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

Strictly in accordance with its guidelines and mandated procedures, Dorsey, Wright & Associates, LLC (“Dorsey Wright” or the “Index Provider”) selects securities of small capitalization companies trading on U.S. exchanges for inclusion in the Index pursuant to a proprietary methodology that is designed to identify securities that demonstrate powerful relative strength (or momentum) characteristics. “Relative strength” is an investing technique that compares the performance of a particular asset to the overall performance of the market. The Index Provider assigns a relative strength score to each eligible security by comparing the rate of increase of the security’s price over a set period as compared to that of a benchmark index. The Index Provider selects securities for inclusion in the Index from an eligible universe of the constituents ranked between 1,001 and 3,000 by market capitalization within the NASDAQ US Benchmark Index. The Index Provider assigns a relative strength score to each eligible security and selects approximately 200 securities with the greatest scores for inclusion in the Index. Component security weights are based on relative scores, with securities with higher scores receiving larger weights in the Index. The Fund generally invests in all of the securities comprising the Index in proportion to their weightings in the Index.

For the fiscal year ended August 31, 2022, on a market price basis, the Fund returned (12.15)%. On a net asset value (“NAV”) basis, the Fund returned (12.25)%. During the same time period, the Index returned (11.66)%. 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.

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

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included LSB Industries, Inc., a materials company (no longer held at fiscal year-end), and SM Energy Co., an energy company (portfolio average weight of 1.84%). Positions that detracted most significantly from the Fund’s return included Hovnanian Enterprises, Inc., Class A, a consumer discretionary company (no longer held at fiscal year-end), and Aspen Aerogels Inc, an energy company (no longer held at fiscal year-end).

Sector Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Energy			25.57
Industrials			18.41
Financials			13.12
Health Care			12.51
Consumer Discretionary			10.91
Information Technology			6.34
Materials			4.71
Consumer Staples			3.54
Sector Types Each Less Than 3%			4.80
Money Market Funds Plus Other Assets Less Liabilities			0.09
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
CONSOL Energy, Inc.			1.84
SM Energy Co.			1.66
Alpha Metallurgical Resources, Inc.			1.60
Weatherford International PLC			1.49
Permian Resources Corp., Class A			1.34
Veritiv Corp.			1.31
Clearfield, Inc.			1.26
Kinsale Capital Group, Inc.			1.19
SilverBow Resources, Inc.			1.19
Dillard’s, Inc., Class A			1.17
Total			14.05

 

*	Excluding money market fund holdings.

Fund Inception: July 19, 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. According to the Fund’s current prospectus, the Fund’s expense ratio of 0.60% is expressed as a unitary management fee to cover operating expenses and expenses incurred in connection with managing the portfolio. NAV and Market Price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and Market Price, respectively. The returns shown in the table above do not reflect the deduction of taxes that a shareholder would pay on Fund

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

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

Notes Regarding Indexes and Fund Performance History:

 

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

As an index fund, the Invesco S&P SmallCap Consumer Discretionary ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S&P SmallCap 600^® Capped Consumer Discretionary Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is designed to measure the performance of securities of small-capitalization U.S. companies in the consumer discretionary sector, as defined by the Global Industry Classification Standard (“GICS^®”). These companies are principally engaged in the business of providing consumer goods and services that are cyclical in nature, including, but not limited to, household durables, leisure products and services, apparel and luxury goods, computers and electronics, automobiles and auto components, and hotel and restaurant services. The Index selects constituents from the S&P SmallCap 600^® Index (the “Benchmark Index”), which reflects the small-capitalization segment of the U.S. equity market. 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 (27.91)%. On a net asset value (“NAV”) basis, the Fund returned (28.01)%. During the same time period, the Index returned (27.84)%. 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 proceeds from the securities lending program in which the Fund participates.

During this same time period, the Benchmark Index returned (12.12)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 600 small-cap securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. small-cap stock market.

Relative to the Benchmark Index, the Fund was most overweight in the specialty retail industry and most underweight in the banks 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 overweight allocation to the household durables, specialty retail and hotels, restaurants and leisure industries.

For the fiscal year ended August 31, 2022, no industry contributed to the Fund’s return. The specialty retail industry detracted most significantly from the Fund’s return during the

period, followed by the household durables and hotels, restaurants & leisure industries, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Academy Sports & Outdoors, Inc., a specialty retail company (portfolio average weight of 1.39%) and National Vision Holdings, Inc., a specialty retail company (portfolio average weight of 0.47%). Positions that detracted most significantly from the Fund’s return included Sonos, Inc., a household durables company (portfolio average weight of 1.04%), and Rent-A-Center, Inc., a specialty retail company (portfolio average weight of 1.76%).

