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Invesco Annual Report to Shareholders

 

 

August 31, 2023

 

  KBWB   Invesco KBW Bank ETF
  KBWD   Invesco KBW High Dividend Yield Financial ETF
  KBWY   Invesco KBW Premium Yield Equity REIT ETF
  KBWP   Invesco KBW Property & Casualty Insurance ETF
  KBWR   Invesco KBW Regional Banking ETF


 

Table of Contents

 

The Market Environment      3     
Management’s Discussion of Fund Performance      4     
Liquidity Risk Management Program      14     
Schedules of Investments      

Invesco KBW Bank ETF (KBWB)

     15     

Invesco KBW High Dividend Yield Financial ETF (KBWD)

     17     

Invesco KBW Premium Yield Equity REIT ETF (KBWY)

     19     

Invesco KBW Property & Casualty Insurance ETF (KBWP)

     21     

Invesco KBW Regional Banking ETF (KBWR)

     23     
Statements of Assets and Liabilities      25     
Statements of Operations      26     
Statements of Changes in Net Assets      28     
Financial Highlights      30     
Notes to Financial Statements      33     
Report of Independent Registered Public Accounting Firm      43     
Fund Expenses      44     
Tax Information      46     
Trustees and Officers      47     
Approval of Investment Advisory and Sub-Advisory Contracts      57     

 

 

   2   

 

 

 

 


 

The Market Environment

 

Domestic Equity

At the start of the fiscal year, volatility in the equity markets increased. US equity markets rose in August 2022 until the US Federal Reserve (the Fed) chairman Jerome Powell gave hawkish comments at an economic policy symposium held in Jackson Hole, sparking 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.1 After a continued decline in September 2022, US equity markets rebounded in October and November, despite mixed data on the economy and corporate earnings. However, the Fed’s message of continued rate hikes until data shows inflation meaningfully declining sent markets lower in December. As energy prices declined, the rate of inflation slowed modestly in the fourth quarter of 2022. Corporate earnings generally met expectations, though companies provided cautious future guidance. With inflation still at multi-decade highs and little evidence of a slowing economy, the Fed raised its target rate by 0.75% in November and by 0.50% in December.1

US equities managed to deliver gains in the first quarter of 2023 despite significant volatility and a banking crisis. A January rally gave way to a February selloff as higher-than-expected inflation, a tight labor market and solid economic growth indicated that the Fed’s monetary policy would remain tight for the foreseeable future, raising the risk of a deeper than expected recession. In March, the failure of two US regional banks, Silicon Valley Bank and Signature Bank, prompted steep losses in the banking sector. The subsequent takeover of Credit Suisse and ongoing fear that bank troubles would spread sent investors to safe-haven assets, sparking a bond rally, particularly among securities at the short end of the yield curve. With instability in the banking sector, the Fed raised the federal funds rate by only 0.25% in February of 2023 and again in March.1 The Fed’s actions to stabilize the banking system in March sent markets higher, so equities were surprisingly resilient despite the turmoil.

The US economy and equity markets remained resilient in the second quarter of 2023, as milder inflation data and better-than-expected corporate earnings supported equities, with most major indexes posting gains for the quarter and with some big tech names providing optimistic future guidance. The Consumer Price Index (CPI) rose 4% as of May 31, 2023, the smallest 12-month increase in nearly two years.2 The labor market maintained momentum in the second quarter with unemployment still at historic lows despite a slight uptick at the end of May. Facing persistently strong employment data, the Fed raised the federal funds rate by 0.25% at its May meeting, but investors got a long-awaited “pause” in rate hikes as the Fed left rates unchanged at its June meeting, sending equity

markets higher. However, the Fed raised rates another 0.25% in July, bringing the rate to its highest level since June 2006.1 After two months of gains, equity markets declined in August as a resilient economy complicated the Fed’s efforts to tame inflation. While inflation has slowed from its peak in June 2022, the highest level since 1981, the CPI rose by 0.2% in July and the 12-month headline inflation rate rose to 3.2% from 3% in June.2 At its annual Jackson Hole symposium in August 2023, Fed chair Jerome Powell remarked that while progress has been made, inflation is still too high, and the Fed intends “to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”

Despite higher rates and increased market volatility, US stocks for the fiscal year had strong returns of 15.94%, as measured by the S&P 500 Index.3

 

1 

Source: US Federal Reserve

2 

Source: US Bureau of Labor Statistics

3 

Source: Lipper Inc.

 

   3   

 

 

 

 


 

 

KBWB    Management’s Discussion of Fund Performance
   Invesco KBW Bank ETF (KBWB)

 

As an index fund, the Invesco KBW Bank ETF (the “Fund”) seeks to track the investment results (before fees and expenses) of the KBW Nasdaq Bank IndexTM (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, Keefe, Bruyette & Woods, Inc. and Nasdaq, Inc. (the “Index Provider”) compile, maintain and calculate the Index, which is a modified-market capitalization-weighted index of companies primarily engaged in U.S. banking activities, as determined by the Index Provider. The Index is designed to track the performance of large national U.S. money centers, regional banks and thrift institutions that are publicly traded in the U.S. 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 August 31, 2023, on a market price basis, the Fund returned (20.32)%. On a net asset value (“NAV”) basis, the Fund returned (20.21)%. During the same time period, the Index returned (19.98)%. 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 Fund holding cash to pay distributions in March, which coincided with the overall market decline.

During this same time period, the S&P 500® Financials Index (the “Benchmark Index”) returned 6.40%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 72 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 financial sector of the U.S. equity market.

The performance of the Fund differed from the Benchmark Index in part because the Benchmark Index is broadly diversified across all financial sub-industries and is not concentrated just in the banking sub-industry.

Relative to the Benchmark Index, the Fund was most overweight in the diversified banks sub-industry and most underweight in the multi-sector holdings sub-industry during the fiscal year ended August 31, 2023. 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 regional banks sub-industry and security selection within the diversified banks sub-industry, respectively.

For the fiscal year ended August 31, 2023, consumer finance was the only sub-industry that contributed positively to the Fund’s return. The regional banks sub-industry detracted most significantly from the Fund’s return during the period, followed by the diversified banks sub-industry.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2023, included JPMorgan Chase & Co., a diversified banks company (portfolio average weight of 8.83%) and Capital One Financial Corp., a consumer finance company (portfolio average weight of 4.16%). Positions that detracted most significantly from the Fund’s return included SVB Financial Group, a diversified banks company (no longer held at fiscal year-end) and First Republic Bank, a regional banks company (no longer held at fiscal year-end).

 

Sub-Industry Breakdown
(% of the Fund’s Net Assets)
as of August 31, 2023
 
Diversified Banks      43.74  
Regional Banks      25.17  
Investment Banking & Brokerage      15.36  
Asset Management & Custody Banks      11.86  
Consumer Finance      3.67  
Money Market Funds Plus Other Assets Less Liabilities      0.20  
Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2023
 
Security   
JPMorgan Chase & Co.      8.06  
Morgan Stanley      7.79  
Wells Fargo & Co.      7.76  
Bank of America Corp.      7.72  
Goldman Sachs Group, Inc. (The)      7.57  
U.S. Bancorp      4.57  
Bank of New York Mellon Corp. (The)      4.17  
Fifth Third Bancorp      4.09  
Regions Financial Corp.      3.97  
Huntington Bancshares, Inc.      3.94  
Total      59.64  

 

*

Excluding money market fund holdings.

