Domestic Equity

At the start of the fiscal year, US equity markets rebounded, despite mixed data on the economy and corporate earnings. However, the US Federal Reserve’s (the Fed’s) message that rate hikes would continue until data showed inflation meaningfully declining, sent markets lower in December 2022. As energy prices declined, the rate of inflation slowed modestly in the fourth quarter of 2022. Corporate earnings generally met expectations, though companies provided cautious future guidance. With inflation still at multi-decade highs and little evidence of a slowing economy, the Fed raised its target rate by 0.75% in November and by 0.50% in December.¹

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

The US economy and equity markets remained resilient in the second quarter of 2023, as milder inflation data and better-than-expected corporate earnings supported equities, with most major indexes posting gains for the quarter and with some big tech names providing optimistic future guidance. Following the March banking crisis, markets stabilized in April, as corporate earnings season got underway, with many companies surprising consensus earnings and revenue estimates. Facing persistently strong employment data, the Fed raised the federal funds rate by 0.25% at its May meeting,¹ but left rates unchanged at its June meeting, giving investors the long-awaited “pause” in rate hikes, which sent equities broadly higher.

Equity markets declined in the third quarter and into October 2023 as a resilient US economy complicated the Fed’s efforts to tame inflation. While inflation has slowed from its peak, the Consumer Price Index (CPI) rose by 0.2% in July, and the 12-month headline inflation rate rose to 3.2% from 3% in June.² Due to the persistence of inflation, the Fed raised the federal funds rate in July by 0.25% again. The CPI data released in September was higher-than-expected and the overall US labor market remained tight with unemployment

near historic lows. At the same time, wages rose and consumers continued to spend, pushing the third quarter year-over-year Gross Domestic Product (GDP) to 4.9%, far above expectations.² Despite the higher-than-expected GDP for the third quarter of 2023, the Fed held interest rates steady at its September and October meetings, but left open the possibility of another rate hike before the end of the calendar year.¹

Despite higher rates and increased market volatility, US stocks for the fiscal year had positive returns of 10.69%, as measured by the S&P 500 Index.³

 

1	Source: US Federal Reserve

2	Source: US Bureau of Labor Statistics

3	Source: Lipper Inc.

Fixed Income

The beginning of the fiscal year was headlined by the US Federal Reserve (the Fed) continuing its rapid tightening of monetary policy in an effort to combat inflation via higher interest rates, while simultaneously engineering a soft landing so as to not push the economy into a recession. The Fed aggressively raised its federal funds rate at the beginning of the fiscal year: a 0.75% hike in November 2022, its largest hike since 1994, a 0.50% hike in December and a 0.25% hike in January, to a target federal funds rate of 4.50% to 4.75%.¹

A January 2023 rally gave way to a February selloff as higher-than-expected inflation, a tight labor market and solid economic growth indicated that the Fed’s monetary policy would remain tight for the foreseeable future, raising the risk of a deeper than expected recession. In March, significant volatility plagued fixed income markets as the failure of two US regional banks, Silicon Valley Bank and Signature Bank, prompted steep losses in the banking sector. The subsequent takeover of Credit Suisse and ongoing fear that bank troubles would spread pushed overall corporate spread premiums wider over the fiscal year. However, issues did not seem to be systemic, as policymakers responded swiftly which calmed markets. The Fed, aiming to further stabilize markets, continued course with its hawkish policy and announced two 0.25% hikes in March and May, resulting in a target federal funds rate of 5.00% to 5.25%.¹ Markets stabilized due to milder inflation data and better-than-expected corporate earnings.

Through the second quarter of 2023, global economic growth remained resilient but bifurcated as emerging markets and Asian economies showed robust growth while developed western economies had sluggish yet positive growth. US labor markets maintained momentum with unemployment still at historic lows despite a slight uptick at the end of May. Inflation generally eased in developed economies, largely driven by moderation in the goods component of inflation. However, core

inflation remained more stubborn and led developed country central banks to continue tightening, showcased by another 0.25% hike by the Fed in July, increasing the target rate from 5.25% to 5.50%, its highest level since June 2006.¹ While rates remained elevated across all maturities on the yield curve, the two-year Treasury rates increased from 3.45% to 4.85% during the fiscal year, while 10-year Treasury rates increased from 3.53% to 4.48%.² At the end of the fiscal year, the yield curve remained inverted. Additionally, in August, US debt was downgraded by the Fitch credit rating agency from AAA to AA^† on the premise of expected fiscal deterioration over the next three years.³ Despite the higher-than-expected Gross Domestic Product for the third quarter, the Fed held interest rates steady at its September and October 2023 meetings, but left open the possibility of another rate hike before the end of the calendar year.¹ As of the end of the fiscal year, we believe markets have priced in that the Fed is near the end or has finished its interest rate hiking cycle, with the expectation that the US is likely to avoid a substantial broad-based recession. We anticipate economic activity will remain relatively resilient. In the US, we believe rate hikes are ending and inflation will continue to fall significantly, albeit imperfectly. As we enter 2024, we expect a more positive growth outlook to unfold as the US economy recovers.

 

1	Source: Federal Reserve of Economic Data

2	Source: US Department of the Treasury

3	Source: Fitch Ratings

†

A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest); ratings are subject to change without notice. Not Rated indicates the debtor was not rated and should not be interpreted as indicating low quality. For more information on S&P Global Ratings’ rating methodology, please visit spglobal.com and select ‘Understanding Credit Ratings’ under ‘AboutRatings’ on the homepage. For more information on Moody’s rating methodology, please visit ratings.moodys.com and select ‘RatingMethodologies’ on the homepage.

The Invesco AAA CLO Floating Rate Note ETF (the “Fund”) is an actively managed exchange-traded fund (“ETF”) whose investment objective is to seek current income and capital preservation. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in floating rate note securities issued by collateralized loan obligations (“CLOs”) that are rated AAA (or equivalent by a nationally recognized statistical rating organization (“NRSRO”)) at the time of purchase. The Fund may invest in CLO securities of any maturity. A CLO is a trust that issues fixed- or floating-rate debt securities that are collateralized by a pool of loans, which may include domestic and foreign senior secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans. The underlying loans in a CLO are selected by the CLO’s manager. The Fund may purchase CLO securities both in the primary markets (e.g. purchased directly from the issuer) and secondary markets.

The Fund may invest in CLO securities that are unrated, in which case the Fund’s sub-adviser, Invesco Senior Secured Management, Inc. (the “Sub-Adviser”), may internally assign ratings to certain of those securities, after assessing their credit quality, in categories similar to those of NRSROs. In such instances, unrated CLO securities will be counted toward the 80% investment strategy if determined to be equivalent to an AAA rating by the Sub-Adviser.

The Fund may invest up to 15% of its net assets in below AAA- rated CLO securities with a minimum rating of AA at the time of purchase, or if unrated, determined to be of comparable credit quality by the Sub-Adviser. The Fund will not invest in CLO securities that have a rating that is below AA (or equivalent by an NRSRO) at the time of purchase.

The Fund may invest up to 20% of its net assets in CLO securities that are denominated in foreign currencies.

