Domestic Equity

The US stock market hit new highs in the second quarter of 2021, despite higher volatility stemming from inflation concerns and the potential for rising interest rates. Investors remained optimistic about the strength of the economic recovery after the US gross domestic product (GDP) grew at a 6.4% annualized rate for the first quarter of 2021.^{1 Corporate earnings also remained strong as the majority of S&P 500 companies beat Wall Street earnings forecasts. US equity markets continued to move higher in July 2021 despite inflation concerns and increasing COVID-19 infection rates due to the rapidly spreading Delta variant. Despite the Consumer Price Index (CPI) increasing monthly from June through September,2 the US Federal Reserve (the Fed) declined to raise interest rates at its September Federal Open Market Committee meeting. The US stock market saw continued volatility in August 2021 and a selloff through most of September due to increasing concerns of inflation due to a spike in oil prices and supply chain shortages causing rising costs.}

Equity markets were volatile in the fourth quarter of 2021 amid record inflation and the emergence of a new COVID-19 variant. Pandemic-related supply chain disruptions and labor shortages intensified during the quarter, resulting in broadly higher input costs for companies and consumers alike. Additionally, the price of oil (West Texas Intermediate) rose to nearly $85 per barrel in October,³ causing higher gas prices for consumers and pushing energy stocks higher. The CPI reported for November increased 0.8%, resulting in a 6.8% increase over the last 12 months, the highest since 1982.² To combat inflation, the Fed announced a faster pace of tapering at its December meeting, pledging to end its asset purchase program by March 2022. The Fed also announced the potential for three interest rate increases in 2022. With solid corporate earnings and optimism about the COVID-19 Omicron variant reporting milder symptoms, stocks rallied at 2021 year-end.

Equity markets declined in the first quarter of 2022 amid volatility sparked by Russia’s invasion of Ukraine, rising commodity prices, rampant global inflation and the Fed’s shift toward tighter monetary policy. Russia’s invasion exacerbated inflationary pressures, disrupting already strained supply chains and increasing shortages of oil, gas and raw materials. The price of oil rose sharply, with crude prices reaching their highest price per barrel since 2008.³ The CPI rose by 7.9% for the 12 months ended February 28, 2022, the largest 12-month increase since 1982.² To combat inflation, the Fed raised the federal funds rate by one-quarter percentage point in March, with several more rate increases expected in 2022. As the war in Ukraine continued and corporate earnings in high-profile names, like Netflix reported slowing growth and profits, equity markets sold off for much of the month of April 2022. In this environment, US stocks had flat

returns for the fiscal year ended April 30, 2022, of 0.21%, as measured by the S&P 500 Index.⁴

 

1	Source: US Bureau of Economic Analysis

2	Source: US Bureau of Labor Statistics

3	Source: Bloomberg L.P.

4	Source: Lipper Inc.

Global Equity

At the beginning of the fiscal year, global equity markets were bolstered by the acceleration of vaccination rollouts and easing of COVID-19-related restrictions in most developed markets, with growth stocks outperforming value stocks in most regions.

Developed global equity markets ended the second half of 2021 in positive territory despite rising inflation and the emergence of Omicron, a new COVID-19 variant. Pandemic-related supply chain disruptions and labor shortages intensified during the fiscal year, resulting in higher costs for companies and consumers. Emerging market equities declined during the fiscal year, primarily due to weak performance of Chinese equities, which were affected by significant regulatory changes in the private tutoring industry, increased regulation in the technology sector, the potential default of a large Chinese property developer (which did, in fact, default later in 2021) and COVID-19 concerns.

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

At the end of the fiscal year, global equity markets continued their decline, as they were impacted by the war in Ukraine, COVID-19 lockdowns in China and the increase of interest rates in the US to combat inflation. For the overall fiscal year, most regions were in negative territory, but developed market equities outperformed emerging market equities.

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

Strictly in accordance with its guidelines and mandated procedures, SPADE Indexes LLC (the “Index Provider”) compiles, maintains, and calculates the Index, which is composed of common stocks of companies that are systematically important to the defense sector and are involved with the development, manufacture, operation and support of U.S. defense, military, national/homeland security, and government space operations. These may include, for example, companies that provide the following products or services: military aircraft, naval vessels, armored vehicles, helicopters, drones and remotely piloted vehicles, missiles and missile defense, command and control, secure communications, battlespace awareness, intelligence and reconnaissance, and space systems, as well as national/homeland security activities including border security, biometric screening systems, and military cybersecurity efforts. 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 April 30, 2022, on a market price basis, the Fund returned (2.58)%. On a net asset value (“NAV”) basis, the Fund returned (2.59)%. During the same time period, the Index returned (2.10)%. 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^® Aerospace & Defense Index (the “Benchmark Index”) returned 2.92%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 56 securities. The Benchmark Index was selected for its recognition in the marketplace, and because its performance comparison is a useful measure for investors due primarily to its exposure to the aerospace and defense industry.