 

Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Specialty Retail			34.85
Household Durables			19.91
Hotels, Restaurants & Leisure			13.95
Auto Components			10.73
Textiles, Apparel & Luxury Goods			8.00
Diversified Consumer Services			7.20
Industry Types Each Less Than 3%			5.26
Money Market Funds Plus Other Assets Less Liabilities			0.10
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
Asbury Automotive Group, Inc.			3.46
Academy Sports & Outdoors, Inc.			3.30
Signet Jewelers Ltd.			2.78
Group 1 Automotive, Inc.			2.66
LCI Industries			2.64
Meritage Homes Corp.			2.58
National Vision Holdings, Inc.			2.43
Dorman Products, Inc.			2.30
Steven Madden Ltd.			1.96
Installed Building Products, Inc.			1.88
Total			25.99

 

*	Excluding money market fund holdings.

Fund Inception: April 7, 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 0.29% 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 S&P SmallCap Consumer Staples ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S&P SmallCap 600^® Capped Consumer Staples Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is designed to measure the performance of securities of small-capitalization U.S. companies in the consumer staples sector, as defined by the Global Industry Classification Standard (“GICS^®”). These companies are principally engaged in the business of providing consumer goods and services that have non-cyclical characteristics, including, but not limited to, tobacco, food and beverage, and non-discretionary retail, such as non-durable household goods and personal products. The Index selects constituents from the S&P SmallCap 600^® Index (the “Benchmark Index”), which reflects the small-capitalization segment of the U.S. equity market. 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 1.62%. On a net asset value (“NAV”) basis, the Fund returned 1.48%. During the same time period, the Index returned 1.70%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to 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 Benchmark Index returned (12.12)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 600 small-cap securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. small-cap stock market.

Relative to the Benchmark Index, the Fund was most overweight in the food products industry and most underweight in the banks 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 the beverages and food products industries, respectively.

For the fiscal year ended August 31, 2022, the beverages industry contributed most significantly to the Fund’s return, followed by the food & staples retailing and food products industries, respectively. The personal products industry detracted

most significantly from the Fund’s return during the period, followed by the household products industry.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Cal-Maine Foods, Inc., a food products company (portfolio average weight of 3.61%), and Celsius Holdings, Inc., a beverages company (no longer held at fiscal year-end). Positions that detracted most significantly from the Fund’s return included Medifast, Inc., a personal products company (portfolio average weight of 6.18%), and WD-40 Co., a household products company (portfolio average weight of 6.18%).

 

Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Food Products			41.65
Personal Products			17.70
Food & Staples Retailing			17.65
Household Products			10.58
Beverages			6.31
Tobacco			6.03
Money Market Funds Plus Other Assets Less Liabilities			0.08
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
Hostess Brands, Inc.			7.59
Simply Good Foods Co. (The)			6.39
TreeHouse Foods, Inc.			6.18
WD-40 Co.			6.12
United Natural Foods, Inc.			6.08
J&J Snack Foods Corp.			5.28
Edgewell Personal Care Co.			4.87
Cal-Maine Foods, Inc.			4.76
elf Beauty, Inc.			4.33
PriceSmart, Inc.			3.61
Total			55.21

 

*	Excluding money market fund holdings.

Fund Inception: April 7, 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 0.29% 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 S&P SmallCap Energy ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S&P SmallCap 600^® Capped Energy Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is designed to measure the performance of securities of small-capitalization U.S. companies in the energy sector, as defined by the Global Industry Classification Standard (“GICS^®”). These companies are principally engaged in the business of producing, distributing or servicing energy related products and equipment, including relating to oil and gas exploration and production, refining, marketing, storage and transportation; and manufacturing equipment and the production and mining of coal, related products and other consumable fuels related to the generation of energy. The Index selects constituents from the S&P SmallCap 600^® Index (the “Benchmark Index”), which reflects the small-capitalization segment of the U.S. equity market. 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 53.18%. On a net asset value (“NAV”) basis, the Fund returned 53.42%. During the same time period, the Index returned 53.93%. 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, the effects of which were compounded during a time period of high returns.

During this same time period, the Benchmark Index returned (12.12)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 600 small-cap securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. small-cap stock market.

