UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21977
Invesco Exchange-Traded Fund Trust II
(Exact name of registrant as specified in charter)
3500 Lacey Road
Downers Grove, IL 60515
(Address of principal executive offices) (Zip code)
Anna Paglia
President
3500 Lacey Road
Downers Grove, IL 60515
(Name and address of agent for service)
Registrants telephone number, including area code: 800-983-0903
Date of fiscal year end: October 31
Date of reporting period: April 30, 2020
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (OMB) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
The Registrants semi- annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:
Invesco Semi-Annual Report to Shareholders
April 30, 2020
PBTP Invesco PureBetaSM 0-5 Yr US TIPS ETF
PBDM Invesco PureBetaSM FTSE Developed ex-North America ETF
PBEE Invesco PureBetaSM FTSE Emerging Markets ETF |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you hold accounts through a financial intermediary, you may contact your financial intermediary to enroll in electronic delivery. Please note that not all financial intermediaries may offer this service.
You may elect to receive all future reports in paper free of charge. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds held with your financial intermediary.
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2 |
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Liquidity Risk Management Program
The Securities and Exchange Commission (SEC) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the Liquidity Rule) in order to promote effective liquidity risk management throughout the open-end investment company industry, thereby reducing the risk that funds will be unable to meet their redemption obligations and mitigating dilution of the interests of fund shareholders. The Funds have adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the Program). The Program is reasonably designed to assess and manage the Funds liquidity risk, which is the risk that the Funds could not meet redemption requests without significant dilution of remaining investors interests in the Funds. The Board of Trustees of the Funds (the Board) has appointed Invesco Capital Management LLC (Invesco), the Funds investment adviser, as the Programs administrator, and Invesco has delegated oversight of the Program to the Liquidity Risk Management Committee (the Committee), which is composed of senior representatives from relevant business groups at Invesco and its affiliates.
As required by the Liquidity Rule, the Program includes policies and procedures providing for an assessment, no less frequently than annually, of the Funds liquidity risk that takes into account, as relevant to the Funds liquidity risk: (1) each Funds investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Funds during both normal and reasonably foreseeable stressed conditions; (3) each Funds holdings of cash and cash equivalents and any borrowing arrangements; (4) the relationship between the Funds portfolio liquidity and the way in which, and the prices and spreads at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants; and (5) the effect of the composition of baskets on the overall liquidity of each Funds portfolio. The Liquidity Rule also requires the classification of each Funds investments into categories that reflect the assessment of their relative liquidity under current market conditions. Each Fund classifies its investments into one of four categories defined in the Liquidity Rule: Highly Liquid, Moderately Liquid, Less Liquid and Illiquid. Funds that are not invested primarily in Highly Liquid Investments that are assets (cash or investments that are reasonably expected to be convertible into cash within three business days without significantly changing the market value of the investment) are required to establish a Highly Liquid Investment Minimum (HLIM), which is the minimum percentage of net assets that must be invested in Highly Liquid Investments. Funds with HLIMs have procedures for addressing HLIM shortfalls, including reporting to the Board and the SEC (on a non-public basis) as required by the Program and the Liquidity Rule. In addition, a Fund may not acquire an investment if, immediately after the acquisition, over 15% of such Funds net assets would consist of Illiquid Investments that are assets (an investment that cannot reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment). The Liquidity Rule and the Program also require reporting to the Board and the SEC (on a non-public basis) if a Funds holdings of Illiquid Investments exceed 15% of such Funds assets.
At a meeting held on March 12, 2020, the Committee presented a report to the Board that addressed the operation of the Program and assessed the Programs adequacy and effectiveness of implementation (the Report). The Report covered the period from December 1, 2018 through December 31, 2019 (the Program Reporting Period).
The Report stated, in relevant part, that during the Program Reporting Period:
● | The Program, as adopted and implemented, remained reasonably designed to assess and manage the Funds liquidity risk and was operated effectively to achieve that goal; |
● | Each Funds investment strategy remained appropriate for an open-end fund; |
● | Each Fund was able to meet requests for redemption without significant dilution of remaining investors interests in the Fund; |
● | The Funds did not breach the 15% limit on Illiquid Investments; and |
● | The Funds primarily held Highly Liquid Investments and therefore have not adopted an HLIM. |
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3 |
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Invesco PureBetaSM 0-5 Yr US TIPS ETF (PBTP)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | Principal amount of security and interest payments are adjusted for inflation. See Note 2J. |
(b) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco, Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: |
|||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class |
$ | 8,860 | $ | 796,532 | $ | (75,830 | ) | $ | - | $ | - | $ | 729,562 | $ | 135 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: |
|||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* |
- | 232,343 | (232,343 | ) | - | - | - | 115 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* |
- | 77,330 | (77,322 | ) | - | (8 | ) | - | 44 | ||||||||||||||||||||||||||
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Total |
$ | 8,860 | $ | 1,106,205 | $ | (385,495 | ) | $ | - | $ | (8 | ) | $ | 729,562 | $ | 294 | |||||||||||||||||||
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* | At April 30, 2020, this security was no longer held. |
(c) | The rate shown is the 7-day SEC standardized yield as of April 30, 2020. |
Portfolio Composition
Duration Breakdown (% of the Funds Net Assets)
as of April 30, 2020
Maturing in 0-5 Years | 99.87 | |||
Money Market Funds Plus Other Assets Less Liabilities |