The performance of the Fund differed from the Benchmark Index in part because the Fund seeks to track an Index that limits its constituents to companies that are involved in U.S. defense, military, homeland security and space operations, whereas the Benchmark Index includes companies that are involved in the commercial aerospace industry as well.

Relative to the Benchmark Index, the Fund was most overweight in the research & consulting services sub-industry and most underweight in the aerospace & defense sub-industry during the fiscal year ended April 30, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during that

period can be attributed to security selection in the aerospace & defense sub-industry.

For the fiscal year ended April 30, 2022, the aerospace & defense sub-industry contributed most significantly to the Fund’s return, followed by the research and consulting services sub-industry. The industrial conglomerates sub-industry was the greatest detractor during this period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended April 30, 2022, included Northrop Grumman Corp., an aerospace and defense company (portfolio average weight of 6.07%) and General Dynamics Corp., an aerospace & defense company (portfolio average weight of 5.41%). Positions that detracted most significantly from the Fund’s return during this period included Boeing Co., an aerospace & defense company (portfolio average weight of 6.43%) and Axon Enterprise, Inc., an aerospace & defense company (portfolio average weight of 3.22%).

 

Industry Breakdown (% of the Fund’s Net Assets) as of April 30, 2022
Aerospace & Defense			73.50
Professional Services			12.04
Industrial Conglomerates			5.58
Electronic Equipment, Instruments & Components			3.45
Industry Types Each Less Than 3%			5.39
Money Market Funds Plus Other Assets Less Liabilities			0.04
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of April 30, 2022
Security
General Dynamics Corp.			7.26
Northrop Grumman Corp.			7.24
Lockheed Martin Corp.			7.14
Raytheon Technologies Corp.			6.90
Boeing Co. (The)			5.89
Honeywell International, Inc.			5.58
L3Harris Technologies, Inc.			5.45
Textron, Inc.			3.29
TransDigm Group, Inc.			3.18
Leidos Holdings, Inc.			2.91
Total			54.84

 

*	Excluding money market fund holdings.

Fund Inception: October 26, 2005

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 current prospectus for more information. According to the Fund’s current prospectus, the total annual operating expense ratio was indicated as 0.61%. The Financial Highlights section of the Shareholder Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes

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

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

Notes Regarding Indexes and Fund Performance History:

 

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

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

Strictly in accordance with its guidelines and mandated procedures, Dorsey, Wright & Associates, LLC (the “Index Provider”) compiles and maintains the Index, which is composed of approximately 100 securities from an eligible universe of approximately 1,000 securities of the largest constituents by float-adjusted market capitalization within the NASDAQ US Benchmark Index^TM, a market capitalization-weighted index designed to track the performance of the U.S. equity market.

The Index Provider selects securities for the Index pursuant to a proprietary selection methodology that is designed to identify companies that demonstrate powerful relative strength or “momentum” characteristics. “Relative strength” is an investing technique that seeks to determine the strongest performing securities by measuring certain factors, such as a security’s relative performance against the overall market over a set period, or a security’s relative strength value, which is derived by comparing the rate of increase of the security’s price as compared to that of a benchmark index.

The Index Provider uses a proprietary methodology to analyze the relative strength of each security within the universe of eligible securities and determine a “momentum” score. In general, momentum is the tendency of an investment to exhibit persistence in its relative performance; a “momentum” style of investing emphasizes investing in securities that have had better recent performance compared to other securities. The momentum score for each security included in the Index is based on intermediate and long term upward price movements of the security as compared to a representative benchmark index.

After giving each eligible security a momentum score, the Index Provider selects approximately 100 securities with the highest momentum scores from the universe of eligible securities for inclusion in the Index. The Index Provider weights each security by its momentum score, with higher scoring securities representing a greater weight in the Index.

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 April 30, 2022, on a market price basis, the Fund returned (14.77)%. On a net asset value (“NAV”) basis, the Fund returned (14.77)%. During the same time period, the Index returned (14.22)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to the fees and expenses that the Fund incurred during the period. During this same time period, the Russell 3000^® Growth Index returned (6.83)%.