The Fund will primarily invest in CLOs whose underlying loan collateral is almost entirely comprised of broadly syndicated loans (i.e., loans with offering sizes that are typically greater than $250 million). The Fund may, however, invest up to 15% of its net assets in “middle-market CLOs,” which are CLOs whose underlying loan collateral is substantially comprised of middle market loans (i.e., loans with offering sizes generally below $250 million).

The Fund will limit its investment in fixed-rate CLO securities to a maximum of 15% of its net assets at the time of purchase.

In selecting securities for the Fund’s portfolio, the Sub-Adviser utilizes a combination of “top-down”, macroeconomic-driven investment approach and a fundamental “bottom-up” approach, which leverages the Sub-Adviser’s experience as a frequent CLO issuer and manager as well as experience in the loan market in managing various retail and institutional loan funds.

During the fiscal period from the Fund’s inception (December 9, 2022, the first day of trading on the exchange) through October 31, 2023, on a market price basis, the Fund returned 7.25%. On a net asset value (“NAV”) basis, the Fund returned 7.51%. During the same time period, the JP Morgan CLOIE AAA Total Return Index (USD) (the “Benchmark Index”) returned 7.49%. The majority of the Fund’s outperformance, on an NAV basis, relative to the Benchmark Index can be attributed to the Fund’s security selection.

Positions that contributed most significantly to the Fund’s absolute return included Rad CLO 5 Ltd., 7.36% coupon, due 07/24/2032 (portfolio average weight of 5.97%) and Cedar Funding XI CLO Ltd., 6.72% coupon, due 05/29/2032 (portfolio average weight of 5.12%). Positions that detracted most significantly from the Fund’s absolute return included Elmwood CLO IX Ltd., 6.75% coupon; due 04/22/2035 (no longer held at fiscal year-end) and Eaton Vance CLO Ltd., 6.76% coupon; 04/15/2031 (no longer held at fiscal year-end).

 

Duration Breakdown (% of the Fund’s Net Assets) as of October 31, 2023
Maturing in 6-10 Years			49.76
Maturing in 11-15 Years			48.83
Money Market Funds Plus Other Assets Less Liabilities			1.41
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of October 31, 2023
Security
Rad CLO 5 Ltd., Series 2019-5A, Class BR, 7.36%, 07/24/2032			5.95
Palmer Square CLO Ltd., Series 2015-1A, Class A1A4, 6.77%, 05/21/2034			5.38
Elmwood CLO IX Ltd., Series 2021-2A, Class A, 6.81%, 07/20/2034			4.92
AGL CLO 14 Ltd., Series 2021-14A, Class A, 6.82%, 12/02/2034			4.49
Signal Peak CLO 1 Ltd., Series 2014-1A, Class AR3, 6.82%, 04/17/2034			4.49
Aimco CLO 14 Ltd., Series 2021-14A, Class A, 6.67%, 04/20/2034			4.48
Regatta XX Funding Ltd., Series 2021-2A, Class A, 6.82%, 10/15/2034			4.04
Madison Park Funding XXXVII Ltd., Series 2019-37A, Class AR, 6.73%, 07/15/2033			4.02
Buckhorn Park CLO Ltd., Series 2019-1A, Class AR, 6.78%, 07/18/2034			3.97
RR 1 LLC, Series 2017-1A, Class A1AB, 6.81%, 07/15/2035			3.93
Total			45.67

 

*	Excluding money market fund holdings.

Fund Inception: December 9, 2022

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, as supplemented to date, the Fund’s expense ratio of 0.26% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. Effective June 28, 2023, Invesco Capital Management LLC (the “Adviser”) has agreed to waive 100% of its management fee for the Fund through December 31, 2023. 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 index 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 index does 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 Index and Fund Performance History:

 

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

The Invesco Active U.S. Real Estate ETF (the “Fund”) is an actively managed exchange-traded fund (“ETF”) whose investment objective is to achieve high total return through growth of capital and current income. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in securities of companies that are principally engaged in the U.S. real estate industry and included within the FTSE NAREIT All Equity REITs Index (the “Benchmark Index”). The Fund considers a company to be principally engaged in the U.S. real estate industry if it: (i) derives 50% of its revenues or profits from the ownership, leasing, management, construction, financing or sale of U.S. real estate; or (ii) has at least 50% of the value of its assets invested in U.S. real estate. The Fund plans to invest principally in equity real estate investment trusts (“REITs”). Equity REITs pool investors’ funds for investments primarily in real estate properties or real estate-related loans (such as mortgages). The Fund also may invest in real estate operating companies (“REOCs”), as well as securities of other companies principally engaged in the U.S. real estate industry. REOCs are similar to REITs, except that REOCs reinvest their earnings into the business, rather than distributing them to unitholders like REITs.

The Fund structures and selects its investments primarily from a universe of securities that are included within the Benchamrk Index at the time of purchase. In constructing the portfolio, Invesco Advisers, Inc., the Fund’s sub-adviser (the “Sub Adviser”), analyzes quantitative and statistical metrics to identify attractively priced securities.

As part of the Fund’s investment process to implement its investment strategy in pursuit of its investment objective, the Sub-Adviser may also consider both qualitative and quantitative environmental, social and governance (“ESG”) factors it believes to be material to understanding an issuer’s fundamentals, assess whether any ESG factors pose a material financial risk or opportunity to the issuer and determine whether such risks are appropriately reflected in the issuer’s valuation. This analysis may involve the use of third-party research as well as proprietary research. Consideration of ESG factors is just one component of the Sub-Adviser’s assessment of issuers eligible for investment and not necessarily determinative to an investment decision. Therefore, the Sub- Adviser may still invest in securities of issuers that may be viewed as having a high ESG risk profile. The ESG factors considered by the Sub-Adviser may change over time, one or more factors may not be relevant with respect to all issuers eligible for investment and ESG considerations may not be applied to all issuers or investments in the Fund.

For the fiscal year ended October 31, 2023, on a market price basis, the Fund returned (9.55)%. On a net asset value (“NAV”) basis, the Fund returned (9.59)%. During the same time period, the Benchmark Index returned (7.89)%.

Relative to the Benchmark Index, the Fund was most overweight in the telecom tower REITs sub-industry and most underweight in the office REITs sub-industry during the fiscal year ended October 31, 2023. The majority of the Fund’s underperformance relative to the Benchmark Index during the period can be attributed to the Fund’s security selection in the industrial REITs and health care REITs sub-industries, respectively.

For the fiscal year ended October 31, 2023, the data center REITs sub-industry contributed most significantly to the Fund’s return, followed by the diversified real estate activities sub- industry. During the period, telecom tower REITs detracted most from the Fund’s return, followed by the self-storage REITs sub-industry.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2023, included Digital Realty Trust, Inc., a data center REITs company (portfolio average weight of 4.54%), and Equinix, Inc., a data center REITs company (portfolio average weight of 4.53%). Positions that detracted most significantly from the Fund’s return included Crown Castle Inc., a specialized REITs company (portfolio average weight of 5.22%), and Industrial Logistics Properties Trust, an industrial REITs company (no longer held at fiscal year-end).

