’s return, followed by the information technology and materials sectors, respectively. No sector contributed positively to the Fund’s return.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2022 included Lasertec Corp., an information technology company (portfolio average weight of 1.30%), and Enerplus Corp., an Energy company (portfolio average weight of 0.12%). Positions that detracted most significantly from the Fund’s return included NIBE Industrier AB, Class B, an industrials company (portfolio average weight of 1.30%), and ASM International N.V., an information technology company (no longer held at fiscal year-end).

 

Sector Breakdown (% of the Fund’s Net Assets) as of October 31, 2022
Information Technology			16.78
Financials			16.77
Industrials			16.51
Energy			9.71
Health Care			9.53
Materials			7.81
Consumer Discretionary			7.26
Consumer Staples			6.83
Utilities			4.83
Communication Services			3.45
Real Estate			0.49
Money Market Funds Plus Other Assets Less Liabilities			0.03

Fund Inception: December 28, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.80% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not

reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

 

-	Net returns reflect reinvested dividends net of withholding taxes.

As an index fund, the Invesco DWA Emerging Markets Momentum ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Dorsey Wright^® Emerging Markets Technical Leaders Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, Dorsey Wright & Associates, LLC (“Dorsey Wright” or the “Index Provider”) selects securities pursuant to its proprietary selection methodology for inclusion in the Index, which is designed to identify securities that demonstrate powerful relative strength characteristics. “Relative strength” is an investing technique that seeks to determine the strongest performing securities by measuring certain factors, such as a security’s relative performance against the overall market or a security’s relative strength value, which is derived by comparing the rate of increase of the security’s price over a set period as compared to that of a benchmark index. The Index is comprised of equity securities of large capitalization companies based in countries classified as emerging markets. Dorsey Wright selects securities for inclusion in the Index from an eligible universe of the largest 1,000 constituents by market capitalization within the Nasdaq Emerging Markets Index (except for U.S.-listed American Depositary Receipts or foreign listings). The Index Provider assigns a relative strength score to each eligible security and selects approximately 100 securities with the greatest scores for inclusion in the Index. Component security weights are based on relative scores, with securities with higher scores receiving larger weights. The Fund generally invests in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended October 31, 2022, on a market price basis, the Fund returned (33.79)%. On a net asset value (“NAV”) basis, the Fund returned (34.05)%. During the same time period, the Index returned (33.03)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period, as well as trading costs and slippage associated with quarterly rebalances.

During this same time period, the MSCI Emerging Markets Index (Net) (the “Benchmark Index”) returned (31.03)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 1,400 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of emerging market equities.

The performance of the Fund differed from the Benchmark Index because the Fund seeks to track an Index that employs a proprietary stock selection and weighting methodology, whereas

the Benchmark Index selects and weights stocks based on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the electronic components sub-industry and most underweight in the diversified banks sub-industry during the fiscal year ended October 31, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during the period can be attributed to the Fund being underweight in the diversified banks sub-industry and security selection in the semiconductors and apparel accessories & luxury goods sub-industries.

For the fiscal year ended October 31, 2022, the coal & consumable fuels sub-industry contributed most significantly to the Fund’s return, followed by the oil & gas exploration & production and drug retail sub-industries, respectively. The semiconductors sub-industry detracted most significantly from the Fund’s return, followed by the technology hardware storage & peripherals and apparel accessories & luxury goods sub-industries, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2022 included Turk Hava Yollari AO, an airlines company (portfolio average weight of 0.27%), and PT Indo Tambangraya Megah Tbk, a coal & consumable fuels company (portfolio average weight of 0.70%). Positions that detracted most significantly from the Fund’s return included Li Ning Co. Ltd., an apparel accessories & luxury goods company (portfolio average weight of 1.30%), and Frontken Corp. Bhd., a diversified support services company (portfolio average weight of 1.88%).

 

Sector Breakdown (% of the Fund’s Net Assets) as of October 31, 2022
Information Technology			17.22
Energy			16.08
Financials			15.83
Industrials			14.11
Consumer Staples			11.47
Consumer Discretionary			8.87
Materials			6.85
Utilities			4.69
Sector Types Each Less Than 3%			4.57
Money Market Funds Plus Other Assets Less Liabilities			0.31

Fund Inception: December 28, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.90% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

 

-	Net returns reflect reinvested dividends net of withholding taxes.

As an index fund, the Invesco FTSE RAFI Developed Markets ex-U.S. ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the FTSE RAFI^TM Developed ex U.S. 1000 Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index, as well as American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”) that represent securities in the Index.