 

 

  4  

 


 

Invesco KBW Bank ETF (KBWB) (continued)

 

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2023

 

   

1 Year

    3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
KBW Nasdaq Bank IndexTM     (19.98 )%      5.26     16.61     (2.84 )%      (13.40 )%      5.46     70.10       9.36     188.33
S&P 500® Financials Index     6.40       13.42       45.89       6.24       35.37       10.34       167.43         12.88       319.20  
Fund                    
NAV Return     (20.21     4.91       15.45       (3.13     (14.71     5.10       64.47         8.99       176.98  
Market Price Return     (20.32     4.83       15.20       (3.13     (14.71     5.11       64.61         9.00       177.31  

 

Fund Inception: November 1, 2011

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

According to the Fund’s current prospectus, the Fund’s expense ratio of 0.35% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not

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

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

Notes Regarding Indexes and Fund Performance History:

 

-

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

 

 

  5  

 


 

 

KBWD    Management’s Discussion of Fund Performance
   Invesco KBW High Dividend Yield Financial ETF (KBWD)

 

As an index fund, the Invesco KBW High Dividend Yield Financial ETF (the “Fund”) seeks to track the investment results (before fees and expenses) of the KBW Nasdaq Financial Sector Dividend Yield IndexTM (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, Keefe, Bruyette & Woods, Inc. and Nasdaq, Inc. (the “Index Provider”) compile, maintain and calculate the Index, which is a modified-dividend yield-weighted index of companies principally engaged in the business of providing financial services and products, as determined by the Index Provider. The Index is designed to track the performance of financial companies, which may include business development companies and real estate investment trusts (“REITs”), with competitive dividend yields that are publicly-traded in the U.S. 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 August 31, 2023, on a market price basis, the Fund returned 4.49%. On a net asset value (“NAV”) basis, the Fund returned 4.56%. During the same time period, the Index returned 5.15%. During the fiscal year, the Fund utilized sampling for certain holdings. 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 the effects of sampling.

During this same time period, the S&P 500® Financials Index (the “Benchmark Index”) returned 6.40%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 72 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 financial sector of the U.S. equity market.

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

Relative to the Benchmark Index, the Fund was most overweight in the mortgage REITs sub-industry and most underweight in the diversified banks sub-industry during the fiscal year ended August 31, 2023. 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 mortgage REITs and multi-sector holdings sub-industries, respectively.

For the fiscal year ended August 31, 2023, the asset management & custody banks sub-industry contributed most significantly to the Fund’s return, followed by the investment banking & brokerage sub-industry. The diversified REITs sub-industry detracted most significantly from the Fund’s return during the period, followed by the mortgage REITs sub-industry.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2023, included Trinity Capital, Inc., a closed-end fund (portfolio average weight of 2.44%) and Capital Southwest Corp., a closed-end fund (portfolio average weight of 2.04%). Positions that detracted most significantly from the Fund’s return included Broadmark Realty Capital Inc., a diversified REITs company (no longer held at fiscal year-end) and NewtekOne, Inc., a diversified financial services company (portfolio average weight of 2.34%).

 

Sub-Industry Breakdown
(% of the Fund’s Net Assets)
as of August 31, 2023
 
Mortgage REITs      39.87  
Closed-End Funds      30.22  
Investment Banking & Brokerage      6.41  
Asset Management & Custody Banks      5.36  
Regional Banks      4.84  
Diversified Financial Services      4.14  
Consumer Finance      3.26  
Sub-Industry Types Each Less Than 3%      5.53  
Money Market Funds Plus Other Assets Less Liabilities      0.37  
Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2023
 
Security   
Chimera Investment Corp.      4.80  
Two Harbors Investment Corp.      4.28  
ARMOUR Residential REIT, Inc.      3.75  
Orchid Island Capital, Inc.      3.71  
TPG RE Finance Trust, Inc.      3.61  
Trinity Capital, Inc.      3.45  
AGNC Investment Corp.      3.38  
CION Investment Corp.      3.26  
Dynex Capital, Inc.      3.21  
Bain Capital Specialty Finance, Inc., BDC      3.17  
Total      36.62  

 

*

Excluding money market fund holdings.

 

 

  6  

 


 

Invesco KBW High Dividend Yield Financial ETF (KBWD) (continued)

 

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2023

 

   

1 Year

    3 Years
Average
Annualized
    3 Years
Cumulative
    5 Years
Average
Annualized
    5 Years
Cumulative
    10 Years
Average
Annualized
    10 Years
Cumulative
          Fund Inception  
Index         Average
Annualized
    Cumulative  
KBW Nasdaq Financial Sector Dividend Yield IndexTM     5.15     16.11     56.53     1.86     9.67     5.20     66.06       6.45     121.70
S&P 500® Financials Index     6.40       13.42       45.89       6.24       35.37       10.34       167.43         10.60       261.26  
Fund                    
NAV Return     4.56       15.63       54.61       1.78       9.20       5.05       63.66         6.22       115.82  
Market Price Return     4.49       15.57       54.38       1.76       9.13       5.05       63.64         6.23       116.03  

 

Fund Inception: December 2, 2010

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 3.84% includes the unitary management fee of 0.35% and acquired fund fees and expenses of 3.49%. 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 indexes are based on the inception date of the Fund.

 

 

  7  

 


 

 

KBWY    Management’s Discussion of Fund Performance
   Invesco KBW Premium Yield Equity REIT ETF (KBWY)

 

As an index fund, the Invesco KBW Premium Yield Equity REIT ETF (the “Fund”) seeks to track the investment results (before fees and expenses) of the KBW Nasdaq Premium Yield Equity REIT IndexTM (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, Keefe, Bruyette & Woods, Inc. and Nasdaq, Inc. (the “Index Provider”) compile, maintain and calculate the Index, which is a modified-dividend yield-weighted index of domestic equity real estate investment trusts (“REITs”) of small- and mid-capitalization, as determined by the Index Provider. The Index is designed to track the performance of small- and mid-capitalization domestic equity REITs that have competitive dividend yields and are publicly-traded in the U.S. 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 August 31, 2023, on a market price basis, the Fund returned (5.85)%. On a net asset value (“NAV”) basis, the Fund returned (5.72)%. During the same time period, the Index returned (5.37)%. 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 expenses incurred during the period.

During this same time period, the Dow Jones U.S. Real Estate Index (the “Benchmark Index”) returned (6.41)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 77 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 United States REIT market.

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

Relative to the Benchmark Index, the Fund was most overweight in the office REITs sub-industry and most underweight in the telecom tower REITs sub-industry during the fiscal year ended August 31, 2023. 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 the telecom tower REITs sub-industry and security selection in the retail REITs sub-industry.

For the fiscal year ended August 31, 2023, the retail REITs sub-industry contributed most significantly to the Fund’s return, followed by the other specialized REITs sub-industry. The office REITs sub-industry detracted most significantly from the Fund’s return during the period, followed by the health care REITs sub-industry.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2023, included Uniti Group, Inc., an other specialized REITs company (portfolio average weight of 2.90%), and Hudson Pacific Properties, Inc., an office REITs company (portfolio average weight of 3.22%). Positions that detracted most significantly from the Fund’s return included Office Properties Income Trust, an office REITs company (portfolio average weight of 5.18%) and Medical Properties Trust, Inc., a health care REITs company (portfolio average weight of 4.00%).

 

REIT Sub-Industry Breakdown
(% of the Fund’s Net Assets)
as of August 31, 2023
 
Office REITs      27.54  
Health Care REITs      16.50  
Other Specialized REITs      15.94  
Diversified REITs      13.49  
Retail REITs      7.87  
Industrial REITs      7.64  
Hotel & Resort REITs      5.49  
Sub-Industry Types Each Less Than 3%      5.31  
Money Market Funds Plus Other Assets Less Liabilities      0.22  
Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2023
 
Security   
Hudson Pacific Properties, Inc.      9.81  
Brandywine Realty Trust      7.95  
Uniti Group, Inc.      7.23  
SL Green Realty Corp.      6.11  
Global Net Lease, Inc.      4.72  
Innovative Industrial Properties, Inc.      4.66  
Necessity Retail REIT, Inc. (The)      4.19  
Sabra Health Care REIT, Inc.      3.97  
Gladstone Commercial Corp.      3.87  
Office Properties Income Trust      3.67  
Total      56.18  

 

*

Excluding money market fund holdings.

