Domestic Equity

The fiscal year began with increasing volatility and the US stock market saw a selloff through most of September due to increasing concerns of inflation resulting from a spike in oil prices and supply chain shortages causing rising costs. Despite the Consumer Price Index (CPI) increasing monthly from June through September 2021,¹ the US Federal Reserve (the Fed) declined to raise interest rates at its September 2021 Federal Open Market Committee meeting.

Equity markets saw continued volatility in the fourth quarter of 2021 amid record inflation and the emergence of a new COVID-19 variant. Pandemic-related supply chain disruption and labor shortages intensified during the quarter, resulting in broadly higher input costs for companies and consumers alike. Additionally, the price of oil rose to nearly $85 per barrel in October,² 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 prior 12 months, the highest since 1982.¹ 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 the 2021 year-end.

Equity markets declined in the first quarter of 2022 amid volatility sparked by Russia’s invasion of Ukraine, rising commodity prices, rampant global inflation and the Fed’s shift toward tighter monetary policy. Russia’s invasion exacerbated 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 2008.² The CPI rose by another 7.9% for the 12 months ended February 2022 reaching a 40 year high.¹ To combat inflation, the Fed raised the federal funds rate by a one-quarter percentage point in March.

As the war in Ukraine continued and corporate earnings in high-profile names, like Netflix, reported slowing growth and profits, the equity markets sold off for much of April 2022. The downward direction of the equity markets continued for much of the second quarter of 2022 amid record inflation, rising interest rates and an increasing likelihood of a US recession. Driven by higher food and energy prices, the CPI rose by yet another 8.6% for the 12 months ended May 2022 reaching a 40 year high.¹ Oil prices peaked near $122 per barrel in early June, resulting in skyrocketing gasoline prices; the national average price reached a record high above $5 per gallon in early June.² To tame inflation, the Fed raised the benchmark federal funds rate three more times, by 0.50% in May, by 0.75% in June and another 0.75% in July, which were the largest increases in nearly 30 years.³ US

equity markets rose in July and much of August until Fed chairman Jerome Powell’s hawkish comments at Jackson Hole, Wyoming, an economic policy symposium, sparked a sharp selloff at month end. Due to declining energy prices, the CPI rose by 8.5% for the 12 months ending July,¹ down slightly from June, but still at multi-decade highs and far above the Fed’s 2% annual inflation target. As a result, the Fed indicated that it would continue taking aggressive action to curb inflation, though such measures could “bring pain to households and businesses.” The remarks deflated investor optimism that the Fed would pause rate hikes in the second half of 2022 and increased the likelihood of a US recession. In this environment, US stocks had negative double-digit returns of (11.23)% for the fiscal year ended August 31, 2022, measured by the S&P 500 Index.⁴

 

1	Source: US Bureau of Labor Statistics

2	Source: Bloomberg LP

3	Source: US Federal Reserve

4	Source: Lipper Inc.

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 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, 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, 2022, on a market price basis, the Fund returned (15.33)%. On a net asset value (“NAV”) basis, the Fund returned (15.59)%. During the same time period, the Index returned (15.34)%. 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 September, which coincided with the overall market decline.

During this same time period, the S&P 500^® Financials Index (the “Benchmark Index”) returned (12.37)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 66 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 regional banks sub-industry and most underweight in the multi-sector holdings sub-industry during the fiscal year ended August 31, 2022. The majority of the Fund’s underperformance relative to the Benchmark Index during the period can be attributed to the Fund’s underweight allocation to the multi-sector holdings and property & casualty insurance sub-industries, respectively.

For the fiscal year ended August 31, 2022, no sub-industries contributed positively to the Fund’s return. The diversified banks sub-industry detracted most significantly from the Fund’s return during the period, followed by the regional banks sub-industry.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included M&T Bank Corp., a regional banks company (portfolio average weight of 3.57%) and First Horizon Corp., a regional banks company (portfolio average weight of 1.71%). Positions that detracted most significantly from the Fund’s return included JPMorgan Chase & Co., a diversified banks company (portfolio average weight of 7.80%) and Citigroup, Inc., a diversified banks company (portfolio average weight of 7.71%).