 

Property Type and Sub-Industry Breakdown (% of the Fund’s  Net Assets) as of October 31, 2023
Infrastructure REITs			14.70
Industrial			14.19
Data Centers			10.58
Apartments			9.20
Health Care			8.54
Shopping Centers			7.95
Self Storage			7.07
Free Standing			5.56
Gaming REITs			4.07
Manufactured Homes			3.84
Office			3.38
Timber REITs			2.94
Lodging Resorts			2.60
Single Family Homes			2.33
Diversified			1.25
Specialty			0.95
Regional Malls			0.81
Money Market Funds Plus Other Assets Less Liabilities			0.04

Fund Inception: November 20, 2008

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 index 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 index does 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 Index and Fund Performance History:

 

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

The Invesco High Yield Bond Factor ETF (the “Fund”) is an actively managed exchange-traded fund (“ETF”) which seeks to provide total return. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in high-yield, below-investment grade, fixed-income securities (also referred to as “junk” bonds), and in derivatives and other instruments that have economic characteristics similar to such securities.

Invesco Advisers, Inc., the Fund’s sub-adviser, selects securities for the Fund’s portfolio by utilizing a factor-based strategy that involves systematically targeting securities exhibiting quantifiable issuer characteristics (or “factors”) that the Sub-Adviser believes will have higher returns than other fixed income securities with comparable characteristics over market cycles. Securities no longer exhibiting these factors will typically be sold. In practice, this means the Fund may have higher allocations to: value bonds (bonds that have high spreads relative to other securities of similar credit quality and/or sector); low volatility bonds (bonds that have lower levels of price volatility); and high carry bonds (bonds with higher absolute yield or spread). The portfolio managers expect to include additional factors or modify the factors used to build the Fund’s portfolio as they deem appropriate.

For the fiscal year ended October 31, 2023, on a market price basis, the Fund returned 6.50%. On a net asset value (“NAV”) basis, the Fund returned 6.47%. During the same time period, the Bloomberg U.S. Corporate High Yield 2% Issuer Cap Index (the “Benchmark Index”) returned 6.23%.

The Fund’s outperformance relative to the Benchmark Index during the fiscal year ended October 31, 2023, was driven largely by the Fund’s allocation to the utilities sector. Security selection in and allocation to the information technology and industrials sectors, as well as allocation to the consumer discretionary sector, contributed to the Fund’s return during the period. The communications services sector detracted from the Fund’s return during the period.

Positions that contributed most significantly to the Fund’s absolute return for the fiscal year ended October 31, 2023 included the EnfraGen Energia Sur, S.A., 5.38% coupon, due 12/30/2030 (portfolio average weight of 0.42%) and the Markit CDX North America High Yield Index Credit Default Swap Agreement (portfolio average weight of 0.03%). Positions that detracted most significantly from the Fund’s absolute return included CSC Holdings LLC, 4.63% coupon; due 12/01/2030 (portfolio average weight of 0.26%) and QVC, Inc., 4.75% coupon; due 02/15/2027 (portfolio average weight of 0.20%).

Security Type Breakdown (% of the Fund’s Net Assets) as of October 31, 2023
U.S. Dollar Denominated Bonds & Notes			97.63
U.S. Treasury Securities			0.24
Money Market Funds Plus Other Assets Less Liabilities			2.13
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of October 31, 2023
Security
TransDigm, Inc., 6.25%, 03/15/2026			1.35
Uber Technologies, Inc., 8.00%, 11/01/2026			0.73
AECOM, 5.13%, 03/15/2027			0.68
Neptune Bidco US, Inc., 9.29%, 04/15/2029			0.65
Nexstar Media, Inc., 5.63%, 07/15/2027			0.65
MPT Operating Partnership L.P./MPT Finance Corp., 5.00%, 10/15/2027			0.64
CCO Holdings LLC/CCO Holdings Capital Corp., 5.13%, 05/01/2027			0.63
Allied Universal Holdco LLC/Allied Universal Finance Corp., 6.63%, 07/15/2026			0.58
Delta Air Lines, Inc., 7.38%, 01/15/2026			0.58
Summit Midstream Holdings LLC/Summit Midstream Finance Corp., 9.00%, 10/15/2026			0.55
Total			7.04

 

*	Excluding money market fund holdings.

Fund Inception: December 2, 2020

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 0.39% 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 index 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 index does 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 index are based on the inception date of the Fund.

The Invesco High Yield Select ETF (the “Fund”) is an actively managed exchange-traded fund (“ETF”) which seeks to provide current income. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in relatively higher quality below investment grade fixed-income securities (commonly referred to as “high yield securities” or “junk bonds” with more speculative characteristics than investment grade securities), as well as in derivatives and other instruments that have economic characteristics similar to such securities. The Fund considers such higher quality securities as those rated between B- and BB+ (or the equivalent) by a nationally recognized statistical rating organization (“NRSRO”) or, if unrated, deemed to be of comparable quality by Invesco Advisers, Inc. (the “Sub-Adviser”). By comparison, investment grade securities are: (i) securities rated at least BBB- (or the equivalent) by a NRSRO, or (ii) unrated securities determined by the Sub-Adviser to be of comparable quality. If two or more NRSROs have assigned different ratings to a security, the Sub-Adviser uses the highest rating assigned. Up to 10% of the Fund’s net assets may be securities rated below B- (or the equivalent) in the event that a security selected by the Fund experiences a rating downgrade.

The Sub-Adviser selects securities for the Fund’s portfolio using a bottom-up evaluation process based on a fundamental analysis, a quantitative analysis, and a relative value assessment. The fundamental analysis considers the competitive landscape, risks to an issuer’s business model, as well as the overall competence of the management team. The quantitative analysis focuses on the quality of an issuer’s assets, its balance sheet, and the ability to generate free cash flow going forward. The relative value assessment compares pricing to comparable issuers and securities and assesses a security’s relative liquidity. The Sub-Adviser supplements its bottom-up fundamental analysis with an ongoing top-down analysis of sector and macro-economic trends, such as changes in interest rates.

The portfolio managers attempt to control the Fund’s risk by limiting its investment in any one security to 5% of the Fund’s net assets, and by diversifying the portfolio’s holdings over a number of different industries.

Decisions to purchase or sell securities are determined by the relative value considerations of the portfolio managers that factor in economic and credit-related fundamentals, market supply and demand, market dislocations and situation-specific opportunities. The purchase or sale of securities may be related to a decision to alter the Fund’s macro risk exposure (such as duration, yield curve positioning and sector exposure), a need to limit or reduce the Fund’s exposure to a particular security, issuer or industry, a change in an issuer’s credit quality, or general liquidity needs of the Fund. The credit research process utilized by the Sub-Adviser to implement the Fund’s investment strategy in pursuit of the

Fund’s investment objective considers factors that may include, but are not limited to, an issuer’s operations, capital structure and environmental, social and governance (“ESG”) considerations. Credit quality analysis for certain issuers therefore may consider whether any ESG factors pose a material financial risk or opportunity to an issuer. The Sub- Adviser may determine that ESG considerations are not material to certain issuers or types of investments held by the Fund. In addition, not all issuers or Fund investments may undergo a credit quality analysis that considers ESG factors, and not all investments held by the Fund will rate strongly on ESG criteria.