Relative to the Benchmark Index, the Fund was most overweight in the oil, gas & consumable fuels industry and most underweight in the banks 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 the oil, gas & consumable fuels industry.

For the fiscal year ended August 31, 2022, the oil, gas & consumable fuels industry contributed most significantly to the Fund’s return, followed by the energy equipment & services industry. No industry detracted from the Fund’s return during the period.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Matador Resources Co., an oil, gas & consumable fuels company (no longer held at fiscal year-end), and Range Resources Corp., an oil, gas & consumable fuels company (no longer held at fiscal year-end). Positions that detracted most significantly from the Fund’s return included Core Laboratories N.V., an energy equipment & services company (portfolio average weight of 2.41%), and DMC Global, Inc., an energy equipment & services company (portfolio average weight of 1.25%).

 

Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Oil, Gas & Consumable Fuels			60.68
Energy Equipment & Services			38.34
Money Market Funds Plus Other Assets Less Liabilities			0.98
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
SM Energy Co.			12.49
Civitas Resources, Inc.			11.29
Helmerich & Payne, Inc.			10.47
CONSOL Energy, Inc.			5.92
PBF Energy, Inc., Class A			5.61
Green Plains, Inc.			4.82
Patterson-UTI Energy, Inc.			4.76
Callon Petroleum Co.			4.70
World Fuel Services Corp.			4.18
Nabors Industries Ltd.			3.01
Total			67.25

 

*	Excluding money market fund holdings.

Fund Inception: April 7, 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 0.29% 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 S&P SmallCap Financials ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S&P SmallCap 600^® Capped Financials & Real Estate Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is designed to measure the performance of securities of small-capitalization U.S. companies in the financials and real estate sectors, as defined by the Global Industry Classification Standard (“GICS^®”). These companies, which may include real estate investment trusts (“REITs”), are principally engaged in the business of providing financial services and products, including banking, diversified financials, insurance and REITs and real estate management and development. The Index selects constituents from the S&P SmallCap 600^® Index (the “Benchmark Index”), which reflects the small-capitalization segment of the U.S. equity market. 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 (11.67)%. On a net asset value (“NAV”) basis, the Fund returned (11.81)%. During the same time period, the Index returned (11.60)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to 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 Benchmark Index returned (12.12)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 600 small-cap securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. small-cap stock market.

Relative to the Benchmark Index, the Fund was most overweight in the banks industry and most underweight in the machinery 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 the banks industry.

For the fiscal year ended August 31, 2022, the banks industry was the only industry to contribute to the Fund’s return. The equity REITs industry detracted most significantly from the Fund’s return during the period, followed by the consumer finance and insurance industries, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included BancFirst Corp., a banks company (portfolio average weight of 0.59%), and CVB Financial Corp., a banks company (portfolio average weight of 1.16%). Positions that detracted most significantly from the Fund’s return included Innovative Industrial Properties, Inc., an equity REITS company (portfolio average weight of 1.75%), and Green Dot Corp., Class A, a consumer finance company (portfolio average weight of 0.68%).

 

Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Banks			40.12
Equity REITs			27.32
Insurance			10.16
Thrifts & Mortgage Finance			8.45
Mortgage REITs			5.22
Capital Markets			3.72
Consumer Finance			3.13
Real Estate Management & Development			1.76
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
Agree Realty Corp.			2.44
ServisFirst Bancshares, Inc.			1.78
Independent Bank Corp.			1.58
United Community Banks, Inc.			1.52
Community Bank System, Inc.			1.52
CVB Financial Corp.			1.50
First Hawaiian, Inc.			1.42
Assured Guaranty Ltd.			1.41
Essential Properties Realty Trust, Inc.			1.36
Mr. Cooper Group, Inc.			1.35
Total			15.88

 

*	Excluding money market fund holdings.

Fund Inception: April 7, 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 0.29% 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 S&P SmallCap Health Care ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S&P SmallCap 600^® Capped Health Care Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is designed to measure the performance of securities of small-capitalization U.S. companies in the health care sector, as defined by the Global Industry Classification Standard (“GICS^®”). These companies are principally engaged in the business of providing healthcare-related products, facilities, equipment and services, including in areas such as biotechnology, pharmaceuticals, life sciences, medical technology and supplies. The Index selects constituents from the S&P SmallCap 600^® Index (the “Benchmark Index”), which reflects the small-capitalization segment of the U.S. equity market. 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 (26.24)%. On a net asset value (“NAV”) basis, the Fund returned (26.41)%. During the same time period, the Index returned (26.41)%. During the fiscal year, the Fund fully replicated the components of the Index. The fees and operating expenses that the Fund incurred during the period were offset by proceeds from the securities lending program in which the Fund participates and the contribution of the Fund being underweight a single security relative to the Index due to holdings restrictions enacted on the Fund, such that the Fund’s performance, on a NAV basis, matched the return of the Index.