Strictly in accordance with its guidelines and mandated procedures, FTSE International Limited (“FTSE”) in conjunction with Research Affiliates (“RA”, and together with FTSE, the “Index Provider”), compiles, maintains and calculates the Index, which is comprised of companies located in countries that are classified as “developed” within the country classification definition of FTSE, excluding the United States. The Index is designed to track the performance of non-U.S.-listed companies domiciled in developed markets countries with the largest cumulative scores (“Fundamental Value”), selected from the constituents of the FTSE Developed ex US Total Cap Index as determined by the Index Provider. The Index selects and weights companies based on their Fundamental Values, which are derived from the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The Fund generally invests in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended October 31, 2022, on a market price basis, the Fund returned (17.81)%. On a net asset value (“NAV”) basis, the Fund returned (17.95)%. During the same time period, the Index returned (17.79)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period, which were significantly offset by benefits to the Fund related to dividend tax treatment relative to the Index.

During this same time period, the MSCI EAFE^® Index (Net) (the “Benchmark Index”) returned (23.00)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 800 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the markets of economically developed countries outside of the U.S.

The performance of the Fund differed from the Benchmark Index in part because the Fund employs a fundamental weighting and stock selection methodology, whereas the Benchmark Index selects and weights stocks based on market capitalization.

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

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

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2022, included Shell PLC, an energy company (portfolio average weight of 2.28%), and BP PLC, an energy company (portfolio average weight of 1.50%). Positions that detracted most significantly from the Fund’s return included Samsung Electronics Co. Ltd., an information technology company (portfolio average weight of 1.28%), and Saipem S.p.A., an energy company (portfolio average weight of 0.21%).

 

Sector Breakdown (% of the Fund’s Net Assets) as of October 31, 2022
Financials			23.87
Industrials			12.77
Energy			11.88
Consumer Discretionary			9.49
Materials			8.90
Consumer Staples			8.32
Health Care			7.17
Communication Services			5.47
Information Technology			5.23
Utilities			4.52
Real Estate			2.04
Money Market Funds Plus Other Assets Less Liabilities			0.34

Fund Inception: June 25, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information.

According to the Fund’s current prospectus, the Fund’s expense ratio of 0.45% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

 

-	Net returns reflect reinvested dividends net of withholding taxes.

As an index fund, the Invesco FTSE RAFI Developed Markets ex- U.S. Small-Mid ETF (the “Fund) is passively managed and seeks to track the investment results (before fees and expenses) of the FTSE RAFI^TM Developed ex U.S. Mid-Small 1500 Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index, as well as American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”) that represent securities in the Index.

Strictly in accordance with its guidelines and mandated procedures, FTSE International Limited (“FTSE”) in conjunction with Research Affiliates LLC (“RA”, and together with FTSE, the “Index Provider”), compiles, maintains and calculates the Index, which is comprised of securities of small-and mid-capitalization companies that are classified as “developed” within the country classification definition of FTSE, excluding the United States. The Index is designed to track the performance of the small and mid- capitalization companies in developed markets based on their cumulative scores (“Fundamental Value”), selected from the constituents of the FTSE Developed ex US Total Cap Index, as determined by the Index Provider. The Index selects and weights companies based on their Fundamental Values, which are derived from the following four fundamental measures of firm size: book value, cash flow, sales and dividends. The Fund generally invests in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended October 31, 2022, on a market price basis, the Fund returned (28.21)%. On a net asset value (“NAV”) basis, the Fund returned (27.72)%. During the same time period, the Index returned (27.55)%. During the fiscal year the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period, which were significantly offset by benefits to the Fund related to dividend tax treatment relative to the Index.

During this same time period, the MSCI EAFE^® Small Cap Index (Net) (the “Benchmark Index”) returned (30.28)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 2,300 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of small capitalization companies located in markets of economically developed countries outside of the U.S.

The performance of the Fund differed from the Benchmark Index in part because the Fund employs a fundamental weighting and stock selection methodology, whereas the Benchmark Index selects and weights stocks based on market capitalization.

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

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

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2022 included D/S Norden A/S, an industrials company (portfolio average weight of 0.10%), and Enerplus Corp., an energy company (portfolio average weight of 0.16%). Positions that detracted most significantly from the Fund’s return included Banca Monte dei Paschi di Sienna S.p.A., a financials company (no longer held at fiscal year-end), and ADLER Group SA, a real estate company (portfolio average weight of 0.06%).