During the fiscal period from the Fund’s inception (December 9, 2022, the first day of trading on the exchange) through October 31, 2023, on a market price basis, the Fund returned 2.61%. On a net asset value (“NAV”) basis, the Fund returned 2.41%. During the same time period, the Bloomberg US Corporate High Yield Ba/B 2% Issuer Cap Total Return Index (the “Benchmark Index”) returned 2.73%.

The Fund’s underperformance relative to the Benchmark Index during the period was primarily driven by the Fund’s security selection in the consumer discretionary and consumer staples sectors, as well as exposure to the industrials sector.

Positions that contributed most significantly to the Fund’s return for the fiscal period ended October 31, 2023, included the Carnival Holdings Bermuda Ltd., 10.38% coupon, due 05/01/2028 (portfolio average weight of 1.65%), and Aethon United BR L.P./Aethon United Finance Corp., 8.25% coupon, due 02/15/2026 (portfolio average weight of 1.64%). Positions that detracted most significantly from the Fund’s return included Level 3 Financing, Inc., 3.75% coupon; due 07/15/2029 (portfolio average weight of 0.34%), and Bausch Health Cos., Inc., 4.88% coupon; due 06/01/2028 (portfolio average weight of 0.25%).

 

Security Type Breakdown (% of the Fund’s Net Assets) as of October 31, 2023
U.S. Dollar Denominated Bonds & Notes			88.80
Non-U.S. Dollar Denominated Bonds & Notes			5.63
Asset-Backed Securities			1.04
Preferred Stocks			0.50
Money Market Funds Plus Other Assets Less Liabilities			4.03

Fund Inception: December 9, 2022

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 0.48% 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:

 

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

The Invesco S&P 500^® Downside Hedged ETF (the “Fund”) is an actively managed exchange-traded fund (“ETF”) that seeks to achieve positive total returns in rising or falling markets that are not directly correlated to broad equity or fixed income market returns. The Fund seeks to achieve its investment objective by allocating its assets generally among the components of the S&P 500^® Dynamic VEQTOR Index (the “Benchmark Index”). The Benchmark Index is composed of up to three types of components: (i) an equity component, represented by the S&P 500^® Index; (ii) a volatility hedge component, represented by the S&P 500^® VIX Short-Term Futures Index (“VIX Futures Index”); and (iii) cash.

The Benchmark Index is designed to measure the performance of the broad equity markets with an implied volatility hedge. “Implied volatility” is a measure of the expected volatility of the S&P 500^® Index that is reflected in the value of the Chicago Board Options Exchange (“CBOE”) Volatility Index (“VIX Index”). Known as the “fear gauge” of the broader U.S. equities market, the VIX Index measures market volatility in large capitalization U.S. stocks and is calculated based on the prices of certain put and call options on the S&P 500^® Index.

The VIX Futures Index is designed to measure the returns from long positions in futures contracts on the VIX Index. The Benchmark Index’s allocation to the VIX Futures Index is designed to serve as a volatility hedge, as volatility historically tends to correlate negatively to the performance of the U.S. equity markets (i.e., rapid declines in the performance of U.S. equity markets generally are associated with high volatility in such markets).

Accordingly, pursuant to its methodology, the Benchmark Index allocates a greater portion of its weight to its equity component (the S&P 500^® Index) during periods of low volatility, and a greater portion of its weight to its volatility hedge component (the VIX Futures Index) during periods of increased volatility.

Under normal circumstances, the Fund will invest its portfolio in a combination of assets that are similar, but not necessarily identical, to that of the Benchmark Index. The Fund’s portfolio is composed of: (i) an equity sleeve, consisting of the component securities of the S&P 500^® Index, (ii) a volatility hedge sleeve, consisting of VIX Index-Related Instruments (defined below), which include futures contracts on the VIX Index, (iii) futures contracts that reference the S&P 500^® Index (“S&P 500 Futures”); and (iv) various liquid investments, including short-term U.S. Treasury Securities, money market instruments, cash and cash equivalents. With respect to its equity sleeve, the Fund utilizes a “passive” investment strategy that seeks to track the performance of the S&P 500^® Index as closely as possible. To do so, the Fund employs a “full replication” methodology; “full replication” means that the Fund generally invests the portion of its portfolio allocated to its equity sleeve in all of the component securities of the S&P 500^® Index in proportion to their weightings

in the S&P 500^® Index. Although the Fund employs a passive strategy with respect to its equity sleeve, Invesco Capital Management LLC (the “Adviser”), the Fund’s investment adviser, will actively manage the Fund’s investments in VIX Index-Related Instruments, S&P 500 Futures, short-term instruments and cash, as well as the Fund’s allocation of its assets among the equity and volatility hedge sleeves. Such allocations may not correspond to the Benchmark Index’s allocations.

Instead, the Adviser will seek to obtain returns for the Fund that exceed the Benchmark Index by providing the Fund with equity or volatility hedge sleeve allocations that are higher or lower than those of the Benchmark Index at any time given the market conditions at that time.

In addition to its investments in futures contracts on the VIX Index, the Fund may invest in U.S.-listed exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”) that provide exposure to the VIX Index (such ETFs and ETNs, along with futures contracts on the VIX Index, are collectively the “VIX Index-Related Instruments”). The Fund may invest in the short- term instruments and cash to provide liquidity or to protect the Fund during periods of heightened volatility when the Adviser believes that it is in the best interest of the Fund to do so.

For the fiscal year ended October 31, 2023, on a market price basis, the Fund returned (9.19)%. On a net asset value (“NAV”) basis, the Fund returned (9.09)%. During the same time period, the Benchmark Index returned (8.45)%. The Fund’s underperformance on a NAV basis, relative to the Benchmark Index, was primarily due to fees and transaction costs incurred by the Fund during the fiscal year.

During this same time period, the S&P 500^® Index returned 10.14% and the U.S. 3-Month Treasury Bill Index (the “T-Bill 3-Month Index”) returned 4.88% (these indexes, collectively with the Benchmark Index, are referred to as the “Indexes”). The Indexes were selected for their recognition in the marketplace.

The S&P 500^® Index was selected because its performance comparison is a useful measure for investors as a broad representation of the equity market. The T-Bill 3-Month Index was selected because its performance comparison is a useful measure for investors as a broad representation of the short-term U.S. fixed income market.

The Fund’s performance, on a NAV basis, differed from the return of the S&P 500^® Index during the period primarily because of the Fund’s consistent allocation to VIX futures, which generally have an inverse correlation to the S&P 500^® Index. The Fund’s performance, on a NAV basis, differed from the return of the T-Bill 3-Month Index during the period primarily because of the Fund’s consistent allocation to VIX Futures, which underperformed the short-term U.S. fixed income market during the fiscal year.