0.13 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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4 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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5 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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6 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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7 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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8 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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9 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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10 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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11 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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12 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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13 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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14 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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15 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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16 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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17 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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18 |
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Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | All or a portion of this security was out on loan at April 30, 2020. |
(b) | Non-income producing security. |
(c) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $30,934, which represented 1.50% of the Funds Net Assets. |
(d) | Security valued using significant unobservable inputs (Level 3). See Note 4. |
(e) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(f) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
(g) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco, Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: |
|||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* |
$ | 4,955 | $ | 24,622 | $ | (29,577 | ) | $ | - | $ | - | $ | - | $ | 48 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: |
|||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* |
28,712 | 168,513 | (197,225 | ) | - | - | - | 157 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* |
9,571 | 35,680 | (45,253 | ) | (1 | ) | 3 | - | 59 | ||||||||||||||||||||||||||
Invesco Private Government Fund |
- | 133,297 | (65,682 | ) | - | - | 67,615 | - | |||||||||||||||||||||||||||
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Total |
$ | 43,238 | $ | 362,112 | $ | (337,737 | ) | $ | (1 | ) | $ | 3 | $ | 67,615 | $ | 264 | |||||||||||||||||||
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* | At April 30, 2020, this security was no longer held. |
Portfolio Composition
Sector Breakdown (% of the Funds Net Assets)
as of April 30, 2020
Financials |
15.80 | ||||
Industrials |
14.39 | ||||
Health Care |
13.89 | ||||
Consumer Staples |
11.66 | ||||
Consumer Discretionary |
11.17 | ||||
Information Technology |
9.44 | ||||
Materials |
7.30 | ||||
Communication Services |
5.45 | ||||
Utilities |
3.85 | ||||
Energy |
3.52 | ||||
Real Estate |
3.22 | ||||
Money Market Funds Plus Other Assets |
0.31 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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19 |
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Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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20 |
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Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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21 |
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Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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22 |
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Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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23 |
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Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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24 |
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Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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25 |
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Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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26 |
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Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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27 |
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Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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28 |
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Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
ADR-American Depositary Receipt
CPO-Certificates of Ordinary Participation
ETF-Exchange-Traded Fund
GDR-Global Depositary Receipt
NVDR-Non-Voting Depositary Receipt
REIT-Real Estate Investment Trust
Rts.-Rights
TBA-To Be Announced
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $106,157, which represented 5.16% of the Funds Net Assets. |
(c) | All or a portion of this security was out on loan at April 30, 2020. |
(d) | Security valued using significant unobservable inputs (Level 3). See Note 4. |
(e) | Each CPO for Cemex S.A.B. de C.V. represents two Series A shares and one Series B share. |
(f) | Each CPO for Fomento Economico Mexicano, S.A.B. de C.V. represents one Series B share and four Series D shares. |
(g) | Each CPO for Grupo Televisa S.A.B. represents twenty-five Series A shares, twenty-two Series B shares, thirty-five Series D shares and thirty-five Series L shares. |
(h) | Each CPO for Megacable Holdings S.A.B. de C.V. represents two Series shares. |
(i) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco, Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Invesco India ETF |
$ | 100,300 | $ | 38,414 | $ | (27,883 | ) | $ | (34,295 | ) | $ | 20,381 | $ | 96,917 | $ | 933 | |||||||||||||||||||
Investments in Affiliated Money Market Funds: |
|||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* |
5,726 | 64,285 | (70,011 | ) | - | - | - | 36 | |||||||||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: |
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Invesco Government & Agency Portfolio, Institutional Class* |
55,630 | 356,211 | (411,841 | ) | - | - | - | 175 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* |
18,251 | 84,158 | (102,410 | ) | (1 | ) | 2 | - | 67 | ||||||||||||||||||||||||||
Invesco Private Government Fund |
- | 39,772 | (21,638 | ) | - | - | 18,134 | - | |||||||||||||||||||||||||||
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Total |
$ | 179,907 | $ | 582,840 | $ | (633,783 | ) | $ | (34,296 | ) | $ | 20,383 | $ | 115,051 | $ | 1,211 | |||||||||||||||||||
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* | At April 30, 2020, this security was no longer held. |
(j) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(k) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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29 |
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Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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30 |