For the fiscal year ended April 30, 2022, the energy sector contributed most significantly to the Fund’s return. The health care sector detracted most significantly from the Fund’s return, followed by the consumer discretionary and industrials sectors.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended April 30, 2022, included Enphase Energy, an information technology company (no longer held at fiscal year-end) and NVIDIA Corp., an information technology company (no longer held at fiscal year-end). Positions that detracted most significantly from the Fund’s return during this period included STAAR Surgical Co., a health care company (no longer held at fiscal year-end) and Sherwin-Williams Co., a materials company (no longer held at fiscal year-end).

 

Sector Breakdown (% of the Fund’s Net Assets) as of April 30, 2022
Energy			18.70
Information Technology			18.63
Health Care			15.28
Industrials			13.14
Financials			9.74
Consumer Discretionary			8.35
Materials			6.11
Real Estate			5.40
Sector Types Each Less Than 3%			4.63
Money Market Funds Plus Other Assets Less Liabilities			0.02
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of April 30, 2022
Security
Mastercard, Inc., Class A			3.14
Apple, Inc.			3.07
W.R. Berkley Corp.			2.93
O’Reilly Automotive, Inc.			2.78
Antero Resources Corp.			2.29
Danaher Corp.			2.15
Monolithic Power Systems, Inc.			2.05
Amphenol Corp., Class A			2.01
Mettler-Toledo International, Inc.			1.98
Old Dominion Freight Line, Inc.			1.94
Total			24.34

 

*	Excluding money market fund holdings.

Fund Inception: March 1, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information. According to the Fund’s current prospectus, the total annual operating expense ratio was indicated as 0.62%. The Financial Highlights section of the Shareholder Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

-	The Blended—Dorsey Wright® Technical Leaders Index is comprised of price only returns from Fund inception through the conversion date, December 31, 2013, and total returns starting at the conversion date through April 30, 2022.

 

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

As an index fund, the Invesco Global Listed Private Equity ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Red Rocks Global Listed Private Equity Index (the “Index”). The Fund generally will invest at least 90% of its total assets in securities (including American depositary receipts (“ADRs”) and global depositary receipts (“GDRs”)) that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, Red Rocks Capital LLC (the “Index Provider”) compiles and maintains the Index, which is composed of securities, ADRs and GDRs of 40 to 75 private equity companies, including business development companies, master limited partnerships and other vehicles that are listed on a nationally recognized exchange, all of whose principal businesses are to invest in, lend capital to, or provide services to privately held companies.

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 April 30, 2022, on a market price basis, the Fund returned (19.61)%. On a net asset value (“NAV”) basis, the Fund returned (19.85)%. During the same time period, the Index returned (18.70)%. 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 the same time period, the MSCI All Country World Index (Net) (the “Benchmark Index”) returned (5.44)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 2,937 securities. The Benchmark Index was selected for its recognition in the marketplace, and because its performance comparison is a useful measure for investors as a broad representation of the global equity markets.

The performance of the Fund differed from the Benchmark Index in part 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 primarily on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the capital markets industry and most underweight in the banks industry during the fiscal year ended April 30, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during that period can be attributed to its overweight allocation to and stock selection in the capital markets industry.

For the fiscal year ended April 30, 2022, the aerospace & defense industry contributed most significantly to the Fund’s return, followed by the oil, gas & consumable fuels industry.

The capital markets industry detracted most significantly from the Fund’s return, followed by the diversified financial services and internet & direct marketing retail industries.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended April 30, 2022, included Blackstone Inc., a capital markets company (portfolio average weight of 3.33%) and Ares Capital Corp., a capital markets company (portfolio average weight of 2.72%). Positions that detracted most significantly from the Fund’s return during this period included Prosus N.V., an internet & direct marketing retail company (portfolio average weight of 4.68%) and IAC/InterActiveCorp., an interactive media & services company (portfolio average weight of 3.48%).

 

Industry Breakdown (% of the Fund’s Net Assets) as of April 30, 2022
Capital Markets			51.96
Closed-End Funds			14.50
Diversified Financial Services			12.87
Industrial Conglomerates			6.19
Industry Types Each Less Than 3%			12.46
Money Market Funds Plus Other Assets Less Liabilities			2.02
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of April 30, 2022
Security
Blue Owl Capital, Inc.			5.22
EQT AB			5.13
3i Group PLC			4.81
KKR & Co., Inc., Class A			4.63
Partners Group Holding AG			4.54
Blackstone, Inc., Class A			4.26
Carlyle Group, Inc. (The)			4.22
Melrose Industries PLC			4.04
Sofina S.A.			3.83
Eurazeo SE			2.95
Total			43.63

 

*	Excluding money market fund holdings.