For the fiscal year ended October 31, 2023, the information technology sector contributed most significantly to the Fund’s

return, followed by the communication services sector. The Fund’s VIX futures allocations and exposure to the financials sector were the largest detractors from the Fund’s return.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2023, included Nvidia Corp. (portfolio average weight of 1.64%) and Microsoft Corp. (portfolio average weight of 4.62%). The positions that detracted most significantly from the Fund’s return were the CBOE VIX (CBF) Jun 23, a VIX futures contract (portfolio average weight of 0.71%), and CBOE VIX (CBF) Jul 23, a VIX futures contract (portfolio average weight of 0.52%).

 

Sector Breakdown (% of the Fund’s Net Assets) as of October 31, 2023
Information Technology			23.95
Health Care			11.22
Financials			10.89
Consumer Discretionary			9.01
Communication Services			7.44
Industrials			7.11
Consumer Staples			5.66
Energy			3.87
Sector Types Each Less Than 3%			6.22
Money Market Funds Plus Other Assets Less Liabilities			14.63

Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of October 31, 2023
Security
Microsoft Corp.			6.10
Apple, Inc.			6.10
Amazon.com, Inc.			2.94
NVIDIA Corp.			2.45
Alphabet, Inc., Class A			1.79
Meta Platforms, Inc., Class A			1.63
Alphabet, Inc., Class C			1.54
Berkshire Hathaway, Inc., Class B			1.51
Tesla, Inc.			1.35
UnitedHealth Group, Inc.			1.21
Total			26.62

 

*	Excluding money market fund holdings.

Fund Inception: December 6, 2012

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. The adviser has contractually agreed to waive fees and/or pay certain Fund expenses through August 31, 2025. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.44% (0.39% after fee waiver) includes the unitary management fee of 0.39% and acquired fund fees and expenses of 0.05%. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund Shares. See invesco.com/ETFs to find the most recent month-end performance numbers.

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

Notes Regarding Indexes and Fund Performance History:

 

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

The Invesco Short Duration Bond ETF (the “Fund”) is an actively managed exchange-traded fund (“ETF”) whose investment objective is to seek total return, comprised of income and capital appreciation. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in fixed-income securities, and in derivatives and other instruments that have economic characteristics similar to such securities.

The fixed-income investments in which the Fund may invest include corporate bonds, government bonds, including U.S. Treasury and agency securities, and mortgage-backed and asset- backed securities, including collateralized mortgage obligations (“CMOs”), collateralized loan obligations (“CLOs”) and collateralized debt obligations (“CDOs”). The Fund will attempt to maintain a dollar-weighted average portfolio maturity and duration between one and three years.

During the fiscal period from the Fund’s inception (December 9, 2022, the first day of trading on the exchange) through October 31, 2023, on a market price basis, the Fund returned 2.39%. On a net asset value (“NAV”) basis, the Fund returned 2.47%. During the same time period, the Bloomberg US Government and Credit 1-3 Year Index (the “Benchmark Index”) returned 2.27%.

The Fund’s outformance relative to the Benchmark Index during the period was driven largely by the Fund’s allocation to the financials sector, as well as the Fund’s allocation to the energy and information technology sectors, respectively.

Positions that contributed most significantly to the Fund’s absolute return for the fiscal period ended October 31, 2023, included the Sasol Financing USA LLC, 5.88% coupon, due 03/27/2024 (portfolio average weight of 2.03%), and NatWest Group PLC, 7.47% coupon, due 11/10/2026 (portfolio average weight of 2.15%). Positions that detracted most significantly from the Fund’s absolute return included Ford Motor Credit Co. LLC, 8.28% coupon; due 03/06/2026 (portfolio average weight of 2.07%), and OPEC Fund for International Development, 4.50% coupon; due 01/26/2026 (no longer held at fiscal year-end).

Security Type Breakdown (% of the Fund’s Net Assets) as of October 31, 2023
U.S. Dollar Denominated Bonds & Notes			88.82
Asset-Backed Securities			6.94
U.S. Treasury Securities			2.14
Preferred Stocks			0.80
Agency Credit Risk Transfer Notes			0.74
Money Market Funds Plus Other Assets Less Liabilities			0.56
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of October 31, 2023
Security
Morgan Stanley Bank N.A., 5.88%, 10/30/2026			2.56
NatWest Group PLC, 7.47%, 11/10/2026			2.08
Barclays PLC, 7.33%, 11/02/2026			2.07
Ford Motor Credit Co. LLC, 8.30%, 03/06/2026			2.07
UBS AG, 5.80%, 09/11/2025			2.04
Sasol Financing USA LLC, 5.88%, 03/27/2024			2.03
Serbia International Bond, 6.25%, 05/26/2028			2.00
Energy Transfer L.P., 4.50%, 04/15/2024			1.96
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 6.50%, 07/15/2025			1.53
Mercedes-Benz Finance North America LLC, 5.38%, 08/01/2025			1.53
Total			19.87

 

*	Excluding money market fund holdings.

Fund Inception: December 9, 2022

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, as supplemented to date, 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 index 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 index does 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 Index and Fund Performance History:

 

-	Cumulative Inception returns for the Fund and index are based on the inception date of the Fund.

The Invesco Total Return Bond ETF (the “Fund”) is an actively managed exchange-traded fund (“ETF”) whose investment objective is to seek maximum total return, comprised of income and capital appreciation. The Fund will normally invest in a portfolio of fixed income instruments of varying maturities and of any credit quality. The Fund will normally invest at least 80% of its net assets (plus any borrowings for investment purposes) in fixed income instruments, which may be represented by certain derivative instruments as discussed below, and also may include ETFs and closed-end funds (“CEFs”) that invest substantially all of their assets in fixed income instruments (including ETFs and CEFs affiliated with the Fund). The fixed income instruments in which the Fund will invest include corporate debt securities of U.S. and non-U.S. issuers, including corporate bonds, and other similar instruments, such as Treasury securities, collateralized loan obligations (“CLOs”), mortgage-backed securities (“MBS”) and asset-backed securities (“ABS”), issued by various U.S. and non-U.S. public- or private-sector entities, and municipal securities, which are debt securities issued by states or local governments and their agencies, authorities and other government sponsored enterprises.

For the fiscal year ended October 31, 2023, on a market price basis, the Fund returned 1.90%. On a net asset value (“NAV”) basis, the Fund returned 1.69%. During this same time period, the Bloomberg U.S. Aggregate Bond Index (the “Benchmark Index”) returned 0.36%.

The Fund’s outperformance relative to the Benchmark Index during the period was primarily due to the Fund’s allocation to the utilities sector and security selection in the communication services sector.

For the fiscal year ended October 31, 2023, from an industry perspective, exposure to electric utilities was the largest contributor to the Fund’s return, followed by oil, gas & consumable fuels. No industries detracted from the Fund’s performance during the period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2023, included BX Trust, 6.30% coupon; due 10/15/2036 (portfolio average weight of 0.94%), and BX Commercial Mortgage Trust, 7.10% coupon; due 09/15/2036 (portfolio average weight of 0.81%). Positions that detracted most significantly from the Fund’s return included U.S. Treasury Bonds, 3.63% coupon; due 05/15/2053 (portfolio average weight of 5.35%), and U.S. Treasury Notes, 3.88% coupon; due 8/15/2033 (portfolio average weight of 4.41%).