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Statements of Assets and Liabilities
April 30, 2020
(Unaudited)
Invesco PureBetaSM 0-5 Yr US TIPS ETF (PBTP) |
Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM) |
Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE) | |||||||||||||
Assets: | |||||||||||||||
Unaffiliated investments in securities, at value(a) |
$ | 10,019,047 | $ | 2,058,431 | $ | 1,955,949 | |||||||||
Affiliated investments in securities, at value |
729,562 | 67,615 | 115,051 | ||||||||||||
Foreign currencies, at value |
- | 592 | 1,732 | ||||||||||||
Receivable for: |
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Dividends and interest |
12,431 | 8,568 | 2,054 | ||||||||||||
Securities lending |
-42 | 18 | |||||||||||||
Foreign tax reclaims |
- | 487 | - | ||||||||||||
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Total assets |
10,761,040 | 2,135,735 | 2,074,804 | ||||||||||||
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Liabilities: | |||||||||||||||
Due to custodian |
- | 2,588 | 278 | ||||||||||||
Payable for: |
|||||||||||||||
Investments purchased |
727,757 | 509 | - | ||||||||||||
Collateral upon return of securities loaned |
- | 67,615 | 18,134 | ||||||||||||
Accrued unitary management fees |
521 | 112 | 169 | ||||||||||||
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Total liabilities |
728,278 | 70,824 | 18,581 | ||||||||||||
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Net Assets | $ | 10,032,762 | $ | 2,064,911 | $ | 2,056,223 | |||||||||
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Net assets consist of: | |||||||||||||||
Shares of beneficial interest |
$ | 9,914,359 | $ | 2,500,025 | $ | 2,500,025 | |||||||||
Distributable earnings (loss) |
118,403 | (435,114 | ) | (443,802 | ) | ||||||||||
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Net Assets | $ | 10,032,762 | $ | 2,064,911 | $ | 2,056,223 | |||||||||
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Shares outstanding (unlimited amount authorized, $0.01 par value) |
400,001 | 100,001 | 100,001 | ||||||||||||
Net asset value |
$ | 25.08 | $ | 20.65 | $ | 20.56 | |||||||||
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Market price |
$ | 25.09 | $ | 20.56 | $ | 20.43 | |||||||||
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Unaffiliated investments in securities, at cost |
$ | 9,975,477 | $ | 2,470,688 | $ | 2,279,128 | |||||||||
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Affiliated investments in securities, at cost |
$ | 729,562 | $ | 67,615 | $ | 149,371 | |||||||||
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Foreign currencies, at cost |
$ | - | $ | 657 | $ | 1,694 | |||||||||
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(a) Includes securities on loan with an aggregate value of: |
$ | - | $ | 62,725 | $ | 17,415 | |||||||||
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See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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31 |
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For the six months ended April 30, 2020
(Unaudited)
Invesco PureBetaSM 0-5 Yr US TIPS ETF (PBTP) |
Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM) |
Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE) | |||||||||||||
Investment income: | |||||||||||||||
Unaffiliated interest income |
$ | 95,974 | $ | - | $ | - | |||||||||
Unaffiliated dividend income |
- | 31,578 | 19,034 | ||||||||||||
Affiliated dividend income |
135 | 48 | 969 | ||||||||||||
Securities lending income |
33 | 174 | 267 | ||||||||||||
Foreign withholding tax |
- | (4,847 | ) | (1,489 | ) | ||||||||||
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Total investment income |
96,142 | 26,953 | 18,781 | ||||||||||||
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Expenses: | |||||||||||||||
Unitary management fees |
3,531 | 808 | 1,612 | ||||||||||||
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Less: Waivers |
(61 | ) | (6 | ) | (355 | ) | |||||||||
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Net expenses |
3,470 | 802 | 1,257 | ||||||||||||
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||||||||||
Net investment income |
92,672 | 26,151 | 17,524 | ||||||||||||
|
|
|
|
|
|
||||||||||
Realized and unrealized gain (loss) from: | |||||||||||||||
Net realized gain (loss) from: |
|||||||||||||||
Unaffiliated investment securities |
6,067 | (5,019 | ) | (45,708 | ) | ||||||||||
Affiliated investment securities |
(8 | ) | 3 | 20,283 | |||||||||||
Unaffiliated in-kind redemptions |
26,719 | - | - | ||||||||||||
Affiliated in-kind redemptions |
- | - | 100 | ||||||||||||
Foreign currencies |
- | (409 | ) | (329 | ) | ||||||||||
|
|
|
|
|
|
||||||||||
Net realized gain (loss) |
32,778 | (5,425 | ) | (25,654 | ) | ||||||||||
|
|
|
|
|
|
||||||||||
Change in net unrealized appreciation (depreciation) of: |
|||||||||||||||
Unaffiliated investment securities |
7,345 | (357,149 | ) | (246,582 | ) | ||||||||||
Affiliated investment securities |
- | (1 | ) | (34,296 | ) | ||||||||||
Foreign currencies |
- | 113 | (151 | ) | |||||||||||
|
|
|
|
|
|
||||||||||
Change in net unrealized appreciation (depreciation) |
7,345 | (357,037 | ) | (281,029 | ) | ||||||||||
|
|
|
|
|
|
||||||||||
Net realized and unrealized gain (loss) |
40,123 | (362,462 | ) | (306,683 | ) | ||||||||||
|
|
|
|
|
|
||||||||||
Net increase (decrease) in net assets resulting from operations |
$ | 132,795 | $ | (336,311 | ) | $ | (289,159 | ) | |||||||
|
|
|
|
|
|
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
32 |
|
Statements of Changes in Net Assets
For the six months ended April 30, 2020 and the year ended October 31, 2019
(Unaudited)
Invesco PureBetaSM 0-5 Yr US TIPS ETF (PBTP) |
Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM) |
Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE) | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2020 |
Year Ended October 31, 2019 |
Six Months Ended April 30, 2020 |
Year Ended October 31, 2019 |
Six Months Ended April 30, 2020 |
Year Ended October 31, 2019 | |||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||
Net investment income |
$ | 92,672 | $ | 128,264 | $ | 26,151 | $ | 69,394 | $ | 17,524 | $ | 73,602 | ||||||||||||||||||
Net realized gain (loss) |
32,778 | (9,433 | ) | (5,425 | ) | (12,087 | ) | (25,654 | ) | (38,649 | ) | |||||||||||||||||||
Change in net unrealized appreciation (depreciation) |
7,345 | 90,771 | (357,037 | ) | 172,266 | (281,029 | ) | 244,976 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
132,795 | 209,602 | (336,311 | ) | 229,573 | (289,159 | ) | 279,929 | ||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|||||||||||||||||||
Distributions to Shareholders from: | ||||||||||||||||||||||||||||||
Distributable earnings |
(47,416 | ) | (116,574 | ) | (29,994 | ) | (78,552 | ) | (40,581 | ) | (59,836 | ) | ||||||||||||||||||
|
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|
|
|
|
|
|
|
|||||||||||||||||||
Shareholder Transactions: | ||||||||||||||||||||||||||||||
Proceeds from shares sold |
3,740,954 | 4,933,735 | - | - | - | - | ||||||||||||||||||||||||
Value of shares repurchased |
(1,260,355 | ) | - | - | - | - | - | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net increase in net assets resulting from share transactions |
2,480,599 | 4,933,735 | - | - | - | - | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net increase (decrease) in net assets |