Fund Inception: October 24, 2006

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2024. According to the Fund’s current prospectus, the total gross annual operating expense ratio was indicated as 1.45%, including acquired fund fees and expenses of 0.76%, and the net annual operating expense ratio was indicated as 1.44%. The Financial Highlights section of the Shareholder Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See

invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

-	The Blended—Red Rocks Global Listed Private Equity Index is comprised of the Red Rocks Capital Listed Private Equity Index from Fund inception until September 30, 2009, followed by the performance of the Red Rocks Global Listed Private Equity Index from September 30, 2009 through April 30, 2022.

 

-	Net returns reflect invested dividends net of withholding taxes.

 

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

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

Strictly in accordance with its guidelines and mandated procedures, Nasdaq, Inc. (the “Index Provider”) compiles and maintains the Index, which is composed of U.S. exchange-listed companies that are headquartered or incorporated in the People’s Republic of China (excluding Hong Kong).

The Index is designed to provide access to the unique economic opportunities taking place in China while still providing investors with the transparency offered with U.S. exchange listed securities. Securities in the Index may include common stocks, ordinary shares, American depositary receipts (“ADRs”), shares of beneficial interest or limited partnership interests.

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 April 30, 2022, on a market price basis, the Fund returned (56.60)%. On a net asset value (“NAV”) basis, the Fund returned (56.62)%. During the same time period, the Index returned (56.60)%. 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, partially offset by income received from the securities lending program in which the Fund participates, the effect of which was compounded during a time period of high returns.

During this same time period, the FTSE China 50 Index (the “Benchmark Index”) returned (29.30)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 50 securities. The Benchmark Index was selected for its recognition in the marketplace, and because its performance comparison is a useful measure for investors as a broad representation of equity exposure to Chinese companies.

The performance of the Fund differed from the Benchmark Index primarily because the Fund seeks to track an Index that has substantially different individual company components and sector weightings. Additionally, the Fund invests in Chinese companies, as defined by the Index methodology, listed on U.S. exchanges, whereas the Benchmark Index is composed of Chinese stocks listed on the Hong Kong stock exchange. A comparison to the Benchmark Index is still relevant as the Fund and Benchmark Index both represent exposure to Chinese companies.

Relative to the Benchmark Index, the Fund was most overweight in the consumer discretionary sector and most underweight in the financials sector during the fiscal year ended April 30, 2022. The

majority of the Fund’s underperformance relative to the Benchmark Index during that period can be attributed to the Fund’s security selection in the consumer discretionary sector, as well as the underweight allocation in the financials sector.

For the fiscal year ended April 30, 2022, the consumer discretionary sector detracted most significantly from the Fund’s return, followed by the communication services and information technology sectors, respectively. No sectors contributed to the Fund’s return.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended April 30, 2022, included Hollysys Automation Technologies Ltd., an information technology company (portfolio average weight of 0.36%) and 51job, Inc., ADR, an industrials company (no longer held at fiscal year-end). Positions that detracted most significantly from the Fund’s return during this period included NIO, Inc., ADR, a consumer discretionary company (portfolio average weight of 7.57%) and Alibaba Group Holding Ltd., ADR, a consumer discretionary company (portfolio average weight of 8.40%).

 

Sector Breakdown (% of the Fund’s Net Assets) as of April 30, 2022
Consumer Discretionary			53.15
Communication Services			22.67
Information Technology			7.86
Industrials			4.93
Financials			4.66
Real Estate			3.67
Sector Types Each Less Than 3%			3.01
Money Market Funds Plus Other Assets Less Liabilities			0.05
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of April 30, 2022
Security
Alibaba Group Holding Ltd., ADR			8.96
JD.com, Inc., ADR			8.35
Pinduoduo, Inc., ADR			8.06
Baidu, Inc., ADR			7.90
NIO, Inc., ADR			7.10
NetEase, Inc., ADR			4.85
ZTO Express Cayman, Inc., ADR			4.53
Trip.com Group Ltd., ADR			4.44
Li Auto, Inc., ADR			3.57
KE Holdings, Inc., ADR			3.54
Total			61.30

 

*	Excluding money market fund holdings.