Asset Group (% of the Fund’s Net Assets) as of October 31, 2023
U.S. Dollar Denominated Bonds & Notes			51.75
U.S. Government Sponsored Agency Mortgage-Backed Securities			20.82
Asset-Backed Securities			16.95
U.S. Treasury Securities			15.69
Agency Credit Risk Transfer Notes			0.66
Preferred Stocks			0.46
U.S. Government Sponsored Agency Securities			0.24
Municipal Obligations			0.19
Exchange-Traded Funds			0.05
Non-U.S. Dollar Denominated Bonds & Notes			0.05
Common Stocks & Other Equity Interests			0.00
Options Purchased			0.04
Money Market Funds Plus Other Assets Less Liabilities			(6.90)
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of October 31, 2023
Security
U.S. Treasury Bonds, 3.63%, 05/15/2053			5.04
U.S. Treasury Notes, 4.88%, 10/31/2028			5.03
U.S. Treasury Notes, 3.88%, 08/15/2033			4.20
Uniform Mortgage-Backed Securities, TBA, 5.00%, 11/01/2053			3.86
Uniform Mortgage-Backed Securities, TBA, 5.50%, 11/01/2053			2.80
Government National Mortgage Association, TBA, 4.50%, 11/01/2053			1.84
Uniform Mortgage-Backed Securities, TBA, 3.50%, 11/01/2053			1.80
Government National Mortgage Association, TBA, 5.50%, 11/01/2053			1.52
Uniform Mortgage-Backed Securities, TBA, 2.50%, 11/01/2053			1.31
BX Trust, Series 2021-LGCY, Class B, 6.30%, 10/15/2036			0.95
Total			28.35

 

*	Excluding money market fund holdings.

Guggenheim Total Return Bond ETF (the “Predecessor Fund”) Inception: February 10, 2016

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, as supplemented to date, the Fund’s net expense ratio of 0.25% is expressed as a unitary management fee of 0.50%, to cover operating expenses and expenses incurred in connection with managing the portfolio, and a waiver of 0.25%. Effective June 28, 2023, Invesco Capital Management LLC (the “Adviser”) has agreed to waive a portion of its unitary management fee for the Fund through August 31, 2025 such that after giving effect to such waiver, the net unitary management fee will be 0.25%. 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 index 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 index does 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 Index and Fund Performance History:

 

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

 

-	Effective after the close of business on April 6, 2018, the Predecessor Fund was reorganized into the Fund. Fund returns shown are blended returns of the Predecessor Fund and the Fund.

The Invesco Ultra Short Duration ETF (the “Fund”) is an actively managed exchange-traded fund (“ETF”) whose investment objective is to seek maximum current income, consistent with preservation of capital and daily liquidity. The Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in fixed income securities and in ETFs and closed-end funds that invest substantially all of their assets in fixed income securities. The Fund uses a low duration strategy to seek to outperform the ICE BofA US Treasury Bill Index (the “Benchmark Index”) in addition to providing returns in excess of those available in U.S. Treasury bills, government repurchase agreements, and money market funds, while seeking to provide preservation of capital and daily liquidity.

The Fund expects, under normal circumstances, to hold a diversified portfolio of fixed income instruments of varying maturities, but that have an average duration of less than one year.

The Fund is primarily invested in corporate bonds, commercial paper and asset-backed securities. The Fund’s high allocation to floating rate securities reduces interest rate risk while commercial paper helps the Fund manage its liquidity needs. The Fund’s focus on high-quality short maturity holdings helps the Fund manage credit risk. The Fund continues to maintain an average effective duration below one year. The portfolio management team believes the Fund is well positioned for interest rate volatility and broader financial market sell-offs overall and relative to other conservative ultra-short fixed income funds. The Fund’s significant holdings in high quality investment grade assets and money market securities continue to help reduce drawdown risks, while preserving capital and maintaining a competitive yield.

For the fiscal year ended October 31, 2023, on a market price basis, the Fund returned 5.42%. On a net asset value (“NAV”) basis, the Fund returned 5.40%. During the same time period, the Benchmark Index returned 4.83%.

The Fund’s outperformance relative to the Benchmark Index during the year was primarily due to the Fund maintaining an overweight position in short maturity investment grade credit securities.

Allocation to banks and insurance industries were positive contributors to the Fund’s performance relative to the Benchmark Index during the fiscal year ended October 31, 2023. Additionally, the Fund’s performance during the period was positively impacted by its overweight allocation to the capital markets, automobiles, and oil, gas & consumable fuels industries. No industries detracted from the Fund’s performance during the period.

Positions that contributed most significantly to the Fund’s return during the fiscal year ended October 31, 2023, included Golub Capital Partners CLO, 7.10% coupon (portfolio average weight of 0.57%), and Golub Capital Partners CLO, 7.33 % coupon,

(portfolio average weight of 0.52%). Positions that detracted most significantly from the Fund’s return included Capital One Financial Corp., 6.02% coupon (portfolio average weight of 0.37%), and OBX Trust, 1.10% coupon (portfolio average weight of 0.35%).

 

Security Type Breakdown (% of the Fund’s Net Assets) as of October 31, 2023
U.S. Dollar Denominated Bonds & Notes			48.55
Commercial Paper			28.79
Asset-Backed Securities			17.66
Non-U.S. Dollar Denominated Bonds & Notes			2.50
Certificates of Deposit			1.27
Variable Rate Senior Loan Interests			0.07
Exchange-Traded Funds			0.05
Money Market Funds Plus Other Assets Less Liabilities			1.11
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of October 31, 2023
Security
Japan Treasury Discount Bill, Series 1185, 0.00%, 01/09/2024			2.50
Harley-Davidson Financial Services, Inc., 0.00%, 11/06/2023			1.28
Mercedes-Benz Finance North America LLC, 6.29%, 03/30/2025			1.07
Conagra Brands, Inc., 0.00%, 11/08/2023			1.06
Canadian Natural Resources Ltd., 3.80%, 04/15/2024			1.01
Global Payments, Inc., 0.00%, 11/20/2023			0.92
Cigna Group (The), 5.69%, 03/15/2026			0.92
Jackson National Life Global Funding, 5.50%, 01/09/2026			0.86
Swedbank AB, 6.73%, 06/15/2026			0.80
Bank of Nova Scotia (The), 6.44%, 06/12/2025			0.80
Total			11.22

 

*	Excluding money market fund holdings.

Guggenheim Ultra Short Duration ETF (the “Predecessor Fund”) Inception: February 12, 2008

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 total annual operating expense ratio was indicated as 0.22%. 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 index 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 index does 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 Index and Fund Performance History:

 

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

 

-	Effective after the close of business on April 6, 2018, the Predecessor Fund was reorganized into the Fund. Fund returns shown are blended returns of the Predecessor Fund and the Fund.