2,565,978 | 5,026,763 | (366,305 | ) | 151,021 | (329,740 | ) | 220,093 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net assets: | ||||||||||||||||||||||||||||||
Beginning of period |
7,466,784 | 2,440,021 | 2,431,216 | 2,280,195 | 2,385,963 | 2,165,870 | ||||||||||||||||||||||||
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|||||||||||||||||||
End of period |
$ | 10,032,762 | $ | 7,466,784 | $ | 2,064,911 | $ | 2,431,216 | $ | 2,056,223 | $ | 2,385,963 | ||||||||||||||||||
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|||||||||||||||||||
Changes in Shares Outstanding: | ||||||||||||||||||||||||||||||
Shares sold |
150,000 | 200,000 | - | - | - | - | ||||||||||||||||||||||||
Shares repurchased |
(50,000 | ) | - | - | - | - | - | |||||||||||||||||||||||
Shares outstanding, beginning of period |
300,001 | 100,001 | 100,001 | 100,001 | 100,001 | 100,001 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
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|
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|
|||||||||||||||||||
Shares outstanding, end of period |
400,001 | 300,001 | 100,001 | 100,001 | 100,001 | 100,001 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
33 |
|
Invesco PureBetaSM 0-5 Yr US TIPS ETF (PBTP)
Six Months Ended April 30, 2020 |
Years Ended October 31, | For the Period September 19, 2017(a) Through October 31, | ||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | |||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||
Net asset value at beginning of period |
$ | 24.89 | $ | 24.40 | $ | 24.99 | $ | 25.00 | ||||||||||||
Net investment income(b) |
0.23 | 0.59 | 0.63 | 0.06 | ||||||||||||||||
Net realized and unrealized gain (loss) on investments |
0.08 | 0.39 | (0.55 | ) | (0.07 | ) | ||||||||||||||
Total from investment operations |
0.31 | 0.98 | 0.08 | (0.01 | ) | |||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||
Net investment income |
(0.12 | ) | (0.49 | ) | (0.67 | ) | - | |||||||||||||
Net asset value at end of period |
$ | 25.08 | $ | 24.89 | $ | 24.40 | $ | 24.99 | ||||||||||||
Market price at end of period(c) |
$ | 25.09 | $ | 24.90 | $ | 24.40 | $ | 24.99 | ||||||||||||
Net Asset Value Total Return(d) | 1.25 | % | 4.04 | % | 0.33 | % | (0.04 | )%(e) | ||||||||||||
Market Price Total Return(d) | 1.24 | % | 4.07 | % | 0.33 | % | (0.04 | )%(e) | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 10,033 | $ | 7,467 | $ | 2,440 | $ | 2,499 | ||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||
Expenses |
0.07 | %(f) | 0.20 | %(g) | 0.07 | % | 0.07 | %(f) | ||||||||||||
Net investment income |
1.84 | %(f) | 2.39 | %(g) | 2.53 | % | 2.22 | %(f) | ||||||||||||
Portfolio turnover rate(h) |
18 | % | 30 | % | 19 | % | 0 | % |
(a) | Commencement of investment operations. |
(b) | Based on average shares outstanding. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | The net asset value total return from Fund Inception (September 22, 2017, the first day of trading on the Exchange) to October 31, 2017 was 0.12%. The market price total return from Fund Inception to October 31, 2017 was 0.12%. |
(f) | Annualized. |
(g) | Ratios include non-recurring costs associated with a proxy statement of 0.13%. |
(h) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
34 |
|
Financial Highlights(continued)
Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM)
Six Months Ended April 30, 2020 |
Years Ended October 31, | For the Period September 19, 2017(a) Through October 31, | ||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | |||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||
Net asset value at beginning of period |
$24.31 | $22.80 | $25.37 | $25.00 | ||||||||||||||||
Net investment income(b) |
0.26 | 0.69 | 0.73 | 0.07 | ||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(3.62 | ) | 1.61 | (2.60 | ) | 0.30 | ||||||||||||||
Total from investment operations |
(3.36 | ) | 2.30 | (1.87 | ) | 0.37 | ||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||
Net investment income |
(0.30 | ) | (0.77 | ) | (0.70 | ) | - | |||||||||||||
Net realized gains |
- | (0.02 | ) | - | - | |||||||||||||||
Total distributions |
(0.30 | ) | (0.79 | ) | (0.70 | ) | - | |||||||||||||
Net asset value at end of period |
$20.65 | $24.31 | $22.80 | $25.37 | ||||||||||||||||
Market price at end of period(c) |
$20.56 | $24.35 | $23.03 | $25.54 | ||||||||||||||||
Net Asset Value Total Return(d) | (13.71 | )% | 10.31 | % | (7.60 | )% | 1.48 | %(e) | ||||||||||||
Market Price Total Return(d) | (14.24 | )% | 9.37 | % | (7.30 | )% | 2.16 | %(e) | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets at end of period (000s omitted) |
$2,065 | $2,431 | $2,280 | $2,537 | ||||||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||
Expenses |
0.07 | %(f) | 0.37 | %(g) | 0.07 | % | 0.07 | %(f) | ||||||||||||
Net investment income |
2.27 | %(f) | 2.99 | %(g) | 2.89 | % | 2.38 | %(f) | ||||||||||||
Portfolio turnover rate(h) |
1 | % | 4 | % | 7 | % | 2 | % |
(a) | Commencement of investment operations. |
(b) | Based on average shares outstanding. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | The net asset value total return from Fund Inception (September 22, 2017, the first day of trading on the Exchange) to October 31, 2017 was 1.80%. The market price total return from Fund Inception to October 31, 2017 was 2.12%. |
(f) | Annualized. |
(g) | Ratios include non-recurring costs associated with a proxy statement of 0.30%. |
(h) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
35 |
|
Financial Highlights(continued)
Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE)
Six Months Ended April 30, 2020 (Unaudited) |
Years Ended October 31, |
For the Period September 19, 2017(a) Through October 31, 2017 | ||||||||||||||||||
2019 | 2018 | |||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||
Net asset value at beginning of period |
$ | 23.86 | $ | 21.66 | $ | 25.07 | $ | 25.00 | ||||||||||||
Net investment income(b) |
0.18 | 0.74 | (c) | 0.66 | 0.03 | |||||||||||||||
Net realized and unrealized gain (loss) on investments |
(3.07 | ) | 2.06 | (3.42 | ) | 0.04 | ||||||||||||||
Total from investment operations |
(2.89 | ) | 2.80 | (2.76 | ) | 0.07 | ||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||
Net investment income |
(0.41 | ) | (0.60 | ) | (0.65 | ) | - | |||||||||||||
Net asset value at end of period |
$ | 20.56 | $ | 23.86 | $ | 21.66 | $ | 25.07 | ||||||||||||
Market price at end of period(d) |
$ | 20.43 | $ | 23.82 | $ | 21.75 | $ | 25.20 | ||||||||||||
Net Asset Value Total Return(e) | (12.24 | )% | 13.02 | % | (11.28 | )% | 0.28 | %(f) | ||||||||||||
Market Price Total Return(e) | (12.65 | )% | 12.34 | % | (11.38 | )% | 0.80 | %(f) | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 2,056 | $ | 2,386 | $ | 2,166 | $ | 2,507 | ||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||
Expenses, after Waivers |
0.11 | %(g)(h) | 0.39 | %(h)(i) | 0.11 | % | 0.14 | %(g) | ||||||||||||
Expenses, prior to Waivers |
0.14 | %(g)(h) | 0.43 | %(h)(i) | 0.14 | % | 0.14 | %(g) | ||||||||||||
Net investment income |
1.52 | %(g) | 3.16 | %(c)(i) | 2.64 | % | 1.03 | %(g) | ||||||||||||
Portfolio turnover rate(j) |
9 | % | 13 | % | 16 | % | 1 | % |
(a) | Commencement of investment operations. |
(b) | Based on average shares outstanding. |