During this same time period, the Benchmark Index returned (12.12)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 600 small-cap securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. small-cap stock market.

Relative to the Benchmark Index, the Fund was most overweight in the health care providers & services industry and most underweight in the banks 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 overweight allocation to the health care providers & services, biotechnology and life sciences tools & services industries, respectively.

For the fiscal year ended August 31, 2022, no industry contributed to the Fund’s return. The health care providers & services industry detracted most significantly from the Fund’s

return during the period, followed by the health care equipment & supplies and biotechnology industries, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Lantheus Holdings, Inc., a health care equipment & supplies company (portfolio average weight of 2.75%), and Cytokinetics, Inc., a biotechnology company (portfolio average weight of 2.81%). Positions that detracted most significantly from the Fund’s return included NeoGenomics, Inc., a life sciences tools & services company (portfolio average weight of 2.35%), and Omnicell, Inc., a health care equipment & supplies company (no longer held at fiscal year-end).

 

Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Health Care Providers & Services			29.65
Health Care Equipment & Supplies			27.75
Biotechnology			22.78
Pharmaceuticals			13.80
Health Care Technology			4.83
Life Sciences Tools & Services			1.18
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
Lantheus Holdings, Inc.			5.07
AMN Healthcare Services, Inc.			4.30
Cytokinetics, Inc.			4.25
Ensign Group, Inc. (The)			4.21
Merit Medical Systems, Inc.			2.83
Select Medical Holdings Corp.			2.48
CONMED Corp.			2.45
Prestige Consumer Healthcare, Inc.			2.38
Corcept Therapeutics, Inc.			2.32
Pacira BioSciences, Inc.			2.24
Total			32.53

 

*	Excluding money market fund holdings.

Fund Inception: April 7, 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 0.29% 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 S&P SmallCap Industrials ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S&P SmallCap 600^® Capped Industrials Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is designed to measure the performance of securities of small-capitalization U.S. companies in the industrials sector, as defined by the Global Industry Classification Standard (“GICS^®”). These companies are principally engaged in the business of producing capital goods, such as manufacturing aerospace and defense products, building products, electrical equipment, and machinery; providing commercial and professional services; and transportation such as railroads, air freight and logistics, airlines, and trucking. The Index selects constituents from the S&P SmallCap 600^® Index (the “Benchmark Index”), which reflects the small-capitalization segment of the U.S. equity market. 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 (7.43)%. On a net asset value (“NAV”) basis, the Fund returned (7.52)%. During the same time period, the Index returned (7.24)%. 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 Benchmark Index returned (12.12)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 600 small-cap securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. small-cap stock market.

Relative to the Benchmark Index, the Fund was most overweight in the machinery industry and most underweight in the banks 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 allocations to the trading companies & distributors, air freight & logistics and construction & engineering industries, respectively.

For the fiscal year ended August 31, 2022, the air freight & logistics industry contributed most significantly to the Fund’s return, followed by the trading companies & distributors and construction & engineering industries, respectively. The commercial services & supplies industry detracted most

significantly from the Fund’s return during the period, followed by the machinery and airlines industries, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Mueller Industries, Inc., a machinery company (portfolio average weight of 1.95%), and Meritor, Inc., a machinery company (no longer held at fiscal year-end). Positions that detracted most significantly from the Fund’s return included Resideo Technologies, Inc., a building products company (portfolio average weight of 2.15%), and Allegiant Travel Co., an airlines company (portfolio average weight of 1.47%).

 

Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Machinery			26.95
Commercial Services & Supplies			12.60
Building Products			12.07
Professional Services			9.35
Trading Companies & Distributors			8.27
Aerospace & Defense			7.65
Construction & Engineering			7.57
Air Freight & Logistics			5.44
Industry Types Each Less Than 3%			10.01
Money Market Funds Plus Other Assets Less Liabilities			0.09
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
UFP Industries, Inc.			3.41
Exponent, Inc.			3.33
Applied Industrial Technologies, Inc.			2.79
Comfort Systems USA, Inc.			2.47
Mueller Industries, Inc.			2.46
Franklin Electric Co., Inc.			2.31
Korn Ferry			2.25
John Bean Technologies Corp.			2.25
Aerojet Rocketdyne Holdings, Inc.			2.21
ABM Industries, Inc.			2.12
Total			25.60

 

*	Excluding money market fund holdings.