 

 

  8  

 


 

Invesco KBW Premium Yield Equity REIT ETF (KBWY) (continued)

 

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2023

 

   

1 Year

   

3 Years

Average
Annualized

   

3 Years

Cumulative

   

5 Years

Average
Annualized

   

5 Years

Cumulative

   

10 Years

Average
Annualized

   

10 Years

Cumulative

          Fund Inception  
Index         Average
Annualized
    Cumulative  
KBW Nasdaq Premium Yield Equity REIT IndexTM     (5.37 )%      8.29     27.00     (4.84 )%      (21.97 )%      2.86     32.61       4.79     81.46
Dow Jones U.S. Real Estate Index     (6.41     3.96       12.35       3.60       19.37       7.08       98.26         7.52       151.84  
Fund                    
NAV Return     (5.72     8.05       26.16       (4.84     (21.98     2.68       30.25         4.54       76.17  
Market Price Return     (5.85     7.98       25.89       (4.85     (22.02     2.69       30.36         4.55       76.38  

 

Fund Inception: December 2, 2010

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

According to the Fund’s current prospectus, the Fund’s expense ratio of 0.35% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not

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

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

Notes Regarding Indexes and Fund Performance History:

 

-

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

 

 

  9  

 


 

 

KBWP    Management’s Discussion of Fund Performance
   Invesco KBW Property & Casualty Insurance ETF (KBWP)

 

As an index fund, the Invesco KBW Property & Casualty Insurance ETF (the “Fund”) seeks to track the investment results (before fees and expenses) of the KBW Nasdaq Property & Casualty IndexTM (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, Keefe, Bruyette & Woods, Inc. and Nasdaq, Inc. (the “Index Provider”) compile, maintain and calculate the Index, which is a modified-market capitalization-weighted index designed to track the performance of companies primarily engaged in U.S. property and casualty insurance activities, as determined by the Index Provider. 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 August 31, 2023, on a market price basis, the Fund returned 10.00%. On a net asset value (“NAV”) basis, the Fund returned 10.15%. During the same time period, the Index returned 10.52%. 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 S&P 500® Property & Casualty Index (the “Benchmark Index”) returned 8.30%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 10 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 United States property and casualty insurance market.

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

Relative to the Benchmark Index, the Fund was most overweight in the multi-line insurance sub-industry and most underweight in the property & casualty insurance sub-industry during the fiscal year ended August 31, 2023. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s underweight allocation to the property & casualty insurance sub-industry.

For the fiscal year ended August 31, 2023, the property & casualty insurance sub-industry contributed most significantly to the Fund’s return during the period. There were no sub-industries that detracted from the Fund’s return during the period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2023, included Arch Capital Group Ltd., a property & casualty insurance company (portfolio average weight of 4.33%), and RenaissanceRe Holdings Ltd., a reinsurance company (portfolio average weight of 4.16%). Positions that detracted most significantly from the Fund’s return included Hanover Insurance Group, Inc. (The), a property & casualty insurance company (portfolio average weight of 3.84%) and Allstate Corp. (The), a property & casualty insurance company (portfolio average weight of 7.84%).

 

Sub-Industry Breakdown
(% of the Fund’s Net Assets)
as of August 31, 2023
 
Property & Casualty Insurance      71.47  
Multi-line Insurance      18.36  
Reinsurance      10.14  
Money Market Funds Plus Other Assets Less Liabilities      0.03  
Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2023
 
Security   
American International Group, Inc.      8.45  
Chubb Ltd.      8.24  
Progressive Corp. (The)      7.96  
Allstate Corp. (The)      7.58  
Travelers Cos., Inc. (The)      7.26  
Assurant, Inc.      4.43  
W.R. Berkley Corp.      4.24  
Arch Capital Group Ltd.      4.20  
Cincinnati Financial Corp.      4.18  
RLI Corp.      4.05  
Total      60.59  

 

*

Excluding money market fund holdings.

 

 

  10  

 


 

Invesco KBW Property & Casualty Insurance ETF (KBWP) (continued)

 

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2023

 

   

1 Year

   

3 Years

Average
Annualized

   

3 Years

Cumulative

   

5 Years

Average
Annualized

   

5 Years

Cumulative

   

10 Years

Average
Annualized

   

10 Years

Cumulative

          Fund Inception  
Index         Average
Annualized
    Cumulative  
KBW Nasdaq Property & Casualty IndexTM     10.52     14.33     49.43     8.20     48.30     11.89     207.47       12.67     357.46
S&P 500® Property & Casualty Index     8.30       16.51       58.15       10.95       68.15       13.68       260.40         13.83       421.27  
Fund                    
NAV Return     10.15       13.97       48.02       7.87       46.04       11.51       197.38         12.29       338.02  
Market Price Return     10.00       13.91       47.79       7.85       45.90       11.53       197.66         12.29       338.14  

 

Fund Inception: December 2, 2010

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

According to the Fund’s current prospectus, the Fund’s expense ratio of 0.35% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not

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

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

Notes Regarding Indexes and Fund Performance History:

 

-

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

 

 

  11  

 


 

 

KBWR    Management’s Discussion of Fund Performance
   Invesco KBW Regional Banking ETF (KBWR)

 

As an index fund, the Invesco KBW Regional Banking ETF (the “Fund”) seeks to track the investment results (before fees and expenses) of the KBW Nasdaq Regional Banking IndexTM (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, Keefe, Bruyette & Woods, Inc. and Nasdaq, Inc. (the “Index Provider”) compile, maintain and calculate the Index, which is a modified-market capitalization-weighted index comprised of companies primarily engaged in U.S. regional banking activities, as determined by the Index Provider. The Index is designed to track the performance of U.S. regional banking and thrift companies that are publicly-traded in the U.S. 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 August 31, 2023, on a market price basis, the Fund returned (16.79)%. On a net asset value (“NAV”) basis, the Fund returned (16.65)%. During the same time period, the Index returned (16.42)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to the fees and expenses that the Fund incurred during the period.

During this same time period, the S&P Composite 1500® Commercial Banks Index (the “Benchmark Index”) returned (7.88)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 100 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 United States commercial banking market.

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

Relative to the Benchmark Index, the Fund was most overweight in the regional banks sub-industry and most underweight in the diversified banks sub-industry during the fiscal year ended August 31, 2023. 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 regional banks sub-industry.

For the fiscal year ended August 31, 2023, the regional banks sub-industry detracted most significantly from the Fund’s return. There were no sub-industries that contributed positively to the Fund’s return during the period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2023, included New York Community Bancorp, Inc., a regional banks company (portfolio average weight of 2.54%), and Bank OZK, a regional banks company (portfolio average weight of 2.04%). Positions that detracted most significantly from the Fund’s return included PacWest Bancorp, a regional banks company (portfolio average weight of 1.36%) and Commerce Bancshares, Inc., a regional banks company (portfolio average weight of 3.98%).

 

Sub-Industry Breakdown
(% of the Fund’s Net Assets)
as of August 31, 2023
 
Regional Banks      99.84  
Money Market Funds Plus Other Assets Less Liabilities      0.16  
Top Ten Fund Holdings*
(% of the Fund’s Net Assets)
as of August 31, 2023
 
Security   
New York Community Bancorp, Inc.      4.15  
Webster Financial Corp.      4.14  
Commerce Bancshares, Inc.      3.55  
Cullen/Frost Bankers, Inc.      3.27  
BOK Financial Corp.      3.27  
Pinnacle Financial Partners, Inc.      2.38  
Texas Capital Bancshares, Inc.      2.29  
Ameris Bancorp      2.24  
Cadence Bank      2.21  
Valley National Bancorp      2.16  
Total      29.66  

 

*

Excluding money market fund holdings.