(c) | Net Investment income per share and the ratio of net investment income to average net assets include a non-cash taxable distribution received during the year. Net investment income per share and the ratio of net investment income to average net assets excluding the non-cash taxable distribution are $0.56 and 2.39%, respectively. |
(d) | The mean between the last bid and ask prices. |
(e) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(f) | The net asset value total return from Fund Inception (September 22, 2017, the first day of trading on the Exchange) to October 31, 2017 was 1.05%. The market price total return from Fund Inception to October 31, 2017 was (0.39)%. |
(g) | Annualized. |
(h) | In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the investment companies in which the Fund invests. Estimated investment companies expenses are not expenses that are incurred directly by the Fund. They are expenses that are incurred directly by the investment companies and are deducted from the value of the investment companies the Fund invests in. The effect of the estimated investment companies expenses that the Fund bears indirectly is included in the Funds total return. |
(i) | Ratios include non-recurring costs associated with a proxy statement of 0.29%. |
(j) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
36 |
|
Invesco Exchange-Traded Fund Trust II
April 30, 2020
(Unaudited)
NOTE 1Organization
Invesco Exchange-Traded Fund Trust II (the Trust) was organized as a Massachusetts business trust on October 10, 2006 and is authorized to have multiple series of portfolios. The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act). This report includes the following portfolios:
Full Name |
Short Name | |
Invesco PureBetaSM 0-5 Yr US TIPS ETF (PBTP) | PureBetaSM 0-5 Yr US TIPS ETF | |
Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM) | PureBetaSM FTSE Developed ex-North America ETF | |
Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE) | PureBetaSM FTSE Emerging Markets ETF |
Each portfolio (each, a Fund, and collectively, the Funds) represents a separate series of the Trust. The shares of the Funds are referred to herein as Shares or Funds Shares. Each Funds Shares are listed and traded on Cboe BZX Exchange, Inc.
The market price of each Share may differ to some degree from a Funds net asset value (NAV). Unlike conventional mutual funds, each Fund issues and redeems Shares on a continuous basis, at NAV, only in a large specified number of Shares, each called a Creation Unit. Creation Units are issued and redeemed principally in exchange for the deposit or delivery of a basket of securities (Deposit Securities). Except when aggregated in Creation Units by Authorized Participants, the Shares are not individually redeemable securities of the Funds.
The investment objective of each Fund is to seek to track the investment results (before fees and expenses) of its respective index listed below (each, an Underlying Index):
Fund |
Underlying Index | |
PureBetaSM 0-5 Yr US TIPS ETF | ICE BofAML 0-5 Year US Inflation-Linked Treasury IndexSM | |
PureBetaSM FTSE Developed ex-North America ETF | FTSE Developed ex North America Index | |
PureBetaSM FTSE Emerging Markets ETF | FTSE Emerging Index |
NOTE 2Significant Accounting Policies
The following is a summary of the significant accounting policies followed by the Funds in preparation of their financial statements.
Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial ServicesInvestment Companies.
A. | Security Valuation - Securities, including restricted securities, are valued according to the following policies: |
A security listed or traded on an exchange (except convertible securities) is generally valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded or, lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked prices from the exchange on which they are principally traded, or at the final settlement price set by such exchange. Swaps and options not listed on an exchange are valued by an independent source. For purposes of determining NAV per Share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investment companies are valued using such companys NAV per share, unless the shares are exchange-traded, in which case they are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a Fund may hold or transact in the same
|
37 |
|
securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the London world markets. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that Invesco Capital Management LLC (the Adviser) determines are significant and make the closing price unreliable, a Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, the potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value exchange-traded equity securities. The mean between the last bid and asked prices may be used to value debt obligations, including corporate loans, and unlisted equity securities.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith following procedures approved by the Board of Trustees. Issuer-specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
Each Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund investments.
Valuations change in response to many factors, including the historical and prospective earnings of the issuer, the value of the issuers assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or adverse investor sentiment generally and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Other Risks |
Authorized Participant Concentration Risk. Only Authorized Participants (APs) may engage in creation or redemption transactions directly with each Fund. Each Fund has a limited number of institutions that may act as APs, and such APs have no obligation to submit creation or redemption orders. Consequently, there is no assurance that APs will establish or maintain an active trading market for the Shares. This risk may be heightened to the extent that securities held by each Fund are traded outside a collateralized settlement system. In that case, APs may be required to post collateral on certain trades on an agency basis (i.e., on behalf of other market participants), which only a limited number of APs may be able to do. In addition, to the extent that APs exit the business or are unable to proceed with creation and/or redemption orders with respect to each Fund and no other AP is able to step forward to create or redeem Creation Units, this may result in a significantly diminished trading market for Shares, and Shares may be more likely to trade at a premium or discount to each Funds NAV and to face trading halts and/or delisting. Investments in non-U.S. securities, which may have lower trading volumes, may increase this risk.
Currency Risk. Because each Funds NAV is determined in U.S. dollars, a Funds NAV could decline if the currency of a non-U.S. market in which the Fund invests depreciates against the U.S. dollar. Generally, an increase in the value of the U.S. dollar against a foreign currency will reduce the value of a security denominated in that foreign currency, thereby decreasing a Funds overall NAV. Exchange rates may be volatile and may change quickly and unpredictably in response to both global economic developments and economic conditions, causing an adverse impact on the Fund. As a result, investors have the potential for losses regardless of the length of time they intend to hold Shares.