The Invesco Variable Rate Investment Grade ETF (the “Fund”) is an actively managed exchange-traded fund (“ETF”) whose investment objectives are seeking to generate current income while maintaining low portfolio duration as a primary objective and capital appreciation as a secondary objective. The Fund seeks to achieve its investment objectives by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of investment-grade, variable rate or floating rate debt securities that are denominated in U.S. dollars and are issued by U.S. private sector entities or U.S. government agencies and instrumentalities.

Invesco Advisers, Inc., the sub-adviser to the Fund, selects the following types of securities for the Fund: (i) floating rate non- agency commercial mortgage-backed securities (“MBS”); variable rate non-agency residential MBS; variable rate agency MBS and floating rate non-agency asset-backed securities (“ABS”) (including floating rate non-agency commercial real estate collateralized loan obligations (“CLOs”)); (ii) floating rate corporate debt securities (comprised of corporate notes, bonds, debentures or privately issued securities offered pursuant to Rule 144A (“Rule 144A”) of the Securities Act of 1933, as amended (“Securities Act”)); (iii) floating rate government sponsored enterprise (“GSE”) credit risk transfers; (iv) floating rate U.S. Government securities (including floating rate agency debt securities); (v) variable rate preferred stock; and (vi) affiliated ETFs that invest primarily in any or all of the foregoing securities (collectively, “Variable Rate Instruments”), to the extent permitted by the Investment Company Act of 1940.

During the fiscal year ended October 31, 2023, on a market price basis, the Fund returned 7.46%. On a net asset value (“NAV”) basis, the Fund returned 7.32%. During the same time period, the Bloomberg US Floating Rate Note Index (the “Benchmark Index”) returned 6.58%.

The Fund’s outperformance relative to the Benchmark Index during the fiscal year ended October 31, 2023, was driven largely by its security selection in the consumer staples sector, as well as overweight allocation within the health care sector.

The Fund’s allocation to the consumer discretionary sector was also a contributor for the period. No sectors detracted from the Fund’s relative performance for the period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended October 31, 2023, included U.S. Treasury Floating Rate Note, 5.52% coupon, due 07/31/2025 (portfolio average weight of 23.91%), and Freddie Mac, 8.22% coupon, due 04/25/2042 (portfolio average weight of 0.63%). Positions that detracted most significantly from the Fund’s return were BBCMS Mortgage Trust, 6.76% coupon, due 11/15/2034 (portfolio average weight of 0.26%) and COMM Mortgage Trust, 6.68% coupon, due 06/15/2034 (portfolio average weight of 0.39%).

Security Type Breakdown (% of the Fund’s Net Assets) as of October 31, 2023
U.S. Dollar Denominated Bonds & Notes			38.77
U.S. Treasury Securities			24.03
Agency Credit Risk Transfer Notes			16.99
Asset-Backed Securities			16.41
U.S. Government Sponsored Agency Mortgage-Backed Securities			2.63
Certificate of Deposit			0.52
Money Market Funds Plus Other Assets Less Liabilities			0.65
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of October 31, 2023
Security
U.S. Treasury Floating Rate Notes, 5.52%, 07/31/2025			24.03
GA Global Funding Trust, 6.72%, 04/11/2025			0.75
Charles Schwab Corp. (The), 5.85%, 03/18/2024			0.75
CenterPoint Energy, Inc., 5.99%, 05/13/2024			0.74
Freddie Mac, Series 2021-DNA6, Class M2, STACR®, 6.82%, 10/25/2041			0.72
BPCE S.A., 7.34%, 10/19/2027			0.65
Athene Global Funding, 6.05%, 05/24/2024			0.65
Fannie Mae Connecticut Avenue Securities, Series 2023-R01, Class 1M1, 7.72%, 12/25/2042			0.64
Freddie Mac, Series 2022-DNA3, Class M1B, STACR®, 8.22%, 04/25/2042			0.63
NextEra Energy Capital Holdings, Inc., 6.38%, 03/21/2024			0.63
Total			30.19

 

*	Excluding money market fund holdings.

Fund Inception: September 22, 2016

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 0.30% 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 Benchmark 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 Benchmark Index does 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 Index and Fund Performance History:

 

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

		Principal   Amount				Value
Asset-Backed Securities-98.59%
ABPCI Direct Lending Fund IX LLC (Cayman Islands), Series 2020-9A, Class A1R, 7.05% (3 mo. Term SOFR + 1.66%), 11/18/2031(a)(b)		$	500,000			$	494,572
AGL CLO 14 Ltd. (Cayman Islands), Series 2021-14A, Class A, 6.82% (3 mo. Term SOFR + 1.41%), 12/02/2034(a)(b)			1,500,000				1,488,654
Aimco CLO 14 Ltd. (Cayman Islands), Series 2021-14A, Class A, 6.67% (3 mo. Term SOFR + 1.25%), 04/20/2034(a)(b)			1,500,000				1,482,936
Benefit Street Partners CLO XI (Cayman Islands), Series 2017-11A, Class A2R, 7.16% (3 mo. Term SOFR + 1.76%), 04/15/2029(a)(b)			1,000,000				990,299
Buckhorn Park CLO Ltd. (Cayman Islands), Series 2019-1A, Class AR, 6.78% (3 mo. Term SOFR + 1.38%), 07/18/2034(a)(b)			1,325,000				1,316,096
Carlyle Global Market Strategies CLO Ltd. (Cayman Islands)
Series 2013-1A, Class A1RR, 6.58% (3 mo. Term SOFR + 1.21%), 08/14/2030(a)(b)			613,977				611,288
Series 2014-2RA, Class A2, 6.95% (3 mo. Term SOFR + 1.59%), 05/15/2031(a)(b)			1,000,000				983,029
CBAM Ltd. (Cayman Islands), Series 2017-1A, Class A1, 6.93% (3 mo. Term SOFR + 1.51%), 07/20/2030(a)(b)			226,495				225,972
Cedar Funding IV CLO Ltd. (Cayman Islands), Series 2014-4A, Class ARR, 6.83% (3 mo. Term SOFR + 1.42%), 07/23/2034(a)(b)			1,000,000				990,387
Cedar Funding XI CLO Ltd. (Cayman Islands), Series 2019-11A, Class A1R, 6.72% (3 mo. Term SOFR + 1.31%), 05/29/2032(a)(b)			1,000,000				994,865
CIFC Funding 2013-II Ltd. (Cayman Islands), Series 2013-2A, Class A2L2, 7.16% (3 mo. Term SOFR + 1.76%), 10/18/2030(a)(b)			500,000				494,187
Elmwood CLO IX Ltd. (Cayman Islands), Series 2021-2A, Class A, 6.81% (3 mo. Term SOFR + 1.39%), 07/20/2034(a)(b)			1,640,000				1,631,182
GoldenTree Loan Management US CLO 1 Ltd. (Cayman Islands), Series 2017-1A, Class A1R2, 6.70% (3 mo. Term SOFR + 1.28%), 04/20/2034(a)(b)			900,000				890,457
Golub Capital Partners CLO 25(M) Ltd. (Cayman Islands), Series 2015-25A, Class AR, 7.01% (3 mo. Term SOFR + 1.64%), 05/05/2030(a)(b)			1,113,975				1,111,473
Golub Capital Partners CLO 40(B) Ltd. (Cayman Islands), Series 2019-40A, Class AR, 6.73% (3 mo. Term SOFR + 1.35%), 01/25/2032(a)(b)			345,000				340,702
Golub Capital Partners CLO 45(M) Ltd. (Cayman Islands), Series 2019-45A, Class A, 7.40% (3 mo. Term SOFR + 1.98%), 10/20/2031(a)(b)			1,250,000				1,244,070
Golub Capital Partners CLO 47(M) Ltd. (Cayman Islands), Series 2020-47A, Class A1, 7.33% (3 mo. Term SOFR + 1.94%), 05/05/2032(a)(b)			1,150,000				1,144,172