 

Sub-Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Regional Banks			44.43
Diversified Banks			39.58
Asset Management & Custody Banks			11.50
Consumer Finance			3.65
Sub-Industry Types Each Less Than 3%			0.79
Money Market Funds Plus Other Assets Less Liabilities			0.05
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
Wells Fargo & Co.			8.42
Citigroup, Inc.			8.05
Bank of America Corp.			7.96
JPMorgan Chase & Co.			7.58
U.S. Bancorp			7.57
M&T Bank Corp.			4.45
First Republic Bank			4.31
State Street Corp.			4.15
Truist Financial Corp.			4.15
PNC Financial Services Group, Inc. (The)			3.97
Total			60.61

 

*	Excluding money market fund holdings

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.

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 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, 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, 2022, on a market price basis, the Fund returned (9.14)%. On a net asset value (“NAV”) basis, the Fund returned (9.15)%. During the same time period, the Index returned (8.90)%. 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 which were partially offset by proceeds from the securities lending program in which the Fund participates.

During this same time period, the S&P 500^® Financials Index (the “Benchmark Index”) returned (12.37)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 66 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, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s security selection in the asset management & custody banks sub-industry and underweight allocation to the diversified banks sub-industry.

For the fiscal year ended August 31, 2022, the life & health insurance sub-industry contributed most significantly to the Fund’s

return, followed by the thrifts & mortgage finance sub-industry. The mortgage REITs sub-industry detracted most significantly from the Fund’s return during the period, followed by the property & casualty insurance sub-industry.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Unum Group, a life & health insurance company (portfolio average weight of 1.61%) and Carlyle Secured Lending, Inc, an asset management & custody banks company (portfolio average weight of 3.14%). Positions that detracted most significantly from the Fund’s return included Sculptor Capital Management, Inc. Class A, an asset management & custody banks company (no longer held at fiscal year-end) and ARMOUR Residential REIT, Inc., a mortgage REITs company (portfolio average weight of 4.23%).

 

Sub-Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Mortgage REITs			38.66
Closed-End Funds			21.52
Asset Management & Custody Banks			16.41
Investment Banking & Brokerage			5.44
Regional Banks			3.64
Thrifts & Mortgage Finance			3.53
Sub-Industry Types Each Less Than 3%			10.68
Money Market Funds Plus Other Assets Less Liabilities			0.12
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
ARMOUR Residential REIT, Inc.			4.83
Annaly Capital Management, Inc.			4.21
FS KKR Capital Corp.			4.07
Two Harbors Investment Corp.			3.75
AGNC Investment Corp.			3.73
Ellington Financial, Inc.			3.57
PennyMac Mortgage Investment Trust			3.45
MidCap Financial Investment Corp.			3.44
Newtek Business Services Corp.			3.43
Ready Capital Corp.			3.31
Total			37.79

 

*	Excluding money market fund holdings

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 2.59% includes the unitary management fee of 0.35% and acquired fund fees and expenses of 2.24%. 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.

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 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, 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, 2022, on a market price basis, the Fund returned (2.06)%. On a net asset value (“NAV”) basis, the Fund returned (2.23)%. During the same time period, the Index returned (1.74)%. 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 as well as costs associated with portfolio rebalancing.

During this same time period, the Dow Jones U.S. Real Estate Index (the “Benchmark Index”) returned (11.31)%. The Benchmark Index is an unmanaged index weighted by market capitalization and based on the average performance of approximately 83 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 health care REITs sub-industry and most underweight in the specialized REITs sub-industry during the fiscal year ended August 31, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s security selection in the residential REITs and health care REITs sub-industries.