Emerging Markets Investment Risk. For certain Funds, investments in the securities of issuers in emerging market countries involve risks often not associated with investments in the securities of issuers in developed countries. Securities in emerging
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markets may be subject to greater price fluctuations than securities in more developed markets. Fluctuations in the value of the U.S. dollar relative to the values of other currencies may adversely affect investments in emerging market securities, and emerging market securities may have relatively low market liquidity, decreased publicly available information about issuers, and inconsistent and potentially less stringent accounting, auditing and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Emerging market securities also are subject to the risks of expropriation, nationalization or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. Investments in emerging market securities also may be subject to dividend withholding or confiscatory taxes, currency blockage and/or transfer restrictions. Emerging markets usually are subject to greater market volatility, lower trading volume, political and economic instability, uncertainty regarding the existence of trading markets and more governmental limitations on foreign investment than are more developed markets. Securities law in many emerging market countries is relatively new and unsettled. Therefore, laws regarding foreign investment in emerging market securities, securities regulation, title to securities, and shareholder rights may change quickly and unpredictably. In addition, the enforcement of systems of taxation at federal, regional and local levels in emerging market countries may be inconsistent and subject to sudden change.
Equity Risk. Equity risk is the risk that the value of equity securities, including common stocks, may fall due to both changes in general economic conditions that impact the market as a whole, as well as factors that directly relate to a specific company or its industry. Such general economic conditions include changes in interest rates, periods of market turbulence or instability, or general and prolonged periods of economic decline and cyclical change. It is possible that a drop in the stock market may depress the price of most or all of the common stocks that each Fund holds. In addition, equity risk includes the risk that investor sentiment toward one or more industries will become negative, resulting in those investors exiting their investments in those industries, which could cause a reduction in the value of companies in those industries more broadly. The value of a companys common stock may fall solely because of factors, such as an increase in production costs, that negatively impact other companies in the same region, industry or sector of the market. A companys common stock also may decline significantly in price over a short period of time due to factors specific to that company, including decisions made by its management or lower demand for the companys products or services. For example, an adverse event, such as an unfavorable earnings report or the failure to make anticipated dividend payments, may depress the value of common stock.
Fixed-Income Securities Risk. Fixed-income securities are subject to interest rate risk and credit risk. Interest rate risk refers to fluctuations in the value of a fixed-income security resulting from changes in the general level of interest rates. When the general level of interest rates goes up, the prices of most fixed-income securities go down. When the general level of interest rates goes down, the prices of most fixed-income securities go up. Fixed-income securities with longer maturities typically are more sensitive to changes in interest rates, making them more volatile than securities with shorter maturities. Credit risk refers to the possibility that the issuer of a security will be unable and/or unwilling to make timely interest payments and/or repay the principal on its debt. Debt instruments are subject to varying degrees of credit risk, which may be reflected in credit ratings. There is a possibility that the credit rating of a fixed-income security may be downgraded after purchase, which may adversely affect the value of the security.
Foreign Investment Risk. For certain Funds, investments in the securities of non-U.S. issuers involve risks beyond those associated with investments in U.S. securities. Foreign securities may have relatively low market liquidity, greater market volatility, decreased publicly available information and less reliable financial information about issuers, and inconsistent and potentially less stringent accounting, auditing and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Foreign securities also are subject to risk of expropriation, nationalization, political instability or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. Investments in foreign securities also may be subject to dividend withholding or confiscatory taxes, currency blockage and/or transfer restrictions and higher transactional costs. If a Fund invests in securities denominated in foreign currencies, fluctuations in the value of the U.S. dollar relative to the values of other currencies may adversely affect investments in foreign securities and may negatively impact the Funds returns.
Geographic Concentration Risk. A natural or other disaster could occur in a country or geographic region in which a Fund invests, which could affect the economy or particular business operations of companies in that specific country or geographic region and adversely impact the Funds investments in the affected country or region.
Index Risk. Unlike many investment companies, each Fund does not utilize an investing strategy that seeks returns in excess of its Underlying Index. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its Underlying Index, even if that security generally is underperforming. Additionally, each Fund rebalances its portfolio in accordance with its Underlying Index, and, therefore, any changes to the Underlying Indexs rebalance schedule will result in corresponding changes to each Funds rebalance schedule.
Industry Concentration Risk. In following its methodology, each Funds Underlying Index from time to time may be concentrated to a significant degree in securities of issuers operating in a single industry or industry group. To the extent that each Underlying Index concentrates in the securities of issuers in a particular industry or industry group, the corresponding Fund will also concentrate its investments to approximately the same extent. By concentrating its investments in an industry or industry group, each Fund may face more risks than if it were diversified broadly over numerous industries or industry groups. Such industry-based risks, any of which may adversely affect the companies in which each Fund invests, may include,
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but are not limited to, legislative or regulatory changes, adverse market conditions and/or increased competition within the industry or industry group. In addition, at times, such industry or industry group may be out of favor and underperform other industries, industry groups or the market as a whole.
Inflation-Linked Security Risk. For certain Funds, the value of inflation-linked securities generally will fluctuate in response to changes in real interest rates, generally decreasing when real interest rates rise and increasing when real interest rates fall. Real interest rates represent nominal (or stated) interest rates reduced by the expected impact of inflation. In addition, interest payments on inflation -indexed securities will generally vary up or down along with the rate of inflation.
Liquidity Risk. For certain Funds, liquidity risk exists when a particular investment is difficult to purchase or sell. If the Fund invests in illiquid securities or current portfolio securities become illiquid, it may reduce the returns of the Fund because the Fund may be unable to sell the illiquid securities at an advantageous time or price.
Market Risk. Securities in the Underlying Index are subject to market fluctuations. You should anticipate that the value of the Shares will decline more or less, in correlation with any decline in value of the securities in the Underlying Index. Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to each Funds NAV.