Fund Inception: December 9, 2004

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 current prospectus for more information. According to the Fund’s current prospectus, the total annual operating expense ratio was indicated as 0.69%. The Financial Highlights section of the Shareholder Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes

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

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

Notes Regarding Indexes and Fund Performance History:

 

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

As an index fund, the Invesco MSCI Sustainable Future ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the MSCI Global Environment Select Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, MSCI Inc. (the “Index Provider”) compiles, maintains and calculates the Underlying Index, which is a custom index comprised of companies that the index methodology has determined focus on offering products or services that contribute to a more environmentally sustainable economy by making a more efficient use of limited global natural resources. The Underlying Index is designed to maximize exposure to the following six themes that impact the environment (“Environmental Impact Themes”): alternative energy, energy efficiency, green building, sustainable water, pollution prevention and control, and sustainable agriculture. The Underlying Index is composed of securities that are also components of the MSCI ACWI Investable Market Index (the “Parent Index”), an equity index composed of more than 9,200 securities of large-, mid- and small-capitalization companies located in both developed and emerging market countries around the world. Securities eligible for inclusion in the Underlying Index include American depositary receipts (“ADRs”), global depositary receipts (“GDRs”), and real estate investment trusts (“REITs”). Companies that derive 75% or more of their revenue cumulatively from the six Environmental Impact Themes are eligible for inclusion in the Underlying Index. Such companies are evaluated for their level of involvement in, and strategic commitment to, the six Environmental Impact Themes, based on the Index Provider’s internal environmental, social and governance (“ESG”) rating and score data. Once included in the Underlying Index, securities will remain constituents as long as the revenue they derive cumulatively from the six Environmental Impact Themes does not fall below 60%. The Underlying Index weights its constituents by their free-float adjusted market capitalization. The Index Provider constrains the weight of any single security in the Underlying Index to 5%.

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 April 30, 2022, on a market price basis, the Fund returned (15.57)%. On a net asset value “NAV”) basis, the Fund returned (15.38)%. During the same time period, the Index returned (13.58)%. 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, as well as the Fund’s holding of an ETF to replicate Indian securities in the Index.

During this same time period, the S&P 500^® Index (the “Benchmark Index”) returned 0.21%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 504 securities. The Benchmark Index was selected for its recognition in the marketplace and because its performance comparison is a useful measure for investors of a broad representation of the overall U.S. stock market.

The performance of the Fund differed from the Benchmark Index in part because the Fund seeks to track an Index that employs a proprietary stock selection and weighting methodology and focuses on providing exposure to Environmental Impact Themes, whereas the Benchmark Index selects and weights stocks based primarily on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the equity real estate investment trusts (REIT) industry and most underweight in the software industry during the fiscal year ended April 30, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during the period can be attributed to its stock selection in and overweight allocation to the electrical equipment industry.

For the fiscal year ended April 30, 2022, the food products industry contributed most significantly to the Fund’s return, followed by the semiconductors & semiconductor equipment industry. The electrical equipment industry was the largest detracting industry, followed by the automobiles and machinery industries, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended April 30, 2022, included Tesla, Inc., an automobiles company (portfolio average weight of 5.41%), and Plug Power, Inc., an electrical components and equipment company (no longer held at fiscal year-end). Positions that detracted most significantly from the Fund’s return during this period included NIO, Inc., ADR, an automobiles company (portfolio average weight of 4.73%) and Vestas Wind Systems A/S, a heavy electrical equipment company (portfolio average weight of 4.84).

Industry Breakdown (% of the Fund’s Net Assets) as of April 30, 2022
Equity REITs			18.43
Automobiles			13.90
Electrical Equipment			12.50
Semiconductors & Semiconductor Equipment			12.49
Independent Power and Renewable Electricity Producers			8.97
Road & Rail			6.37
Building Products			4.62
Food Products			4.13
Paper & Forest Products			3.73
Exchange-Traded Funds			3.15
Industry Types Each Less Than 3%			11.68
Money Market Funds Plus Other Assets Less Liabilities			0.03

Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of April 30, 2022
Security
Digital Realty Trust, Inc.			5.93
Vestas Wind Systems A/S			5.33
Tesla, Inc.			5.15
Enphase Energy, Inc.			4.36
Central Japan Railway Co.			3.84
NIO, Inc., ADR			3.56
iShares MSCI India ETF			3.15
Kingspan Group PLC			2.98
SolarEdge Technologies, Inc.			2.77
Li Auto, Inc., ADR			2.63
Total			39.70

 

*	Excluding money market fund holdings.