 

 

  12  

 


 

Invesco KBW Regional Banking ETF (KBWR) (continued)

 

Growth of a $10,000 Investment

 

 

LOGO

Fund Performance History as of August 31, 2023

 

   

1 Year

   

3 Years

Average
Annualized

   

3 Years

Cumulative

   

5 Years

Average
Annualized

   

5 Years

Cumulative

   

10 Years

Average
Annualized

   

10 Years

Cumulative

          Fund Inception  
Index         Average
Annualized
    Cumulative  
KBW Nasdaq Regional Banking IndexTM     (16.42 )%      13.15     44.85     (1.52 )%      (7.35 )%      5.99     78.90       9.15     181.80
S&P Composite 1500® Commercial Banks Index     (7.88     9.30       30.57       (0.43     (2.13     7.19       100.32         10.69       232.42  
Fund                    
NAV Return     (16.65     12.78       43.44       (1.81     (8.71     5.63       73.01         8.79       171.03  
Market Price Return     (16.79     12.72       43.20       (1.82     (8.79     5.63       72.97         8.81       171.40  

 

Fund Inception: November 1, 2011

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

According to the Fund’s current prospectus, the Fund’s expense ratio of 0.35% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not

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

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

Notes Regarding Indexes and Fund Performance History:

 

-

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

 

 

  13  

 


 

Liquidity Risk Management Program

The Securities and Exchange Commission (“SEC”) has adopted Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”) in order to promote effective liquidity risk management throughout the open-end investment company industry, thereby reducing the risk that funds will be unable to meet their redemption obligations and mitigating dilution of the interests of fund shareholders. The Funds have adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the “Program”). The Program is reasonably designed to assess and manage the Funds’ liquidity risk, which is the risk that the Funds could not meet redemption requests without significant dilution of remaining investors’ interests in the Funds. The Board of Trustees of the Funds (the “Board”) has appointed Invesco Capital Management LLC (“Invesco”), the Funds’ investment adviser, as the Program’s administrator, and Invesco has delegated oversight of the Program to the Liquidity Risk Management Committee (the “Committee”), which is composed of senior representatives from relevant business groups at Invesco and its affiliates.

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

At a meeting held on March 24, 2023, the Committee presented a report to the Board that addressed the operation of the Program and assessed the Program’s adequacy and effectiveness of implementation (the “Report”). The Report covered the period from January 1, 2022 through December 31, 2022 (the “Program Reporting Period”). The Report discussed notable events affecting liquidity over the Program Reporting Period, including the impact of the Russia-Ukraine War, and resulting sanctions, inflation concerns and the overall market. The Report noted that there were no material changes to the Program during the Program Reporting Period.

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

 

   

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

 

   

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

 

   

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

 

   

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

 

   

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

 

   14   

 

 

 

 


 

Invesco KBW Bank ETF (KBWB)

August 31, 2023

Schedule of Investments(a)

 

         Shares         Value    

Common Stocks & Other Equity Interests-99.80%

 

Asset Management & Custody Banks-11.86%

 

  

Bank of New York Mellon Corp. (The)

     1,636,398      $    73,425,178  

Northern Trust Corp.

     902,482        68,651,806  

State Street Corp.

     967,394        66,498,664  
     

 

 

 
        208,575,648  
     

 

 

 

Consumer Finance-3.67%

     

Capital One Financial Corp.

     631,009        64,609,011  
     

 

 

 

Diversified Banks-43.74%

     

Bank of America Corp.

     4,734,677        135,743,189  

Citigroup, Inc.

     1,483,707        61,262,262  

Comerica, Inc.(b)

     570,538        27,448,583  

Fifth Third Bancorp

     2,711,240        71,983,422  

JPMorgan Chase & Co.

     969,560        141,875,715  

KeyCorp

     4,051,994        45,909,092  

PNC Financial Services Group, Inc. (The)

     567,716        68,540,353  

U.S. Bancorp(b)

     2,200,124        80,370,530  

Wells Fargo & Co.

     3,305,086        136,467,001  
     

 

 

 
        769,600,147  
     

 

 

 

Investment Banking & Brokerage-15.36%

 

  

Goldman Sachs Group, Inc. (The)

     406,187        133,111,542  

Morgan Stanley

     1,609,389        137,039,473  
     

 

 

 
        270,151,015  
     

 

 

 

Regional Banks-25.17%

     

Citizens Financial Group, Inc.

     2,096,622        58,977,977  

East West Bancorp, Inc.

     612,800        33,912,352  

First Horizon Corp.

     2,329,928        29,240,597  
         Shares         Value    

Regional Banks-(continued)

     

Huntington Bancshares, Inc.

     6,253,745      $ 69,354,032  

M&T Bank Corp.

     551,987        69,025,974  

Regions Financial Corp.

     3,807,757        69,834,263  

Truist Financial Corp.

     2,158,183        65,932,491  

Western Alliance Bancorporation(b)

     474,539        23,731,695  

Zions Bancorporation N.A.(b)

     641,905        22,787,628  
     

 

 

 
        442,797,009  
     

 

 

 

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)-99.80%
(Cost $2,217,076,799)

 

     1,755,732,830  
     

 

 

 
Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds-1.86%

 

Invesco Private Government Fund,
5.30%(c)(d)(e)

     9,165,896        9,165,896  

Invesco Private Prime Fund, 5.51%(c)(d)(e)

     23,569,447        23,569,447  
     

 

 

 

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $32,735,484)

 

     32,735,343  
  

 

 

 

TOTAL INVESTMENTS IN SECURITIES-101.66%
(Cost $2,249,812,283)

 

     1,788,468,173  

OTHER ASSETS LESS LIABILITIES-(1.66)%

 

     (29,140,710
  

 

 

 

NET ASSETS-100.00%

 

   $ 1,759,327,463  
     

 

 

 

 

Notes to Schedule of Investments:

(a) 

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

(b) 

All or a portion of this security was out on loan at August 31, 2023.

(c) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended August 31, 2023.

 

     Value
August 31, 2022
   Purchases
at Cost
   Proceeds
from Sales
  Change in
Unrealized
Appreciation
(Depreciation)
  Realized
Gain
   Value
August 31, 2023
   Dividend
Income
Investments in Affiliated Money Market Funds:                                 
Invesco Government & Agency Portfolio, Institutional Class      $ -      $ 72,659,273      $ (72,659,273 )     $ -     $ -      $ -      $ 28,743
Investments Purchased with Cash Collateral from Securities on Loan:                                 
Invesco Private Government Fund        6,003,556        267,533,996        (264,371,656 )       -       -        9,165,896        316,857 *
Invesco Private Prime Fund        15,437,715        556,121,751        (547,991,893 )       (1,017 )       2,891        23,569,447        847,901 *
    

 

 

      

 

 

      

 

 

     

 

 

     

 

 

      

 

 

      

 

 

 
Total      $ 21,441,271      $ 896,315,020      $ (885,022,822 )     $ (1,017 )     $ 2,891      $ 32,735,343      $ 1,193,501
    

 

 

      

 

 

      

 

 

     

 

 

     

 

 

      

 

 

      

 

 

 

 

*

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statements of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

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

 

   15   

 

 

 

 


 

Invesco KBW Bank ETF (KBWB)–(continued)

August 31, 2023

 

(d) 

The rate shown is the 7-day SEC standardized yield as of August 31, 2023.

(e) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 2I.

 

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

 

   16   

 

 

 

 


 

Invesco KBW High Dividend Yield Financial ETF (KBWD)

August 31, 2023

Schedule of Investments(a)

 

         Shares         Value    

Common Stocks & Other Equity Interests-69.41%

 

Asset Management & Custody Banks-5.36%

 

  

Artisan Partners Asset Management, Inc., Class A(b)

     149,711      $ 5,751,897  

GCM Grosvenor, Inc., Class A

     708,408        5,412,237  

Janus Henderson Group PLC(b)

     173,145        4,756,293  

Patria Investments Ltd., Class A (Cayman Islands)(b)

     318,503        4,592,813  
     

 

 

 
        20,513,240  
     

 

 

 

Consumer Finance-3.26%

 

  

Ally Financial, Inc.

     129,319        3,580,843  

OneMain Holdings, Inc.

     213,909        8,879,363  
     

 

 

 
        12,460,206  
     

 

 

 

Diversified Banks-1.63%

 

  

Bank of NT Butterfield & Son Ltd. (The) (Bermuda)

     214,649        6,250,579  
     

 

 

 

Diversified Financial Services-4.14%

 

  

Jackson Financial, Inc., Class A

     247,754        9,315,550  

NewtekOne, Inc.(b)

     364,206        6,522,930  
     

 

 

 
        15,838,480  
     

 

 

 

Investment Banking & Brokerage-6.41%

 

  

B. Riley Financial, Inc.(b)

     234,234        11,993,952  

Lazard Ltd., Class A(b)

     186,251        6,470,360  

Moelis & Co., Class A(b)

     128,276        6,081,565  
     

 

 

 
        24,545,877  
     

 

 

 

Life & Health Insurance-2.11%

 

  

Lincoln National Corp.