Non-Correlation Risk. Each Funds return may not match the return of its corresponding Underlying Index for a number of reasons. For example, each Fund incurs operating expenses not applicable to the Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the Funds securities holdings to reflect changes in the composition of its corresponding Underlying Index. Additionally, a Funds use of a representative sampling approach may cause the Fund not to be as well-correlated with the return of its corresponding Underlying Index as would be the case if the Fund purchased all of the securities in its corresponding Underlying Index in the proportions represented in the Underlying Index. In addition, the performance of each Fund and its corresponding Underlying Index may vary due to asset valuation differences and differences between each Funds portfolio and its corresponding Underlying Index resulting from legal restrictions, costs or liquidity constraints.
Non-Diversified Fund Risk. Each Fund is non-diversified and can invest a greater portion of its assets in securities of individual issuers than a diversified fund, changes in the market value of a single investment could cause greater fluctuations in Share price than would occur in a diversified fund. This may increase a Funds volatility and cause the performance of a relatively small number of issuers to have a greater impact on a Funds performance.
Sampling Risk. Certain Funds use of a representative sampling approach may result in the Fund holding a smaller number of securities than are in its respective Underlying Index. As a result, an adverse development to an issuer of securities that the Fund holds could result in a greater decline in NAV than would be the case if the Fund held all of the securities in its Underlying Index. To the extent the assets in the Fund are smaller, these risks will be greater.
Small- and Mid-Capitalization Company Risk. Certain Funds invest in securities of small- and mid- capitalization companies, which involves greater risk than customarily is associated with investing in larger, more established companies. These companies securities may be more volatile and less liquid than those of more established companies. These securities may have returns that vary, sometimes significantly, from the overall securities market. Often small- and mid-capitalization companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.
U.S. Government Obligation/Securities Risk. Certain Funds may invest in U.S. government obligations issued or guaranteed by the U.S. Government, its agencies and instrumentalities, including bills, notes and bonds issued by the U.S. Treasury. U.S. Government securities include securities that are issued or guaranteed by the United States Treasury, by various agencies of the U.S. Government, or by various instrumentalities which have been established or sponsored by the U.S. Government. U.S. Treasury securities are backed by the full faith and credit of the United States. Securities issued or guaranteed by federal agencies and U.S. Government-sponsored instrumentalities may or may not be backed by the full faith and credit of the United States. In the case of those U.S. Government securities not backed by the full faith and credit of the United States, the investor must look principally to the agency or instrumentality issuing or guaranteeing the security for ultimate repayment, and may not be able to assert a claim against the United States itself in the event that the agency or instrumentality does not meet its commitment. The U.S. Government, its agencies and instrumentalities do not guarantee the market value of their securities, and consequently, the value of such securities may fluctuate.
Valuation Risk. Financial information related to securities of non-U.S. issuers may be less reliable than information related to securities of U.S. issuers, which may make it difficult to obtain a current price for a non-U.S. security held by a Fund. In certain circumstances, market quotations may not be readily available for some Fund securities, and those securities may be fair valued. The value established for a security through fair valuation may be different from what would be produced if the security had been valued using market quotations. Fund securities that are valued using techniques other than market quotations, including fair valued securities, may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. In addition, there is no assurance that a Fund could sell a portfolio security for the value established for it at any time, and it is possible that a Fund would incur a loss because a security is sold at a discount to its established value.
C. | Investment Transactions and Investment Income - Investment transactions are accounted for on a trade date basis. Realized gains and losses from the sale or disposition of securities are computed on the specific identified cost basis. Interest |
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income is recorded on an accrual basis from settlement date. Bond premiums and discounts are amortized and/or accreted over the lives of the respective securities. Pay-in-kind interest income and non-cash dividend income received in the form of securities in-lieu of cash are recorded at the fair value of the securities received. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Realized gains, dividends and interest received by a Fund may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. |
The Funds may periodically participate in litigation related to each Funds investments. As such, the Funds may receive proceeds from litigation settlements. Any proceeds received are included in the Statements of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statements of Operations and the Statements of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of each Funds NAV and, accordingly, they reduce each Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statements of Operations and the Statements of Changes in Net Assets, or the net investment income per share and the ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between each Fund and the Adviser.
D. | Country Determination - For the purposes of presentation in the Schedules of Investments, the Adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include whether each Funds Underlying Index has made a country determination and may include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
E. | Dividends and Distributions to Shareholders - Each Fund declares and pays dividends from net investment income, if any, to its shareholders quarterly and records such dividends on the ex-dividend date. Generally, each Fund distributes net realized taxable capital gains, if any, annually in cash and records them on the ex-dividend date. Such distributions on a tax basis are determined in conformity with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America (GAAP). Distributions in excess of tax basis earnings and profits, if any, are reported in such Funds financial statements as a tax return of capital at fiscal year-end. |
F. | Federal Income Taxes - Each Fund intends to comply with the provisions of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), applicable to regulated investment companies and to distribute substantially all of the Funds taxable earnings to its shareholders. As such, the Funds will not be subject to federal income taxes on otherwise taxable income (including net realized gains) that is distributed to the shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
Each Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed each Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing book and tax treatments for in-kind transactions, losses deferred due to wash sales, and passive foreign investment company adjustments, if any.
The Funds file U.S. federal tax returns and tax returns in certain other jurisdictions. Generally, a Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
G. | Expenses - Each Fund has agreed to pay an annual unitary management fee to the Adviser. Out of the unitary management fee, the Adviser has agreed to pay for substantially all expenses of the Funds, including the costs of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses. |
Expenses of the Trust that are excluded from a Funds unitary management fee and are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that are excluded from a Funds unitary management fee and are not readily identifiable to a specific Fund are allocated in such a manner as deemed equitable, taking into consideration the nature and type of expense and the relative net assets of each Fund.
To the extent a Fund invests in other investment companies, the expenses shown in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the investment companies in which it invests. The effects of such investment companies expenses are included in the realized and unrealized gain or loss on the investments in the investment companies.