Fund Inception: October 24, 2006

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

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

Notes Regarding Indexes and Fund Performance History:

 

-	The Blended-MSCI Global Environment Select Index performance is comprised of the performance of The Cleantech IndexTM, the Fund’s previous underlying index, from Fund inception through March 24, 2021, followed by the performance of the Index for the period March 25, 2021 through April 30, 2022.

 

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

As an index fund, the Invesco Raymond James SB-1 Equity ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the Raymond James SB-1 Equity Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, Raymond James Research Services, LLC (the “Index Provider”) compiles, maintains, and calculates the Index, which is comprised of U.S.-listed equity securities that are rated Strong Buy 1 (“SB-1”) by an affiliate of the Index Provider (together, the affiliate and the Index Provider are referred to as “Raymond James”). SB-1 is Raymond James’ highest rating for a security and generally indicates Raymond James’ expectation that the security will achieve certain total return targets in the short-term. The Index includes equity securities of all market capitalizations, including common stocks, sponsored American depositary receipts (“ADRs”), real estate investment trusts (“REITs”), master limited partnerships (“MLPs”) and business development companies (“BDCs”) that are rated SB-1 by Raymond James. The Fund generally will invest in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended April 30, 2022, on a market price basis, the Fund returned (6.90)%. On a net asset value (“NAV”) basis, the Fund returned (6.78)%. During the same time period, the Index returned (6.07)%. During the fiscal year, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and expenses that the Fund incurred during the period.

During this same time period, the S&P MidCap 400^® Index (the “Benchmark Index”) returned (7.03)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 400 securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. mid-cap 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 primarily on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the energy sector and most underweight in the industrials sector during the fiscal year ended April 30, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during that period can be attributed to the Fund’s security selection and overweight in the energy sector, along with security selection and underweight in the industrials sector.

For the fiscal year ended April 30, 2022, the energy sector contributed most significantly to the Fund’s return, followed by the real estate sector. The health care sector was the largest detractor, followed by the information technology sector.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended April 30, 2022, included Marathon Oil Corp., an energy company (portfolio average weight of 0.95%) and Occidental Petroleum Corp., an energy company (portfolio average weight of 0.86%). Positions that detracted most significantly from the Fund’s return during this period included 89bio, Inc., a health care company (no longer held at fiscal year-end) and Ocular Therapeutix, Inc., a health care company (portfolio average weight of 0.34%).

 

Sector Breakdown (% of the Fund’s Net Assets) as of April 30, 2022
Financials			20.72
Information Technology			16.36
Health Care			11.65
Real Estate			11.29
Industrials			10.92
Energy			10.46
Consumer Discretionary			9.78
Communication Services			5.06
Sector Types Each Less Than 3%			3.75
Money Market Funds Plus Other Assets Less Liabilities			0.01
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of April 30, 2022
Security
Avnet, Inc.			0.59
Mohawk Industries, Inc.			0.59
Valero Energy Corp.			0.58
Black Stone Minerals L.P.			0.57
Olaplex Holdings, Inc.			0.57
Sunnova Energy International, Inc.			0.57
EngageSmart, Inc.			0.57
I3 Verticals, Inc., Class A			0.57
Redwood Trust, Inc.			0.56
QUALCOMM, Inc.			0.56
Total			5.73

 

*	Excluding money market fund holdings.

Guggenheim Raymond James SB-1 Equity ETF (the “Predecessor Fund”) Inception: May 19, 2006

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

invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

 

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

As an index fund, the Invesco S&P 500 BuyWrite ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the CBOE S&P 500 BuyWrite Index^SM (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index and will write (sell) call options thereon. Strictly in accordance with its guidelines and mandated procedures, the Chicago Board Options Exchange, Incorporated (the “Index Provider”) compiles, calculates and maintains the Index, which is a total return benchmark index that is designed to track the performance of a hypothetical “buy-write” strategy on the S&P 500^® Index.