     315,266        8,089,725  
     

 

 

 

Mortgage REITs-39.87%

 

  

AGNC Investment Corp.

     1,306,957        12,951,944  

Annaly Capital Management, Inc.(b)

     559,112        11,333,200  

ARMOUR Residential REIT, Inc.(b)

     2,920,072        14,337,554  

Chimera Investment Corp.(b)

     3,035,449        18,364,466  

Dynex Capital, Inc.(b)

     946,500        12,266,640  

Ellington Financial, Inc.

     877,420        11,731,105  

MFA Financial, Inc.

     958,706        10,507,418  

Orchid Island Capital, Inc.

     1,480,611        14,199,060  

PennyMac Mortgage Investment Trust(b)

     905,199        12,138,719  

Ready Capital Corp.(b)

     419,972        4,586,094  

TPG RE Finance Trust, Inc.(b)

     1,836,516        13,810,600  

Two Harbors Investment Corp.(b)

     1,188,775        16,369,432  
     

 

 

 
        152,596,232  
     

 

 

 

Regional Banks-4.84%

 

  

Central Pacific Financial Corp.

     373,476        6,337,887  
         Shares         Value    

Regional Banks-(continued)

 

  

New York Community Bancorp, Inc.

     493,235      $ 6,056,926  

Northwest Bancshares, Inc.(b)

     555,155        6,106,705  
     

 

 

 
        18,501,518  
     

 

 

 

Transaction & Payment Processing Services-1.79%

 

  

Western Union Co. (The)(b)

     555,409        6,859,301  
     

 

 

 

Total Common Stocks & Other Equity Interests
(Cost $277,045,747)

 

     265,655,158  
     

 

 

 
Closed-End Funds-30.22%

 

Bain Capital Specialty Finance, Inc., BDC(b)

     771,385        12,149,314  

Capital Southwest Corp., BDC

     494,403        10,906,530  

CION Investment Corp., BDC

     1,164,891        12,487,632  

FS KKR Capital Corp., BDC

     524,093        10,722,943  

Goldman Sachs BDC, Inc., BDC(b)

     796,691        11,488,284  

MidCap Financial Investment Corp., BDC

     859,939        11,652,174  

PennantPark Investment Corp., BDC

     1,826,286        12,090,013  

SLR Investment Corp., BDC(b)

     649,709        9,882,074  

Trinity Capital, Inc., BDC(b)

     901,971        13,213,875  

TriplePoint Venture Growth BDC Corp., BDC(b)

     992,509        11,056,550  
     

 

 

 
        115,649,389  
     

 

 

 

Total Closed-End Funds
(Cost $105,173,215)

 

     115,649,389  
     

 

 

 

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)-99.63%
(Cost $382,218,962)

 

     381,304,547  
     

 

 

 
Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds-26.27%

 

Invesco Private Government Fund,
5.30%(c)(d)(e)

     28,150,755        28,150,755  

Invesco Private Prime Fund, 5.51%(c)(d)(e)

     72,387,657        72,387,657  
     

 

 

 

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $100,539,021)

 

     100,538,412  
     

 

 

 

TOTAL INVESTMENTS IN SECURITIES-125.90%
(Cost $482,757,983)

 

     481,842,959  

OTHER ASSETS LESS LIABILITIES-(25.90)%

 

     (99,137,248
     

 

 

 

NET ASSETS-100.00%

      $ 382,705,711  
     

 

 

 

 

Investment Abbreviations:

BDC -Business Development Company

REIT -Real Estate Investment Trust

 

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

 

   17   

 

 

 

 


 

Invesco KBW High Dividend Yield Financial ETF (KBWD)–(continued)

August 31, 2023

 

Notes to Schedule of Investments:

(a) 

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

(b) 

All or a portion of this security was out on loan at August 31, 2023.

(c) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended August 31, 2023.

 

     Value
August 31, 2022
   Purchases
at Cost
   Proceeds
from Sales
  Change in
Unrealized
Appreciation
(Depreciation)
  Realized
Gain
   Value
August 31, 2023
   Dividend
Income
Investments in Affiliated Money Market Funds:                                 
Invesco Government & Agency Portfolio, Institutional Class      $ -      $ 27,142,179      $ (27,142,179 )     $ -     $ -      $ -      $ 14,150
Investments Purchased with Cash Collateral from Securities on Loan:                                 
Invesco Private Government Fund        26,654,039        265,455,329        (263,958,613 )       -       -        28,150,755        1,173,190 *
Invesco Private Prime Fund        68,547,907        498,948,653        (495,110,541 )       (2,980 )       4,618        72,387,657        3,152,656 *
    

 

 

      

 

 

      

 

 

     

 

 

     

 

 

      

 

 

      

 

 

 
Total      $ 95,201,946      $ 791,546,161      $ (786,211,333 )     $ (2,980 )     $ 4,618      $ 100,538,412      $ 4,339,996
    

 

 

      

 

 

      

 

 

     

 

 

     

 

 

      

 

 

      

 

 

 

 

*

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statements of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(d) 

The rate shown is the 7-day SEC standardized yield as of August 31, 2023.

(e) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 2I.

 

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

 

   18   

 

 

 

 


 

Invesco KBW Premium Yield Equity REIT ETF (KBWY)

August 31, 2023

Schedule of Investments(a)

 

         Shares         Value    

Common Stocks & Other Equity Interests-99.78%

 

Diversified REITs-13.49%

 

  

Armada Hoffler Properties, Inc.

     485,169      $ 5,526,075  

Broadstone Net Lease, Inc.(b)

     347,739        5,622,940  

Gladstone Commercial Corp.(b)

     668,202        8,786,856  

Global Net Lease, Inc.(b)

     945,844        10,735,329  
     

 

 

 
        30,671,200  
     

 

 

 

Health Care REITs-16.50%

 

  

Global Medical REIT, Inc.(b)

     839,553        8,126,873  

Medical Properties Trust, Inc.(b)

     1,110,475        8,017,630  

National Health Investors, Inc.(b)

     100,429        5,134,935  

Omega Healthcare Investors, Inc.(b)

     226,799        7,216,744  

Sabra Health Care REIT, Inc.(b)

     719,642        9,017,114  
     

 

 

 
        37,513,296  
     

 

 

 

Hotel & Resort REITs-5.49%

 

  

Apple Hospitality REIT, Inc.

     345,346        5,187,097  

Service Properties Trust(b)

     883,345        7,296,430  
     

 

 

 
        12,483,527  
     

 

 

 

Industrial REITs-7.64%

 

  

Innovative Industrial Properties, Inc.(b)

     121,309        10,587,849  

LXP Industrial Trust(b)

     356,440        3,500,241  

STAG Industrial, Inc.

     89,622        3,273,892  
     

 

 

 
        17,361,982  
     

 

 

 

Multi-Family Residential REITs-1.71%

 

  

Apartment Income REIT Corp.

     114,365        3,895,272  
     

 

 

 

Office REITs-27.54%

 

  

Brandywine Realty Trust(b)

     3,615,751        18,078,755  

Hudson Pacific Properties, Inc.(b)

     3,275,001        22,302,757  

Office Properties Income Trust(b)

     1,126,566        8,336,588  

SL Green Realty Corp.

     353,850        13,892,151  
     

 

 

 
        62,610,251  
     

 

 

 

Other Specialized REITs-15.94%

 

  

EPR Properties

     144,595        6,474,964  

Four Corners Property Trust, Inc.(b)

     155,239        3,905,813  

Gaming and Leisure Properties, Inc.

     93,045        4,410,333  

Outfront Media, Inc.

     440,048        4,994,545  

Uniti Group, Inc.