 

Sector Breakdown (% of the Fund’s Net Assets) as of October 31, 2022
Industrials			22.35
Consumer Discretionary			12.95
Materials			10.84
Real Estate			10.24
Financials			9.77
Information Technology			7.50
Consumer Staples			7.04
Health Care			5.86
Communication Services			5.25
Energy			5.23
Utilities			2.60
Money Market Funds Plus Other Assets Less Liabilities			0.37

Fund Inception: September 27, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information.

According to the Fund’s current prospectus, the Fund’s expense ratio of 0.49% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

 

-	Net returns reflect reinvested dividends net of withholding taxes.

As an index fund, the Invesco FTSE RAFI Emerging Markets ETF (the “Fund) is passively managed and seeks to track the investment results (before fees and expenses) of the FTSE RAFI^TM Emerging Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index, as well as American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”) that represent securities in the Index.

Strictly in accordance with its guidelines and mandated procedures, FTSE International Limited (“FTSE”) in conjunction with Research Affiliates LLC (“RA”, and together with FTSE, the “Index Provider”), compiles, maintains and calculates the Index, which is comprised of securities of companies located in countries that are classified as emerging markets within the country classification definition of FTSE. The Index includes securities of companies selected from the constituents of the FTSE Emerging Total Cap Index. The Index selects and weights its component securities based on their cumulative score (“Fundamental Value”), which is derived from the following four fundamental measures of firm size: book value, cash flows, sales and dividends. While the Fund generally seeks to invest in all of the securities comprising the Index in proportion to their weightings in the Index, at times the composition of the Index may make such “full replication” impracticable. In such circumstances, the Fund will utilize a “sampling” methodology to seek to achieve its investment objective.

For the fiscal year ended October 31, 2022, on a market price basis, the Fund returned (24.14)%. On a net asset value (“NAV”) basis, the Fund returned (24.47)%. During the same time period, the Index returned (24.20)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index during the period primarily due to Indian capital gains taxes incurred, as well as fees and expenses that the Fund incurred, which were significantly offset by benefits to the Fund related to dividend tax treatment and capital gains taxes in the Indian market relative to the Index.

During this same time period, the MSCI Emerging Markets Index (Net) (the “Benchmark Index”) returned (31.03)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 1,400 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of emerging market equities.

The performance of the Fund differed from the Benchmark Index in part because the Fund employs a fundamental weighting and stock selection methodology, whereas the Benchmark Index selects and weights stocks based on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the financials sector and most underweight in the information technology sector during the fiscal year ended October 31, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s underweight exposure to and security selection in the consumer discretionary and communication services sectors, as well as the Fund’s overweight exposure to the financials sector.

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

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2022 included Gazprom PJSC, an energy company (portfolio average weight of 2.40%), and Taiwan Semiconductor Manufacturing Co. Ltd., an information technology company (portfolio average weight of 4.69%). Positions that detracted most significantly from the Fund’s return included Sberbank Russia PJSC, a financials company (portfolio average weight of 0.69%), and Gazprom PJSC, an energy company (portfolio average weight of 0.96%),

As an emerging markets fund, the Fund had exposure to Russian securities with a weight of about 4.97% upon Russia’s invasion of the Ukraine (as of February 24, 2022). United States federal sanctions implemented as a response to the invasion have prohibited the buying and selling of all Russian securities. While Gazprom PJSC and LUKOIL PJSC, both Russian securities, are held within the portfolio, they have been marked down to a zero value as a result of the mentioned sanctions. In accordance with the federal law and sanctions, once the Fund is able to transact within the applicable market, the securities will be sold immediately at the prevailing market price.

 

Sector Breakdown (% of the Fund’s Net Assets) as of October 31, 2022
Financials			33.63
Energy			13.25
Information Technology			10.99
Materials			10.98
Consumer Discretionary			8.87
Communication Services			6.63
Consumer Staples			4.82
Utilities			4.40
Industrials			3.47
Sector Types Each Less Than 3%			2.74
Money Market Funds Plus Other Assets Less Liabilities			0.22

Fund Inception: September 27, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information.

According to the Fund’s current prospectus, the Fund’s expense ratio of 0.49% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

 

-	Net returns reflect reinvested dividends net of withholding taxes.

As an index fund, the Invesco Global Clean Energy ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the WilderHill New Energy Global Innovation Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index, as well as American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”) that represent securities in the Index.