The Index is based on (1) buying an S&P 500 stock index portfolio, and (2) “writing” (or selling) the near-term S&P 500^® Index “covered” call option, generally on the third Friday of each month. A “buy-write,” also called a covered call, generally is considered an investment strategy in which an investor buys a stock or basket of stocks, and sells call options that correspond to the stock or basket of stocks. In return for a premium, the Fund gives the right to the purchaser of the option written by the Fund to receive a cash payment equal to the difference between the value of the S&P 500^® Index and the exercise price, if the value on the expiration date is above the exercise price. In addition, covered call options partially hedge against a decline in the price of the securities on which they are written to the extent of the premium the Fund receives. The Fund will write options that are traded on national securities exchanges. 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 April 30, 2022, on a market price basis, the Fund returned 7.86%. On a net asset value (“NAV”) basis, the Fund returned 8.06%. During the same time period, the Index returned 8.57%. 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, as well as slippage around the reinvestment of dividends received from the underlying portfolio holdings and trading costs incurred around portfolio rebalances. During this same time period, the S&P 500^® Index returned 0.21%.

For the fiscal year ended April 30, 2022, the Fund’s covered call options contributed most significantly to the Fund’s return, followed by the energy and health care sectors, respectively. The communication services and consumer discretionary sectors detracted most significantly from the Fund’s return.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended April 30, 2022, included the SPX 4/14/2022 covered call contract, a short S&P 500 Index call contract (no longer held at fiscal year-end) and the SPX 05/20/2022 covered call contract, a short S&P 500 Index call contract. Positions that detracted most significantly from the

Fund’s return during this period included the SPX 11/19/2021 covered call contract, a short S&P 500 Index call contract (no longer held at fiscal year-end) and the SPX 07/16/2021 covered call contract, a short S&P 500 Index call contract (no longer held at fiscal year-end).

 

Sector Breakdown (% of the Fund’s Net Assets) as of April 30, 2022
Information Technology			27.44
Health Care			14.23
Consumer Discretionary			11.49
Financials			10.98
Communication Services			8.66
Industrials			7.84
Consumer Staples			6.84
Energy			4.18
Sector Types Each Less Than 3%			8.58
Other Assets Less Liabilities			(0.24)
Top Ten Fund Holdings (% of the Fund’s Net Assets) as of April 30, 2022
Security
Apple, Inc.			7.01
Microsoft Corp.			5.97
Amazon.com, Inc.			3.12
Tesla, Inc.			2.09
Alphabet, Inc., Class A			1.97
Alphabet, Inc., Class C			1.83
Berkshire Hathaway, Inc., Class B			1.70
UnitedHealth Group, Inc.			1.37
Johnson & Johnson			1.36
NVIDIA Corp.			1.33
Total			27.75

Fund Inception: December 20, 2007

Performance quoted above represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate, and shares of the Fund (“Fund Shares”), when redeemed or sold, may be worth more or less than their original cost. Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.49% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund

distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

As an index fund, the Invesco S&P 500^® Quality ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S&P 500^® Quality Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is composed of a subset of securities from the S&P 500^® Index that have high “quality,” as determined by the Index Provider based on the following three fundamental measures: return on equity, accruals ratio and financial leverage ratio. Return-on-equity is calculated as the company’s trailing 12-month earnings per share divided by the company’s latest book value per share. Accruals ratio is computed using the change of the company’s net operating assets over the last year divided by the company’s average net operating assets over the last two years. Financial leverage is calculated as the company’s latest total debt divided by the company’s book value.

In selecting constituent securities for the Index, the Index Provider calculates the quality score of each security in the S&P 500^® Index and then selects the 100 stocks with the highest quality score for inclusion in the Index. The Index Provider weights each component stock of the Index by the total of its quality score multiplied by its market capitalization. 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 April 30, 2022, on a market price basis, the Fund returned 2.70%. On a net asset value (“NAV”) basis, the Fund returned 2.76%. During the same time period, the Index returned 2.92%. 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^® Index returned 0.21%.

For the fiscal year ended April 30, 2022, the information technology sector contributed most significantly to the Fund’s return, followed by the consumer staples and energy sectors, respectively. The financials sector detracted most significantly from the Fund’s return during this period, followed by the industrials and consumer discretionary sectors, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended April 30, 2022, included NVIDIA Corp., an information technology company (no longer held at fiscal year-end) and Apple, Inc., an information technology company (portfolio average weight of 5.29%). Positions that detracted most significantly from the Fund’s return during this period included Moderna, Inc., a health care company (portfolio average weight of 0.68%) and JPMorgan Chase & Co., a financials company (portfolio average weight of 4.08%).