For the fiscal year ended August 31, 2022, the residential REITs sub-industry contributed most significantly to the Fund’s return, followed by the health care REITs sub-industry. The industrial REITs sub-industry detracted most significantly from the Fund’s return during the period, followed by the office REITs sub-industry.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Bluerock Residential Growth REIT, Inc., a residential REITs company (no longer held at fiscal year-end), and Preferred Apartment Communities, Inc., a diversified REITs company (no longer held at fiscal year-end). Positions that detracted most significantly from the Fund’s return included Industrial Logistics Properties Trust, an industrial REITs company (portfolio average weight of 3.25%) and Office Properties Income Trust, an office REITs company (portfolio average weight of 5.26%).

 

REIT Sub-Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Health Care REITs			26.47
Retail REITs			19.98
Diversified REITs			16.83
Office REITs			14.07
Specialized REITs			10.23
Industrial REITs			10.09
Residential REITs			2.32
Money Market Funds Plus Other Assets Less Liabilities			0.01
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
Global Net Lease, Inc.			6.45
Necessity Retail REIT, Inc. (The)			6.11
Omega Healthcare Investors, Inc.			6.06
Office Properties Income Trust			5.22
Sabra Health Care REIT, Inc.			4.57
CareTrust REIT, Inc.			4.31
LTC Properties, Inc.			4.26
National Health Investors, Inc.			4.21
Gladstone Commercial Corp.			4.03
Getty Realty Corp.			3.95
Total			49.17

 

*	Excluding money market fund holdings

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.

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 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, 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, 2022, on a market price basis, the Fund returned (1.79)%. On a net asset value (“NAV”) basis, the Fund returned (1.98)%. During the same time period, the Index returned (1.67)%. 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 7.13%. 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, 2022. The majority of the Fund’s underperformance 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, 2022, there were no sub-industries that contributed to the Fund’s return during the period. The reinsurance sub-industry detracted most significantly 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, 2022, included Progressive Corp. (The), a property & casualty insurance company (portfolio

average weight of 8.28%), and W.R. Berkley Corp., a property & casualty insurance company (portfolio average weight of 4.19%). Positions that detracted most significantly from the Fund’s return included Mercury General Corp., a property & casualty company (portfolio average weight of 2.69%) and Kemper Corp., a property & casualty insurance company (portfolio average weight of 3.38%).

 

Sub-Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Property & Casualty Insurance			73.34
Multi-line Insurance			17.48
Reinsurance			8.98
Money Market Funds Plus Other Assets Less Liabilities			0.20
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
Progressive Corp. (The)			9.11
Travelers Cos., Inc. (The)			8.00
Chubb Ltd.			7.93
American International Group, Inc.			7.82
Allstate Corp. (The)			7.81
Selective Insurance Group, Inc.			4.44
Arch Capital Group Ltd.			4.27
Everest Re Group Ltd.			4.22
W.R. Berkley Corp.			4.04
AXIS Capital Holdings Ltd.			4.02
Total			61.66

 

*	Excluding money market fund holdings

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.

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 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, 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, 2022, on a market price basis, the Fund returned (0.49)%. On a net asset value (“NAV”) basis, the Fund returned (0.79)%. During the same time period, the Index returned (0.45)%. 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 (15.64)%. 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, 2022. The majority of the Fund’s outperformance relative to the Benchmark Index during the period can be attributed to the Fund’s overweight allocation to and security selection in the regional banks sub-industry.

For the fiscal year ended August 31, 2022, the thrifts and mortgage finance sub-industry contributed most significantly to the Fund’s return. The regional banks sub-industry detracted most significantly 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, 2022, included CVB Financial Corp., a regional banks company (portfolio average weight of 1.92%), and Cullen/Frost Bankers, Inc., a regional banks company (portfolio average weight of 3.88%). Positions that detracted most significantly from the Fund’s return included PacWest Bancorp, a regional banks company (portfolio average weight of 1.87%) and Western Alliance Bancorporation, a regional banks company (portfolio average weight of 3.88%).