     3,061,963        16,442,741  
     

 

 

 
        36,228,396  
     

 

 

 
      Shares         Value    

Retail REITs-7.87%

 

  

Getty Realty Corp.(b)

     108,683      $ 3,262,664  

Necessity Retail REIT, Inc. (The)(b)

     1,268,625        9,514,688  

Spirit Realty Capital, Inc.(b)

     132,145        5,102,118  
     

 

 

 
        17,879,470  
     

 

 

 

Self-Storage REITs-1.86%

 

  

National Storage Affiliates Trust

     125,567        4,219,051  
     

 

 

 

Single-Family Residential REITs-1.74%

 

  

UMH Properties, Inc.(b)

     264,254        3,950,597  
     

 

 

 

Total Common Stocks & Other Equity Interests
(Cost $253,889,190)

 

     226,813,042  
     

 

 

 
Money Market Funds-0.08%

 

Invesco Government & Agency Portfolio, Institutional Class, 5.25%(c)(d)
(Cost $180,342)

     180,342        180,342  
     

 

 

 

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)-99.86%
(Cost $254,069,532)

 

     226,993,384  
     

 

 

 
Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds-30.14%

 

Invesco Private Government Fund,
5.30%(c)(d)(e)

     19,180,714        19,180,714  

Invesco Private Prime Fund, 5.51%(c)(d)(e)

     49,321,834        49,321,834  
     

 

 

 

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $68,501,803)

 

     68,502,548  
     

 

 

 

TOTAL INVESTMENTS IN SECURITIES-130.00%
(Cost $322,571,335)

 

     295,495,932  

OTHER ASSETS LESS LIABILITIES-(30.00)%

 

     (68,198,640
     

 

 

 

NET ASSETS-100.00%

      $ 227,297,292  
     

 

 

 

 

Investment Abbreviations:

REIT -Real Estate Investment Trust

 

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

 

   19   

 

 

 

 


 

Invesco KBW Premium Yield Equity REIT ETF (KBWY)–(continued)

August 31, 2023

 

Notes to Schedule of Investments:

(a) 

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

(b) 

All or a portion of this security was out on loan at August 31, 2023.

(c) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended August 31, 2023.

 

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

(Depreciation)
  Realized
Gain
(Loss)
  Value
August 31, 2023
   Dividend
Income
Investments in Affiliated Money Market Funds:                                
Invesco Government & Agency Portfolio, Institutional Class      $ -      $ 18,488,800      $ (18,308,458 )     $ -     $ -     $ 180,342      $ 10,640
Investments Purchased with Cash Collateral from Securities on Loan:                                
Invesco Private Government Fund        11,365,194        144,362,925        (136,547,405 )       -       -       19,180,714        593,484 *
Invesco Private Prime Fund        29,170,947        324,055,360        (303,900,872 )       (150 )       (3,451 )       49,321,834        1,608,915 *
    

 

 

      

 

 

      

 

 

     

 

 

     

 

 

     

 

 

      

 

 

 
Total      $ 40,536,141      $ 486,907,085      $ (458,756,735 )     $ (150 )     $ (3,451 )     $ 68,682,890      $ 2,213,039
    

 

 

      

 

 

      

 

 

     

 

 

     

 

 

     

 

 

      

 

 

 

 

*

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statements of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(d) 

The rate shown is the 7-day SEC standardized yield as of August 31, 2023.

(e) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 2I.

 

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

 

   20   

 

 

 

 


 

Invesco KBW Property & Casualty Insurance ETF (KBWP)

August 31, 2023

Schedule of Investments(a)

 

         Shares         Value    

Common Stocks & Other Equity Interests-99.97%

 

Multi-line Insurance-18.36%

 

  

American International Group, Inc.

     215,002      $ 12,581,917  

Assurant, Inc.

     47,330        6,594,489  

Hartford Financial Services Group, Inc. (The)

     82,885        5,952,801  

Horace Mann Educators Corp.(b)

     77,303        2,215,504  
     

 

 

 
        27,344,711  
     

 

 

 

Property & Casualty Insurance-71.47%

 

  

Allstate Corp. (The)

     104,736        11,291,588  

American Financial Group, Inc.

     50,588        5,864,161  

Arch Capital Group Ltd.(b)(c)

     81,482        6,262,707  

AXIS Capital Holdings Ltd.

     109,399        6,001,629  

Chubb Ltd.

     61,124        12,277,978  

Cincinnati Financial Corp.(b)

     58,854        6,226,165  

Hanover Insurance Group, Inc. (The)

     50,953        5,437,704  

James River Group Holdings Ltd.

     71,199        1,036,657  

Kemper Corp.(b)

     121,290        5,696,991  

Mercury General Corp.(b)

     104,851        2,999,787  

ProAssurance Corp.(b)

     102,333        1,809,248  

Progressive Corp. (The)

     88,803        11,852,536  

RLI Corp.

     45,854        6,030,718  

Selective Insurance Group, Inc.(b)

     58,712        5,824,818  

Travelers Cos., Inc. (The)

     67,113        10,820,629  

Universal Insurance Holdings, Inc.(b)

     57,664        730,026  

W.R. Berkley Corp.

     101,998        6,309,596  
     

 

 

 
        106,472,938  
     

 

 

 

Reinsurance-10.14%

 

  

Everest Group Ltd.

     16,702        6,024,077  

RenaissanceRe Holdings Ltd. (Bermuda)

     30,161        5,666,950  

SiriusPoint Ltd. (Bermuda)(b)(c)

     308,746        3,414,731  
     

 

 

 
        15,105,758  
     

 

 

 

Total Common Stocks & Other Equity Interests
(Cost $164,230,279)

 

     148,923,407  
     

 

 

 
         Shares         Value    
Money Market Funds-0.04%

 

Invesco Government & Agency Portfolio, Institutional Class, 5.25%(d)(e)
(Cost $66,778)

     66,778      $ 66,778  
     

 

 

 

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)-100.01%
(Cost $164,297,057)

 

     148,990,185  
     

 

 

 
Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds-4.36%

 

Invesco Private Government Fund,
5.30%(d)(e)(f)

     1,817,266        1,817,266  

Invesco Private Prime Fund, 5.51%(d)(e)(f)

     4,672,971        4,672,971  
     

 

 

 

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $6,490,237)

 

     6,490,237  
     

 

 

 

TOTAL INVESTMENTS IN SECURITIES-104.37%
(Cost $170,787,294)

 

     155,480,422  

OTHER ASSETS LESS LIABILITIES-(4.37)%

 

     (6,513,781
     

 

 

 

NET ASSETS-100.00%

      $ 148,966,641  
     

 

 

 

 

Notes to Schedule of Investments:

(a) 

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

(b) 

All or a portion of this security was out on loan at August 31, 2023.

(c) 

Non-income producing security.

(d) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended August 31, 2023.

 

     Value
August 31, 2022
   Purchases
at Cost
   Proceeds
from Sales
  Change in
Unrealized
Appreciation
   Realized
Gain
   Value
August 31, 2023
   Dividend
Income
Investments in Affiliated Money Market Funds:                                  
Invesco Government & Agency Portfolio, Institutional Class      $ 158,610      $  5,838,181      $  (5,930,013     $ -      $   -      $  66,778      $  4,398

 

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

 

   21   

 

 

 

 


 

Invesco KBW Property & Casualty Insurance ETF (KBWP)–(continued)

August 31, 2023

 

     Value
August 31, 2022
   Purchases
at Cost
   Proceeds
from Sales
  Change in
Unrealized
Appreciation
   Realized
Gain
   Value
August 31, 2023
   Dividend
Income
Investments Purchased with Cash Collateral from Securities on Loan:                                  
Invesco Private Government Fund      $ -      $ 58,823,736      $ (57,006,470 )     $ -      $ -      $ 1,817,266      $ 102,341 *
Invesco Private Prime Fund        -        122,124,597        (117,455,035 )       -        3,409        4,672,971        273,972 *
    

 

 

      

 

 

      

 

 

     

 

 

      

 

 

      

 

 

      

 

 

 
Total      $ 158,610      $ 186,786,514      $ (180,391,518 )     $ -      $ 3,409      $ 6,557,015      $ 380,711
    

 

 

      

 

 

      

 

 

     

 

 

      

 

 

      

 

 

      

 

 

 

 

*

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statements of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(e) 

The rate shown is the 7-day SEC standardized yield as of August 31, 2023.

(f)

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 2I.