Fund Inception: April 7, 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 0.29% 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 S&P SmallCap Information Technology ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S&P SmallCap 600^® Capped Information Technology Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is designed to measure the performance of securities of small-capitalization U.S. companies in the information technology sector, as defined by the Global Industry Classification Standard (“GICS^®”). These companies are principally engaged in the business of providing information technology-related products and services, including, but not limited to, developing and producing software; manufacturing communication equipment and products, and electronic equipment and instruments; providing commercial electronic data processing; and manufacturing semiconductors and related products. The Index selects constituents from the S&P SmallCap 600^® Index (the “Benchmark Index”), which reflects the small-capitalization segment of the U.S. equity market. 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 (16.79)%. On a net asset value (“NAV”) basis, the Fund returned (16.87)%. During the same time period, the Index returned (16.65)%. During the fiscal year, the Fund fully replicated the components of the Index; therefore, the Fund’s performance, on a NAV basis, differed from the return of the Index primarily due to fees and operating expenses 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 Benchmark Index returned (12.12)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 600 small-cap securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. small-cap stock market.

Relative to the Benchmark Index, the Fund was most overweight in the electronic equipment, instruments & components industry and most underweight in the banks 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 overweight allocation to the semiconductors & semiconductor equipment and software industries, respectively.

For the fiscal year ended August 31, 2022, the communications equipment industry was the only industry to contribute to the Fund’s return. The semiconductors & semiconductor equipment industry detracted most significantly from the Fund’s return during the period, followed by the software and technology hardware storage & peripherals industries, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included Vonage Holdings Corp., a diversified telecommunication services company (no longer held at fiscal year-end), and ExlService Holdings, Inc., an IT services company (portfolio average weight of 3.49%). Positions that detracted most significantly from the Fund’s return included LivePerson, Inc., a software company (portfolio average weight of 1.50%), and 3D Systems Corp., a technology hardware, storage & peripherals company (portfolio average weight of 1.69%).

 

Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Electronic Equipment, Instruments & Components			31.66
Semiconductors & Semiconductor Equipment			23.68
Software			18.34
Communications Equipment			11.95
IT Services			11.77
Technology Hardware, Storage & Peripherals			2.60
Money Market Funds Plus Other Assets Less Liabilities			0.00
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
ExlService Holdings, Inc.			4.74
Rogers Corp.			3.98
SPS Commerce, Inc.			3.74
Fabrinet			3.21
Onto Innovation, Inc.			2.98
Advanced Energy Industries, Inc.			2.86
Diodes, Inc.			2.73
Viavi Solutions, Inc.			2.72
Insight Enterprises, Inc.			2.71
Alarm.com Holdings, Inc.			2.60
Total			32.27

 

*	Excluding money market fund holdings.

Fund Inception: April 7, 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 0.29% 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 S&P SmallCap Materials ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S&P SmallCap 600^® Capped Materials Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is designed to measure the performance of securities of small-capitalization U.S. companies in the basic materials sector, as defined by the Global Industry Classification Standard (“GICS^®”). These companies are principally engaged in the business of producing raw materials, including producing and manufacturing chemical products; manufacturing construction materials, containers, and packaging; mining metals and the production of related products; and manufacturing paper and forest products. The Index selects constituents from the S&P SmallCap 600^® Index (the “Benchmark Index”), which reflects the small-capitalization segment of the U.S. equity market. 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 (3.60)%. On a net asset value (“NAV”) basis, the Fund returned (3.69)%. During the same time period, the Index returned (3.55)%. 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 proceeds from the securities lending program in which the Fund participates.

During this same time period, the Benchmark Index returned (12.12)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 600 small-cap securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. small-cap stock market.

Relative to the Benchmark Index, the Fund was most overweight in the chemicals industry and most underweight in the banks 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 the chemicals and metals & mining industries, respectively.

For the fiscal year ended August 31, 2022, no industry contributed to the Fund’s return. The chemicals industry detracted most significantly from the Fund’s return during the period, followed by the containers & packaging and paper & forest products industries, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included ATI Inc., a metals & mining company (portfolio average weight of 5.37%), and Livent Corp., a chemicals company (portfolio average weight of 7.74%). Positions that detracted most significantly from the Fund’s return included Quaker Chemical Corp., a chemicals company (portfolio average weight of 4.99%), and Trinseo PLC, a chemicals company (portfolio average weight of 3.49%).