 

Sub-Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Regional Banks			96.85
Thrifts & Mortgage Finance			2.98
Money Market Funds Plus Other Assets Less Liabilities			0.17
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
East West Bancorp, Inc.			3.97
Cullen/Frost Bankers, Inc.			3.96
Commerce Bancshares, Inc.			3.95
Webster Financial Corp.			3.88
Western Alliance Bancorporation			3.81
United Community Banks, Inc.			2.16
CVB Financial Corp.			2.14
First Interstate BancSystem, Inc., Class A			2.14
Old National Bancorp			2.12
Glacier Bancorp Inc.			2.12
Total			30.25

 

*	Excluding money market fund holdings

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.

		Shares				Value
Common Stocks & Other Equity Interests-99.95%
Asset Management & Custody Banks-11.50%
Bank of New York Mellon Corp. (The)(b)			1,861,557			$	77,310,462
Northern Trust Corp.			708,981				67,417,004
State Street Corp.			1,196,957				81,812,011
							226,539,477
Consumer Finance-3.65%
Capital One Financial Corp.			678,610				71,810,510
Diversified Banks-39.58%
Bank of America Corp.			4,664,917				156,787,860
Citigroup, Inc.			3,249,112				158,589,157
JPMorgan Chase & Co.			1,312,373				149,256,181
U.S. Bancorp			3,269,930				149,141,507
Wells Fargo & Co.			3,791,464				165,724,892
							779,499,597
Regional Banks-44.43%
Citizens Financial Group, Inc.			1,685,668				61,830,302
Comerica, Inc.			444,892				35,724,828
Fifth Third Bancorp(b)			2,200,549				75,148,748
First Horizon Corp.			1,819,821				41,164,351
First Republic Bank(b)			559,676				84,975,607
Huntington Bancshares, Inc.(b)			4,896,531				65,613,515
KeyCorp			3,172,565				56,122,675
M&T Bank Corp.			482,124				87,640,501
PNC Financial Services Group, Inc. (The)			494,649				78,154,542
Regions Financial Corp.			3,179,469				68,899,093
Signature Bank(b)			214,102				37,330,825

		Shares				Value
Regional Banks-(continued)
SVB Financial Group(b)(c)			177,596			$	72,196,326
Truist Financial Corp.			1,744,421				81,708,680
Zions Bancorporation N.A.			514,972				28,338,909
							874,848,902
Thrifts & Mortgage Finance-0.79%
New York Community Bancorp, Inc.(b)			1,589,013				15,556,437
TOTAL INVESTMENTS IN SECURITIES (excluding investments purchased with cash collateral from securities on loan)-99.95% (Cost $2,537,213,701)							1,968,254,923
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds-1.09%
Invesco Private Government Fund, 2.29%(d)(e)(f)			6,003,556				6,003,556
Invesco Private Prime Fund, 2.37%(d)(e)(f)			15,436,171				15,437,715
Total Investments Purchased with Cash Collateral from Securities on Loan (Cost $21,440,395)							21,441,271
TOTAL INVESTMENTS IN SECURITIES-101.04% (Cost $2,558,654,096)							1,989,696,194
OTHER ASSETS LESS LIABILITIES-(1.04)%							(20,495,165	)
NET ASSETS-100.00%						$	1,969,201,029