Strictly in accordance with its guidelines and mandated procedures, WilderHill New Energy Finance LLC (the “Index Provider”) compiles and maintains the Index, which is comprised of securities of companies that are located in developed and emerging markets throughout the world and that are engaged in the business of the advancement of cleaner energy and conservation. The Index is comprised primarily of companies whose technologies focus on the generation and use of cleaner energy, conservation and efficiency, and the advancement of renewable energy in general, as determined by the Index Provider. The Index includes companies in wind, solar, biofuels, hydro, wave, tidal, geothermal and other relevant renewable energy businesses and those involved in energy conversion, storage, conservation, efficiency, materials relating to those activities, carbon and greenhouse gas reduction, pollution control, emerging hydrogen and fuel cells. The Fund generally invests in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended October 31, 2022, on a market price basis, the Fund returned (38.83)%. On a net asset value (“NAV”) basis, the Fund returned (38.52)%. During the same time period, the Index returned (38.75)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to income from the securities lending program in which the Fund participates, which were partially offset by fees and operating expenses that the Fund incurred during the period.

During this same time period, the MSCI EAFE^® Index (Net) (the “Benchmark Index”) returned (23.00)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 800 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the markets of economically developed countries outside of the U.S.

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

Relative to the Benchmark Index, the Fund was most overweight in the electrical components & equipment sub-industry and most underweight in the pharmaceuticals sub-industry during the fiscal year ended October 31, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during the period can be attributed to the Fund’s security selection in the electrical components & equipment and automobile manufacturers sub-industries. For the fiscal year ended October 31, 2022, the fertilizers & agricultural chemicals sub-industry contributed most significantly to the Fund’s return, followed by the motorcycle manufacturers sub-industry. The electrical components & equipment sub-industry detracted most significantly from the Fund’s return, followed by the automobile manufacturers sub-indsutry.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2022 included Sociedad Quimica y Minera de Chile S.A., Sponsored ADR, Pfd., Class B, a fertilizers & agricultural chemicals company (portfolio average weight of 0.90%), and Infrastructure & Energy Alternatives, Inc., a construction & engineering company (no longer held at fiscal year-end). Positions that detracted most significantly from the Fund’s return included XPeng, Inc., Sponsored ADR, Class A, an automobile manufacturers company (portfolio average weight of 0.75%), and ITM Power PLC, a heavy electrical equipment company (portfolio average weight of 0.70%).

 

Sub-Industry Breakdown (% of the Fund’s Net Assets) as of October 31, 2022
Electrical Components & Equipment			18.08
Renewable Electricity			15.52
Heavy Electrical Equipment			9.83
Semiconductors			7.42
Automobile Manufacturers			5.64
Semiconductor Equipment			5.36
Electric Utilities			4.91
Construction & Engineering			4.88
Diversified Metals & Mining			3.27
Specialty Chemicals			3.02
Sub-Industry Types Each Less than 3%			22.08
Money Market Funds Plus Other Assets Less Liabilities			(0.01)

Fund Inception: June 13, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.75% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

 

-	Net returns reflect reinvested dividends net of withholding taxes.

As an index fund, the Invesco Global Water ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Nasdaq OMX Global Water IndexSM (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index, as well as American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”) that are based on the securities in the Index.

Strictly in accordance with its guidelines and mandated procedures, Nasdaq, Inc. (“Nasdaq” or the “Index Provider”) compiles, maintains, and calculates the Index, which is comprised of securities of global exchange-listed companies located in the United States, as well as developed and emerging markets throughout the world, that create products designed to conserve and purify water for homes, businesses and industries. The Fund generally invests in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended October 31, 2022, on a market price basis, the Fund returned (25.02)%. On a net asset value (“NAV”) basis, the Fund returned (25.14)%. During the same time period, the Index returned (24.89)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses that the Fund incurred during the period, which were partially offset by the effects of compounding during a period of weak returns as well as benefits to the Fund related to dividend tax treatment relative to the Index.

During this same time period, the MSCI EAFE^® Index (Net) (the “Benchmark Index”) returned (23.00)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 800 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the markets of economically developed countries outside of the U.S.

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

Relative to the Benchmark Index, the Fund was most overweight in the industrial machinery sub-industry and most underweight in the pharmaceuticals sub-industry during the fiscal year ended October 31, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during the period can be attributed to the Fund’s overweight allocation to the building materials and industrial machinery sub-industries, respectively.

For the fiscal year ended October 31, 2022, the environmental & facilities services sub-industry contributed most significantly to the

Fund’s return, followed by the diversified support services sub-industry. The industrial machinery sub-industry detracted most significantly from the Fund’s return, followed by the building materials sub-industry.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2022 included Companhia de Saneamento Basico do Estado de Sao Paulo, a water utilities company (portfolio average weight of 2.55%), and Tetra Tech, Inc., an environmental & facilities services company (portfolio average weight of 0.69%). Positions that detracted most significantly from the Fund’s return included Pentair PLC, an industrial machinery company (portfolio average weight of 7.35%) and Geberit AG, a building products company (portfolio average weight of 6.19%).