 

Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Chemicals			54.87
Metals & Mining			33.13
Paper & Forest Products			6.41
Containers & Packaging			5.54
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
Livent Corp.			10.54
Balchem Corp.			8.57
ATI, Inc.			7.52
H.B. Fuller Co.			6.97
Arconic Corp.			5.40
Quaker Chemical Corp.			4.77
Stepan Co.			4.51
Innospec, Inc.			4.40
O-I Glass, Inc.			4.12
Materion Corp.			3.61
Total			60.41

 

*	Excluding money market fund holdings.

Fund Inception: April 7, 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 0.29% 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 S&P SmallCap Utilities & Communication Services ETF (the “Fund”) is passively managed and seeks to track the investment results (before fees and expenses) of the S&P SmallCap 600^® Capped Utilities & Communication Services Index (the “Index”). The Fund generally will invest at least 90% of its total assets in the securities that comprise the Index.

Strictly in accordance with its guidelines and mandated procedures, S&P Dow Jones Indices, LLC (the “Index Provider”) compiles, maintains and calculates the Index, which is designed to measure the performance of securities of small-capitalization U.S. companies in the utilities and communication services sectors, as defined by the Global Industry Classification Standard (“GICS^®”). The utilities companies are principally engaged in providing either energy, water, electric or natural gas utilities. These companies may include companies that generate and supply electricity, including electricity wholesalers; distribute natural gas to customers; provide water to customers, as well as deal with associated wastewater. The communication services sector includes companies that facilitate communication or offer related content and information through various types of media and is comprised of companies from the following industries: diversified telecommunications services; wireless telecommunication services; media; entertainment; and interactive media and services. The Index selects constituents from the S&P SmallCap 600^® Index (the “Benchmark Index”), which reflects the small-capitalization segment of the U.S. equity market. 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 (11.23)%. On a net asset value (“NAV”) basis, the Fund returned (11.42)%. During the same time period, the Index returned (11.21)%. 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 proceeds from the securities lending program in which the Fund participates.

During this same time period, the Benchmark Index returned (12.12)%. The Benchmark Index is an unmanaged index weighted by market capitalization based on the average performance of approximately 600 small-cap securities. The Benchmark Index was selected for its recognition in the marketplace, and its performance comparison is a useful measure for investors as a broad representation of the overall U.S. small-cap stock market.

Relative to the Benchmark Index, the Fund was most overweight in the water utilities industry and most underweight in the banks 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 allocations to the gas utilities and multi-utilities industries, respectively.

For the fiscal year ended August 31, 2022, the gas utilities industry contributed most significantly to the Fund’s return, followed by the multi-utilities industry. The media industry detracted most significantly from the Fund’s return during the period, followed by the wireless telecommunication services and diversified telecommunication services industries, respectively.

Positions that contributed most significantly to the Fund’s return for the fiscal year ended August 31, 2022, included South Jersey Industries, Inc., a gas utilities company (portfolio average weight of 8.99%), and Meredith Corp., a media company (no longer held at fiscal year-end). Positions that detracted most significantly from the Fund’s return included Loyalty Ventures, Inc., a media company (no longer held at fiscal year-end), and AMC Networks, Inc., Class A, a media company (portfolio average weight of 3.39%).

 

Industry Breakdown (% of the Fund’s Net Assets) as of August 31, 2022
Water Utilities			20.22
Gas Utilities			18.76
Media			14.86
Interactive Media & Services			12.57
Wireless Telecommunication Services			10.30
Multi-Utilities			9.84
Diversified Telecommunication Services			8.37
Entertainment			4.94
Money Market Funds Plus Other Assets Less Liabilities			0.14
Top Ten Fund Holdings* (% of the Fund’s Net Assets) as of August 31, 2022
Security
South Jersey Industries, Inc.			10.62
California Water Service Group			8.06
American States Water Co.			7.86
Avista Corp.			7.54
Cogent Communications Holdings, Inc.			5.82
Yelp, Inc.			5.06
Telephone & Data Systems, Inc.			4.43
Middlesex Water Co.			4.30
Chesapeake Utilities Corp.			4.28
TechTarget, Inc.			4.28
Total			62.25

 

*	Excluding money market fund holdings.