		Principal   Amount				Value
Madison Park Funding XXVI Ltd. (Cayman Islands), Series 2017-26A, Class BR, 7.25% (3 mo. Term SOFR + 1.86%), 07/29/2030(a)(b)		$	550,000			$	544,942
Madison Park Funding XXXVII Ltd. (Cayman Islands), Series 2019-37A, Class AR, 6.73% (3 mo. Term SOFR + 1.33%), 07/15/2033(a)(b)			1,340,000				1,331,821
Mariner CLO LLC (Cayman Islands), Series 2016-3A, Class BR2, 7.17% (3 mo. Term SOFR + 1.76%), 07/23/2029(a)(b)			1,000,000				994,813
Neuberger Berman CLO XV (Cayman Islands), Series 2013-15A, Class A1R2, 6.58% (3 mo. Term SOFR + 1.18%), 10/15/2029(a)(b)			900,520				896,189
Owl Rock CLO IV Ltd. (Cayman Islands), Series 2020-4A, Class A1R, 7.24% (3 mo. Term SOFR + 1.86%), 08/20/2033(a)(b)			750,000				738,653
Palmer Square CLO Ltd. (Cayman Islands), Series 2015-1A, Class A1A4, 6.77% (3 mo. Term SOFR + 1.39%), 05/21/2034(a)(b)			1,795,000				1,782,241
Rad CLO 5 Ltd. (Cayman Islands), Series 2019- 5A, Class BR, 7.36% (3 mo. Term SOFR + 1.96%), 07/24/2032(a)(b)			2,000,000				1,969,694
Regatta XX Funding Ltd. (Cayman Islands), Series 2021-2A, Class A, 6.82% (3 mo. Term SOFR + 1.42%), 10/15/2034(a)(b)			1,345,000				1,337,814
Regatta XXII Funding Ltd. (Cayman Islands), Series 2022-2A, Class A, 6.96% (3 mo. Term SOFR + 1.54%), 07/20/2035(a)(b)			1,000,000				995,504
RR 1 LLC, Series 2017-1A, Class A1AB, 6.81% (3 mo. Term SOFR + 1.41%), 07/15/2035(a)(b)			1,310,000				1,301,942
Signal Peak CLO 1 Ltd., Series 2014-1A, Class AR3, 6.82% (3 mo. Term SOFR + 1.42%), 04/17/2034(a)(b)			1,500,000				1,486,066
Sixth Street CLO XIX Ltd. (Cayman Islands), Series 2021-19A, Class A, 6.78% (3 mo. Term SOFR + 1.36%), 07/20/2034(a)(b)			1,000,000				991,105
Symphony CLO XIX Ltd. (Cayman Islands), Series 2018-19A, Class B, 7.01% (3 mo. Term SOFR + 1.61%), 04/16/2031(a)(b)			900,000				877,387
Symphony CLO XVI Ltd. (Cayman Islands), Series 2015-16A, Class AR, 6.81% (3 mo. Term SOFR + 1.41%), 10/15/2031(a)(b)			500,000				497,591
Symphony CLO XXXII Ltd. (Cayman Islands), Series 2022-32A, Class B, 7.26% (3 mo. Term SOFR + 1.85%), 04/23/2035(a)(b)			500,000				485,300
Total Asset-Backed Securities (Cost $32,293,143)							32,665,403

		Shares				Value
Money Market Funds-0.90%
Invesco Government & Agency Portfolio, Institutional Class, 5.27%(c)(d) (Cost $296,033)			296,033			$	296,033
TOTAL INVESTMENTS IN SECURITIES-99.49% (Cost $32,589,176)							32,961,436
OTHER ASSETS LESS LIABILITIES-0.51%							170,597
NET ASSETS-100.00%						$	33,132,033

		Shares				Value
Common Stocks & Other Equity Interests-99.96%(a)
Apartments -9.20%
Apartment Income REIT Corp.			33,945			$	991,533
AvalonBay Communities, Inc.(b)			5,947				985,656
Camden Property Trust(b)			10,879				923,409
Elme Communities(b)			74,269				947,672
Equity Residential			17,430				964,402
Essex Property Trust, Inc.(b)			4,765				1,019,329
Mid-America Apartment Communities, Inc.			7,979				942,719
UDR, Inc.			28,854				917,846
							7,692,566
Data Centers -10.58%
Digital Realty Trust, Inc.			35,851				4,458,431
Equinix, Inc.			6,002				4,379,299
							8,837,730
Diversified -1.25%
American Assets Trust, Inc.			28,862				512,301
W.P. Carey, Inc.(b)			9,865				529,257
							1,041,558
Free Standing -5.56%
Agree Realty Corp.			12,219				683,531
Essential Properties Realty Trust, Inc.(b)			30,954				679,440
Four Corners Property Trust, Inc.			30,231				643,920
NETSTREIT Corp.(b)			44,446				633,355
NNN REIT, Inc.			18,678				678,572
Realty Income Corp.			13,102				620,773
Spirit Realty Capital, Inc.			19,604				705,548
							4,645,139
Gaming REITs-4.07%
Gaming and Leisure Properties, Inc.			37,809				1,716,150
VICI Properties, Inc.			60,434				1,686,109
							3,402,259
Health Care-8.54%
CareTrust REIT, Inc.(b)			49,349				1,061,990
Healthcare Realty Trust, Inc.(b)			71,922				1,032,081
Healthpeak Properties, Inc.			60,154				935,395
Omega Healthcare Investors, Inc.			31,122				1,030,138
Physicians Realty Trust(b)			91,037				988,662
Ventas, Inc.(b)			24,671				1,047,530
Welltower, Inc.(b)			12,413				1,037,851
							7,133,647
Industrial-14.19%
Americold Realty Trust, Inc.(b)			65,329				1,712,926
EastGroup Properties, Inc.(b)			10,831				1,768,161
First Industrial Realty Trust, Inc.			39,757				1,681,721
Prologis, Inc.			16,361				1,648,371
Rexford Industrial Realty, Inc.			36,882				1,594,778
STAG Industrial, Inc.			52,150				1,732,423
Terreno Realty Corp.(b)			32,282				1,719,985
							11,858,365
Infrastructure REITs-14.70%
American Tower Corp.			24,025				4,281,015