 

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

 

   22   

 

 

 

 


 

Invesco KBW Regional Banking ETF (KBWR)

August 31, 2023

Schedule of Investments(a)

 

         Shares         Value    

Common Stocks & Other Equity Interests-99.84%

 

Regional Banks-99.84%

 

  

Ameris Bancorp(b)

     32,449      $ 1,322,297  

Associated Banc-Corp.

     69,165        1,198,629  

Atlantic Union Bankshares Corp.(b)

     36,351        1,079,261  

Bank of Hawaii Corp.

     19,212        1,032,453  

Bank OZK(b)

     29,615        1,189,635  

BankUnited, Inc.

     36,064        946,680  

BOK Financial Corp.(b)

     23,190        1,927,321  

Brookline Bancorp, Inc.

     42,952        411,051  

Cadence Bank(b)

     57,044        1,305,167  

Cathay General Bancorp

     35,029        1,248,083  

Columbia Banking System, Inc.

     51,131        1,047,163  

Commerce Bancshares, Inc.(b)

     42,727        2,097,468  

Community Bank System, Inc.(b)

     20,713        984,903  

Cullen/Frost Bankers, Inc.

     20,444        1,932,571  

CVB Financial Corp.(b)

     67,483        1,178,253  

Eastern Bankshares, Inc.

     85,428        1,149,861  

F.N.B. Corp.

     93,207        1,083,997  

First Bancorp

     87,139        1,207,747  

First Commonwealth Financial Corp.(b)

     49,872        651,827  

First Financial Bancorp

     46,098        957,916  

First Financial Bankshares, Inc.(b)

     39,539        1,135,560  

First Hawaiian, Inc.(b)

     61,832        1,169,243  

First Interstate BancSystem, Inc., Class A

     46,460        1,203,779  

Fulton Financial Corp.(b)

     80,206        1,069,146  

Glacier Bancorp, Inc.(b)

     35,551        1,073,996  

Hancock Whitney Corp.

     28,038        1,156,567  

Home BancShares, Inc.(b)

     47,714        1,058,297  

Hope Bancorp, Inc.(b)

     58,141        562,223  

Independent Bank Corp.(b)

     21,379        1,154,894  

New York Community Bancorp, Inc.(b)

     199,269        2,447,023  

Old National Bancorp

     82,464        1,258,401  

Pacific Premier Bancorp, Inc.

     46,435        1,068,934  

PacWest Bancorp

     57,224        454,931  

Pinnacle Financial Partners, Inc.(b)

     21,059        1,401,687  

Popular, Inc.

     17,913        1,223,100  

Prosperity Bancshares, Inc.(b)

     17,912        1,017,581  

 

         Shares         Value    

Regional Banks-(continued)

 

  

Provident Financial Services, Inc.(b)

     36,602      $ 603,201  

Simmons First National Corp., Class A(b)

     61,713        1,099,726  

South State Corp.(b)

     16,385        1,184,635  

Synovus Financial Corp.(b)

     37,808        1,170,536  

Texas Capital Bancshares, Inc.(c)

     21,656        1,352,201  

Trustmark Corp.

     29,584        681,615  

UMB Financial Corp.

     18,083        1,143,026  

United Bankshares, Inc.

     34,822        1,047,446  

United Community Banks, Inc.(b)

     45,299        1,223,073  

Valley National Bancorp(b)

     138,819        1,274,358  

Washington Federal, Inc.(b)

     31,889        866,743  

Webster Financial Corp.

     57,630        2,444,088  

Wintrust Financial Corp.

     16,110        1,250,297  

WSFS Financial Corp.

     29,780        1,170,354  
     

 

 

 
        58,918,944  
     

 

 

 

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)-99.84%
(Cost $75,743,029)

 

     58,918,944  
     

 

 

 
Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds-28.26%

     

Invesco Private Government Fund,
5.30%(d)(e)(f)

     4,669,170        4,669,170  

Invesco Private Prime Fund, 5.51%(d)(e)(f)

     12,006,441        12,006,441  
     

 

 

 

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $16,675,472)

 

     16,675,611  
     

 

 

 

TOTAL INVESTMENTS IN SECURITIES-128.10%
(Cost $92,418,501)

 

     75,594,555  

OTHER ASSETS LESS LIABILITIES-(28.10)%

 

     (16,580,677
     

 

 

 

NET ASSETS-100.00%

      $ 59,013,878  
     

 

 

 

 

Notes to Schedule of Investments:

(a) 

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

(b) 

All or a portion of this security was out on loan at August 31, 2023.

(c) 

Non-income producing security.

(d) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the fiscal year ended August 31, 2023.

 

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

(Depreciation)
   Realized
Gain
(Loss)
   Value
August 31, 2023
   Dividend
Income
Investments in Affiliated Money Market Funds:                                  
Invesco Government & Agency Portfolio, Institutional Class      $  15,014      $  2,113,781      $  (2,128,795     $   -      $   -      $   -      $  1,457

 

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

 

   23   

 

 

 

 


 

Invesco KBW Regional Banking ETF (KBWR)–(continued)

August 31, 2023

 

     Value
August 31, 2022
   Purchases
at Cost
   Proceeds
from Sales
  Change in
Unrealized
Appreciation
(Depreciation)
  Realized
Gain
(Loss)
  Value
August 31, 2023
   Dividend
Income
Investments Purchased with Cash Collateral from Securities on Loan:                                
Invesco Private Government Fund      $ 3,369,206      $ 48,137,078      $ (46,837,114)       $ -     $ -     $ 4,669,170      $ 176,114 *
Invesco Private Prime Fund        8,663,673        107,283,530        (103,939,187 )       (224 )       (1,351 )       12,006,441        473,957 *
    

 

 

      

 

 

      

 

 

     

 

 

     

 

 

     

 

 

      

 

 

 
Total      $ 12,047,893      $ 157,534,389      $ (152,905,096 )     $ (224 )     $ (1,351 )     $ 16,675,611      $ 651,528
    

 

 

      

 

 

      

 

 

     

 

 

     

 

 

     

 

 

      

 

 

 

 

*

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statements of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(e) 

The rate shown is the 7-day SEC standardized yield as of August 31, 2023.

(f) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 2I.

 

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

 

   24   

 

 

 

 


 

Statements of Assets and Liabilities

August 31, 2023

 

     Invesco KBW
Bank ETF
(KBWB)
    Invesco KBW High
Dividend Yield
Financial ETF
(KBWD)
    Invesco KBW
Premium Yield
Equity REIT ETF
(KBWY)
    Invesco KBW
Property &
Casualty
Insurance ETF
(KBWP)
    Invesco KBW
Regional Banking
ETF (KBWR)
 

Assets:

          

Unaffiliated investments in securities, at value(a)

   $ 1,755,732,830     $ 381,304,547     $ 226,813,042     $ 148,923,407     $ 58,918,944  

Affiliated investments in securities, at value

     32,735,343       100,538,412       68,682,890       6,557,015       16,675,611  

Receivable for:

          

Dividends

     7,058,256       1,534,792       363,633       196,527       157,194  

Securities lending

     3,040       207,721       8,711       479       3,320  

Investments sold

     -       599,303       960,750       4,141,147       -  

Fund shares sold

     4,196,733       -       -       -       -  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

     1,799,726,202       484,184,775       296,829,026       159,818,575       75,755,069  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities:

          

Due to custodian

     1,095,393       188,156       -       -       47,552  

Payable for:

          

Investments purchased

     4,190,750       -       -       163,554       -  

Investments purchased - affiliated broker

     1,826,351       -       -       2,970       -  

Collateral upon return of securities loaned

     32,735,484       100,539,021       68,501,803       6,490,237       16,675,472  

Fund shares repurchased

     -       639,260       962,462       4,145,202       -  

Accrued unitary management fees

     550,761       112,627       67,469       49,971       18,167  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     40,398,739       101,479,064       69,531,734       10,851,934       16,741,191  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets

   $ 1,759,327,463     $ 382,705,711     $ 227,297,292     $ 148,966,641     $ 59,013,878  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net assets consist of:

          

Shares of beneficial interest

   $ 2,644,005,085     $ 590,990,490     $ 438,184,578     $ 174,867,573     $ 88,478,958  

Distributable earnings (loss)

     (884,677,622     (208,284,779     (210,887,286     (25,900,932     (29,465,080
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets

   $ 1,759,327,463     $ 382,705,711     $ 227,297,292     $ 148,966,641     $ 59,013,878  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     41,910,000       23,930,000       11,870,000       1,800,000       1,260,000  

Net asset value

   $ 41.98     $ 15.99     $ 19.15     $ 82.76     $ 46.84  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Market price

   $ 41.99     $ 15.99     $ 19.14     $ 82.76     $ 46.80  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unaffiliated investments in securities, at cost

   $ 2,217,076,799     $ 382,218,962     $ 253,889,190     $ 164,230,279     $ 75,743,029  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Affiliated investments in securities, at cost

   $ 32,735,484     $ 100,539,021     $ 68,682,145     $ 6,557,015     $ 16,675,472  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ 32,210,394     $ 98,190,695     $ 66,904,350     $ 6,267,012     $ 16,390,991  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

 

   25   

 

 

 

 


 

Statements of Operations

For the year ended August 31, 2023

 

     Invesco KBW
Bank ETF
(KBWB)
    Invesco KBW  High
Dividend Yield
Financial ETF
(KBWD)
    Invesco KBW
Premium Yield
Equity REIT ETF
(KBWY)
    Invesco KBW
Property &
Casualty
Insurance ETF
(KBWP)
    Invesco KBW
Regional Banking
ETF (KBWR)
 

Investment income:

          

Unaffiliated dividend income

   $ 65,351,138     $ 36,349,157     $ 9,386,217     $ 7,355,358     $ 2,226,232  

Affiliated dividend income

     28,743       14,150       10,640       4,398       1,457  

Securities lending income, net

     245,369       1,495,076       80,687       15,915       27,782  

Foreign withholding tax

     -       -       -       -       (9,027
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

     65,625,250       37,858,383       9,477,544       7,375,671       2,246,444  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

          

Unitary management fees

     6,139,371       1,276,020       838,714       1,115,927       233,314  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less: Waivers

     (832     (360     (292     (121     (41
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net expenses

     6,138,539       1,275,660       838,422       1,115,806       233,273  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

     59,486,711       36,582,723       8,639,122       6,259,865       2,013,171  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized and unrealized gain (loss) from:

          

Net realized gain (loss) from:

          

Unaffiliated investment securities

     (571,258,727     (39,157,205     (27,095,541     (2,873,479     (3,043,155

Affiliated investment securities

     2,891       4,618       (3,451     3,409       (1,351

In-kind redemptions

     (129,395,708     13,704       495,450       24,426,231       1,291,748  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net realized gain (loss)

     (700,651,544     (39,138,883     (26,603,542     21,556,161       (1,752,758
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Change in net unrealized appreciation (depreciation) of:

          

Unaffiliated investment securities

     107,614,809       12,142,917       (2,102,680     (6,856,258     (10,380,774

Affiliated investment securities

     (1,017     (2,980     (150     -       (224
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Change in net unrealized appreciation (depreciation)

     107,613,792       12,139,937       (2,102,830     (6,856,258     (10,380,998
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net realized and unrealized gain (loss)

     (593,037,752     (26,998,946     (28,706,372     14,699,903       (12,133,756
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

   $ (533,551,041   $ 9,583,777     $ (20,067,250   $ 20,959,768     $ (10,120,585
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

 

   26   

 

 

 

 


 

 

(This Page Intentionally Left Blank)

 

 

 

   27   

 

 

 

 


 

Statements of Changes in Net Assets

For the years ended August 31, 2023 and 2022

 

     Invesco KBW Bank ETF (KBWB)     Invesco KBW High Dividend Yield
Financial ETF (KBWD)
 
     2023     2022     2023     2022  

Operations:

        

Net investment income

   $ 59,486,711     $ 62,100,244     $ 36,582,723     $ 30,363,494  

Net realized gain (loss)

     (700,651,544     64,064,570       (39,138,883     14,084,867  

Change in net unrealized appreciation (depreciation)

     107,613,792       (616,755,963     12,139,937       (92,543,242
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets resulting from operations

     (533,551,041     (490,591,149     9,583,777       (48,094,881
  

 

 

   

 

 

   

 

 

   

 

 

 

Distributions to Shareholders from:

        

Distributable earnings

     (54,916,451     (65,164,401     (42,766,013     (39,784,352
  

 

 

   

 

 

   

 

 

   

 

 

 

Shareholder Transactions:

        

Proceeds from shares sold

     2,842,086,612       4,094,517,993       35,165,759       160,076,565  

Value of shares repurchased

     (2,463,492,686     (4,547,864,150     (42,129,665     (114,842,574
  

 

 

   

 

 

   

 

 

   

 

 

 

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

     378,593,926       (453,346,157     (6,963,906     45,233,991  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets

     (209,873,566     (1,009,101,707     (40,146,142     (42,645,242
  

 

 

   

 

 

   

 

 

   

 

 

 

Net assets:

        

Beginning of period

     1,969,201,029       2,978,302,736       422,851,853       465,497,095  
  

 

 

   

 

 

   

 

 

   

 

 

 

End of period

   $ 1,759,327,463     $ 1,969,201,029     $ 382,705,711     $ 422,851,853  
  

 

 

   

 

 

   

 

 

   

 

 

 

Changes in Shares Outstanding:

        

Shares sold.

     57,730,000       61,560,000       2,240,000       7,970,000  

Shares repurchased

     (52,000,000     (70,360,000     (2,900,000     (5,890,000

Shares outstanding, beginning of period

     36,180,000       44,980,000       24,590,000       22,510,000  
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares outstanding, end of period

     41,910,000       36,180,000       23,930,000       24,590,000  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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

 

   28   

 

 

 

 


 

 

 

Invesco KBW Premium Yield
Equity REIT ETF (KBWY)
    Invesco KBW Property & Casualty
Insurance ETF (KBWP)
    Invesco KBW Regional
Banking ETF (KBWR)
 
2023     2022     2023     2022     2023     2022  
         
$ 8,639,122     $ 9,812,455     $ 6,259,865     $ 2,414,200     $ 2,013,171     $ 1,799,159  
  (26,603,542     64,149,135       21,556,161       2,514,282       (1,752,758     (609,545
  (2,102,830)       (79,458,900     (6,856,258     (16,681,345     (10,380,998     (4,112,163

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (20,067,250     (5,497,310     20,959,768       (11,752,863     (10,120,585     (2,922,549

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
         
  (19,585,361     (17,784,899     (6,394,173     (2,788,226     (1,965,805     (1,800,845

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
         
  40,036,438       116,944,071       218,674,466       151,564,768       30,743,662       24,061,190  
  (61,506,195     (155,305,074     (290,961,981     (18,928,465     (34,911,417     (17,597,678

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (21,469,757     (38,361,003     (72,287,515     132,636,303       (4,167,755     6,463,512  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  (61,122,368     (61,643,212     (57,721,920     118,095,214       (16,254,145     1,740,118  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
         
  288,419,660       350,062,872       206,688,561       88,593,347       75,268,023       73,527,905  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$ 227,297,292     $ 288,419,660     $ 148,966,641     $ 206,688,561     $ 59,013,878     $ 75,268,023  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
         
  2,050,000       4,910,000       2,620,000       1,840,000       640,000       370,000  
  (3,250,000     (6,480,000     (3,520,000     (240,000     (680,000     (300,000
  13,070,000       14,640,000       2,700,000       1,100,000       1,300,000       1,230,000  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  11,870,000       13,070,000       1,800,000       2,700,000       1,260,000       1,300,000  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

   29   

 

 

 

 


 

Financial Highlights

Invesco KBW Bank ETF (KBWB)

 

     Years Ended August 31,  
     2023     2022     2021     2020     2019  

Per Share Operating Performance:

          

Net asset value at beginning of period

   $ 54.43     $ 66.21     $ 39.58     $ 48.15     $ 57.01  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(a)

     1.64       1.49       1.31       1.40       1.27  

Net realized and unrealized gain (loss) on investments

     (12.52     (11.66     26.56       (8.45     (8.86
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total from investment operations

     (10.88     (10.17     27.87       (7.05     (7.59