Sector Breakdown (% of the Fund’s Net Assets) as of April 30, 2022
Information Technology			34.42
Financials			23.79
Health Care			12.93
Industrials			9.63
Consumer Discretionary			6.77
Energy			4.06
Materials			3.93
Consumer Staples			3.46
Sector Types Each Less Than 3%			0.95
Money Market Funds Plus Other Assets Less Liabilities			0.06
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of April 30, 2022
Security
Apple, Inc.			5.11
Visa, Inc., Class A			5.11
Mastercard, Inc., Class A			4.94
Microsoft Corp.			4.71
Pfizer, Inc.			4.55
JPMorgan Chase & Co.			4.22
Bank of America Corp.			4.01
Wells Fargo & Co.			3.22
Walmart, Inc.			3.02
Adobe, Inc.			2.69
Total			41.58

 

*	Excluding money market fund holdings.

Fund Inception: December 6, 2005

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 current prospectus for more information. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2024. According to the Fund’s current prospectus, the total gross annual operating expense ratio was indicated as 0.19% and the net annual operating expense ratio was indicated as 0.15%. The Financial Highlights section of the Shareholder Report presents the expense ratios based on expenses incurred during the period covered by this report. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

-

The Blended—S&P 500® Quality Index is comprised of the performance of the Value Line Timeliness Select Index, the Fund’s underlying index from Fund inception through the conversion date, June 29, 2010, followed by the performance of the S&P 500® High Quality Rankings Index, the Fund’s underlying index for the period June 29, 2010 through March 18, 2016, followed by the performance of the Index for the period March 18, 2016 through April 30, 2022.

 

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

As an index fund, the Invesco S&P Spin-Off ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S&P U.S. Spin-Off Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices LLC (the “Index Provider”) compiles and maintains the Index, which is designed to measure the performance of U.S. companies that have been spun off from a parent company within the past four years. The Index is comprised of equity securities of U.S. companies added to the S&P U.S. BMI, a country sub-index of the S&P Global BMI, that have been spun off and have a float-adjusted market capitalization of at least $1 billion at the time they are added to the Index. The Index Provider defines a spin-off company as any company resulting from one of the following events: spin-off, carve-out or split-off. 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 April 30, 2022, on a market price basis, the Fund returned (11.16)%. On a net asset value (“NAV”) basis, the Fund returned (11.24)%. During the same time period, the Index returned (10.65)%. 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, partially offset by income received from the securities lending program in which the Fund participates.

During this same time period, the Russell Midcap^® Index (the “Benchmark Index”) returned (6.10)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 823 equity securities. The Benchmark Index was selected for its recognition in the marketplace, and because its performance comparison is a useful measure for investors as a broad representation of the U.S. midcap equity market.

The performance of the Fund differed from the Benchmark Index in part 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 primarily on market capitalization.

Relative to the Benchmark Index, the Fund was most overweight in the industrials sector and most underweight the financials sector during the fiscal year ended April 30, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during that period can be attributed to the Fund’s overweight exposure to and security selection in the consumer discretionary sector along with its overweight exposure to and security selection in the industrials sector.

For the fiscal year ended April 30, 2022, the materials sector contributed most significantly to the Fund’s return, followed by the utilities sector. The consumer discretionary sector was the largest detractor followed by the industrials sector.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended April 30, 2022, included Constellation Energy Corp., a utilities company (portfolio average weight of 1.49%) and Corteva, Inc., a materials company (portfolio average weight of 7.61%). Positions that detracted most significantly from the Fund’s return during this period included Penn National Gaming, Inc., a consumer discretionary company (portfolio average weight of 5.49%) and Vimeo, Inc., a communication services company (portfolio average weight of 2.17%).

 

Sector Breakdown (% of the Fund’s Net Assets) as of April 30, 2022
Industrials			30.95
Materials			16.01
Consumer Discretionary			14.06
Information Technology			9.56
Energy			8.45
Utilities			7.67
Health Care			6.42
Real Estate			4.59
Communication Services			2.36
Money Market Funds Plus Other Assets Less Liabilities			(0.07)
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of April 30, 2022
Security
Dow, Inc.			8.33
Corteva, Inc.			7.68
Constellation Energy Corp.			7.67
Otis Worldwide Corp.			7.38
Carrier Global Corp.			6.74
Wyndham Hotels & Resorts, Inc.			4.72
Concentrix Corp.			4.48
Organon & Co.			4.21
GXO Logistics, Inc.			4.19
Apartment Income REIT Corp.			4.07
Total			59.47

 

*	Excluding money market fund holdings.