 

Sector Breakdown (% of the Fund’s Net Assets) as of October 31, 2022
Industrials			45.54
Utilities			26.45
Health Care			11.82
Information Technology			11.45
Materials			3.95
Consumer Discretionary			0.60
Money Market Funds Plus Other Assets Less Liabilities			0.19
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of October 31, 2022
Security
Roper Technologies, Inc.			8.49
Ferguson PLC			7.77
Danaher Corp.			7.69
Pentair PLC			6.98
Geberit AG			6.18
Waters Corp.			4.13
Veolia Environnement S.A.			4.11
American Water Works Co., Inc.			4.03
Ecolab, Inc.			3.95
Xylem, Inc.			3.63
Total			56.96

 

*	Excluding money market fund holdings.

Fund Inception: June 13, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See the current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.75% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

 

-

The Blended-Nasdaq OMX Global Water IndexSM performance is comprised of the performance of the Palisades Global Water Index, the Fund’s previous underlying index prior to the conversion date, March 1, 2012, followed by the performance of the Index, starting from the conversion date through October 31, 2022.

 

-	Net returns reflect reinvested dividends net of withholding taxes.

As an index fund, the Invesco International BuyBack Achievers^TM ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Nasdaq International BuyBack Achievers^TM Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, Nasdaq, Inc. (“Nasdaq” or the “Index Provider”) compiles, maintains, and calculates the Index, which is comprised of the securities of foreign companies that are classified as “International BuyBack Achievers^TM” pursuant to the Index Provider’s proprietary selection methodology. To qualify as an “International BuyBack Achiever^TM,” a company must have effected a net reduction of 5% or more of its outstanding shares in its latest fiscal year. Additionally, to be eligible for inclusion in the Index, a security must: (i) be included in the NASDAQ Global Ex-US Index (a broad-based index designed to track the performance of the global equity market and whose component securities are issued by companies located throughout the world, excluding the United States); (ii) have a minimum market capitalization of $250 million; and (iii) have a minimum three-month average daily dollar trading volume of $1 million. The Fund generally invests in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended October 31, 2022, on a market price basis, the Fund returned (23.65)%. On a net asset value (“NAV”) basis, the Fund returned (23.55)%. During the same time period, the Index returned (23.29)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses incurred by the Fund during the period, which were significantly offset by benefits to the Fund related to dividend tax treatment relative to the Index.

During this same time period, the MSCI ACWI ex USA^® Index (Net) (the “Benchmark Index”) returned (24.73)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 2,300 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the developed and emerging equity markets outside of the U.S.

The performance of the Fund differed from the Benchmark Index in part because the Fund employs a modified market capitalization weighting methodology and selects stocks based on constituent companies engaging in stock buybacks, whereas the Benchmark Index selects and weights stocks based on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the communication services sector and most underweight in the

information technology sector during the fiscal year ended October 31, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s security selection in the consumer discretionary and industrials sectors. For the fiscal year ended October 31, 2022, the energy sector contributed most significantly to the Fund’s return. The financials sector detracted most significantly from Fund’s return followed by the real estate and communication services sectors, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2022 included Hitachi Transport System, Ltd., an industrials company (no longer held at fiscal year-end) and Element Fleet Management Corp., a financials company (portfolio average weight of 0.81). Positions that detracted most significantly from the Fund’s return included Aroundtown SA, a real estate company (no longer held at fiscal year-end) and Abrdn PLC, a financials company (no longer held at fiscal year-end).

 

Sector Breakdown (% of the Fund’s Net Assets) as of October 31, 2022
Financials			27.52
Materials			13.46
Energy			12.45
Communication Services			11.72
Consumer Discretionary			7.93
Consumer Staples			7.73
Information Technology			6.69
Health Care			5.03
Industrials			3.47
Sector Types Each Less Than 3%			3.51
Money Market Funds Plus Other Assets Less Liabilities			0.49
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of October 31, 2022
Security
SoftBank Group Corp.			5.99
Suncor Energy, Inc.			5.71
CGI, Inc., Class A			5.01
Dollarama, Inc.			4.84
Japan Post Holdings Co. Ltd.			4.79
Roche Holding AG			4.76
Dai-ichi Life Holdings, Inc.			4.72
Vale S.A.			4.52
Imperial Oil Ltd.			2.94
Carrefour S.A.			2.72
Total			46.00

 

*	Excluding money market fund holdings.