		Shares				Value
Common Stocks & Other Equity Interests-78.36%
Asset Management & Custody Banks-16.41%
Artisan Partners Asset Management, Inc., Class A(b)			282,274			$	9,529,570
BlackRock TCP Capital Corp.(b)			911,409				12,358,706
Carlyle Secured Lending, Inc., BDC(b)			870,816				12,531,043
MidCap Financial Investment Corp.(b)			1,104,742				14,549,452
Newtek Business Services Corp., BDC(b)			679,102				14,512,410
Patria Investments Ltd., Class A (Cayman Islands)			409,038				5,910,599
							69,391,780
Consumer Finance-2.22%
OneMain Holdings, Inc.(b)			268,150				9,366,480
Diversified Banks-1.86%
Bank of NT Butterfield & Son Ltd. (The) (Bermuda)			241,748				7,885,820
Investment Banking & Brokerage-5.44%
B. Riley Financial, Inc.			185,496				9,232,136
Lazard Ltd., Class A			207,143				7,529,648
Moelis & Co., Class A(b)			149,344				6,221,671
							22,983,455
Life & Health Insurance-2.54%
Prudential Financial, Inc.			58,249				5,577,342
Unum Group			136,319				5,159,674
							10,737,016
Mortgage REITs-38.66%
AGNC Investment Corp.			1,318,837				15,760,102
Annaly Capital Management, Inc.(b)			2,759,081				17,796,072
Apollo Commercial Real Estate Finance, Inc.(b)			1,183,456				13,787,262
ARMOUR Residential REIT, Inc.(b)			2,876,215				20,421,127
Broadmark Realty Capital, Inc.			2,107,045				13,590,440
Dynex Capital, Inc.(b)			804,331				12,475,174
Ellington Financial, Inc.			1,027,670				15,086,196
PennyMac Mortgage Investment Trust(b)			983,750				14,608,688
Ready Capital Corp.(b)			1,067,918				13,989,726
Rithm Capital Corp.(b)			1,072,822				10,116,711
Two Harbors Investment Corp.(b)			3,266,705				15,843,519
							163,475,017
Property & Casualty Insurance-2.82%
James River Group Holdings Ltd.			42,256				1,004,002
Mercury General Corp.(b)			145,467				4,640,397
Universal Insurance Holdings, Inc.(b)			526,840				6,290,470
							11,934,869

Investment Abbreviations:

BDC -Business Development Company

REIT -Real Estate Investment Trust

		Shares				Value
Regional Banks-3.64%
Heritage Commerce Corp.			541,454			$	6,113,015
Northwest Bancshares, Inc.(b)			659,582				9,280,319
							15,393,334
Thrifts & Mortgage Finance-3.53%
New York Community Bancorp, Inc.(b)			935,251				9,156,107
Provident Financial Services, Inc.			248,812				5,779,903
							14,936,010
Trading Companies & Distributors-1.24%
Triton International Ltd. (Bermuda)			87,762				5,229,738
Total Common Stocks & Other Equity Interests (Cost $345,873,810)							331,333,519
Closed-End Funds-21.52%
Bain Capital Specialty Finance, Inc., BDC(b)			872,816				12,856,580
FS KKR Capital Corp., BDC(b)			797,147				17,202,432
Goldman Sachs BDC, Inc., BDC(b)			753,485				12,824,315
New Mountain Finance Corp., BDC(b)			983,255				12,910,138
Oaktree Specialty Lending Corp., BDC			1,877,190				12,990,155
Owl Rock Capital Corp., BDC(b)			923,816				12,138,942
WhiteHorse Finance, Inc., BDC(b)			687,453				10,071,186
							90,993,748
Total Closed-End Funds (Cost $89,510,789)							90,993,748
TOTAL INVESTMENTS IN SECURITIES (excluding investments purchased with cash collateral from securities on loan)-99.88% (Cost $435,384,599)							422,327,267
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds-22.51%
Invesco Private Government Fund, 2.29%(c)(d)(e)			26,654,039				26,654,039
Invesco Private Prime Fund, 2.37%(c)(d)(e)			68,541,052				68,547,907
Total Investments Purchased with Cash Collateral from Securities on Loan (Cost $95,199,575)							95,201,946
TOTAL INVESTMENTS IN SECURITIES-122.39% (Cost $530,584,174)							517,529,213
OTHER ASSETS LESS LIABILITIES-(22.39)%							(94,677,360	)
NET ASSETS-100.00%						$	422,851,853