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H. | Accounting Estimates - The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements, including estimates and assumptions related to taxation. Actual results could differ from these estimates. In addition, the Funds monitor for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
I. | Indemnifications - Under the Trusts organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. Each Board member who is not an interested person (as defined in the 1940 Act) of the Trust (each, an Independent Trustee) is also indemnified against certain liabilities arising out of the performance of their duties to the Trust pursuant to an Indemnification Agreement between such trustee and the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trusts maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. However, based on experience, the Trust believes the risk of loss to be remote. |
J. | Treasury Inflation-Protected Securities - PureBetaSM 0-5 Yr US TIPS ETF may invest in Treasury Inflation-Protected Securities (TIPS). TIPS are fixed income securities whose principal value is periodically adjusted to the rate of inflation. The principal value of TIPS will be adjusted upward or downward, and any increase or decrease in the principal amount of TIPS will be included as Treasury Inflation-Protected Securities inflation adjustment in the Statements of Operations, even though investors do not receive their principal until maturity. |
K. | Securities Lending - Each Fund may participate in securities lending and may loan portfolio securities having a market value up to one-third of the Funds total assets. Such loans are secured by cash collateral equal to no less than 102% (105% for international securities) of the market value of the loaned securities determined daily by the securities lending provider. Cash collateral received in connection with these loans is generally invested in an affiliated money market fund and is shown as such on the Schedules of Investments. Each Fund bears the risk of loss with respect to the investment of collateral. It is the policy of these Funds to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. When loaning securities, each Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. Lending securities entails a risk of loss to each Fund if, and to the extent that, the market value of the securities loaned were to increase, and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. The securities loaned are subject to termination at the option of the borrower or each Fund. Upon termination, the borrower will return to each Fund the securities loaned and each Fund will return the collateral. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. Each Fund could experience delays and costs in gaining access to the collateral and the securities may lose value during the delay which could result in potential losses to each Fund. Some of these losses may be indemnified by the lending agent. Each Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. For Funds that participated in securities lending, dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, are included in Securities lending income on the Statements of Operations. The aggregate value of securities out on loan, if any, is shown on the Statements of Assets and Liabilities. |
L. | Foreign Currency Translations - Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. Each Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statements of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on each Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period-end, resulting from changes in exchange rates. |
Each Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which each Fund invests.
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NOTE 3Investment Advisory Agreement and Other Agreements
The Trust has entered into an Investment Advisory Agreement with the Adviser on behalf of each Fund, pursuant to which the Adviser has overall responsibility for the selection and ongoing monitoring of the Funds investments, managing the Funds business affairs and providing certain clerical, bookkeeping and other administrative services.
Pursuant to the Investment Advisory Agreement, each Fund accrues daily and pays monthly to the Adviser an annual unitary management fee equal to a percentage of its average daily net assets. Out of the unitary management fee, the Adviser has agreed to pay for substantially all expenses of the Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses. The annual unitary management fee paid by each Fund to the Adviser is equal to a percentage of each Funds average daily net assets as follows:
Unitary Management Fees (as a % of average daily net assets) | |||||
PureBetaSM 0-5 Yr US TIPS ETF | 0.07 | % | |||
PureBetaSM FTSE Developed ex-North America ETF | 0.07 | % | |||
PureBetaSM FTSE Emerging Markets ETF | 0.14 | % |
Further, through at least August 31, 2022, the Adviser has contractually agreed to waive a portion of each Funds management fee in an amount equal to 100% of the net advisory fees an affiliate of the Adviser receives that are attributable to the Funds investments of otherwise uninvested cash in money market funds managed by that affiliate (excluding investments of cash collateral from securities lending). There is no guarantee that the Adviser will extend the waiver of these fees past that date.
For the six-month period ended April 30, 2020, the Adviser waived fees for each Fund in the following amounts:
PureBetaSM 0-5 Yr US TIPS ETF | $ | 61 | ||
PureBetaSM FTSE Developed ex-North America ETF | 6 | |||
PureBetaSM FTSE Emerging Markets ETF | 355 |
The Trust has entered into a Distribution Agreement with Invesco Distributors, Inc. (the Distributor), which serves as the distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in the Shares. The Funds are not charged any fees pursuant to the Distribution Agreement. The Distributor is an affiliate of the Adviser.
The Adviser has entered into a licensing agreement for each Fund with the following entities (each, a Licensor):
Fund |
Licensor | |
PureBetaSM 0-5 Yr US TIPS ETF | ICE Data Indices, LLC | |
PureBetaSM FTSE Developed ex-North America ETF | FTSE International Ltd. | |
PureBetaSM FTSE Emerging Markets ETF | FTSE International Ltd. |
Each Underlying Index name trademark is owned by its respective Licensor. These trademarks have been licensed to the Adviser for use by the Funds. Each Fund is entitled to use its Underlying Index pursuant to the Trusts sub-licensing agreement with the Adviser. The Funds are not sponsored, endorsed, sold or promoted by the Licensors, and the Licensors make no representation regarding the advisability of investing in any of the Funds.
The Trust has entered into service agreements whereby The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian, fund accountant and transfer agent for each Fund.
NOTE 4Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
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Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect a Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 2020. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
PureBetaSM 0-5 Yr US TIPS ETF | ||||||||||||||||||||
Investments in Securities | ||||||||||||||||||||
U.S. Treasury Securities |
$ | - | $ | 10,019,047 | $ | - | $ | 10,019,047 | ||||||||||||
Money Market Funds |
729,562 | - | - | 729,562 | ||||||||||||||||
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Total Investments |
$ | 729,562 | $ | 10,019,047 | $ | - | $ | 10,748,609 | ||||||||||||
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PureBetaSM FTSE Developed ex-North America ETF | ||||||||||||||||||||
Investments in Securities | ||||||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 2,056,012 | $ | 2,419 | $ | 0 | $ | 2,058,431 | ||||||||||||
Money Market Funds |
- | 67,615 | - | 67,615 | ||||||||||||||||
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Total Investments |
$ | 2,056,012 | $ | 70,034 | $ | 0 | $ | 2,126,046 | ||||||||||||
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PureBetaSM FTSE Emerging Markets ETF | ||||||||||||||||||||
Investments in Securities | ||||||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 782,795 | $ | 1,110,799 | $ | 0 | $ | 1,893,594 | ||||||||||||
Exchange-Traded Funds |
159,272 | - | - | 159,272 | ||||||||||||||||
Money Market Funds |
- | 18,134 | - | 18,134 | ||||||||||||||||
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Total Investments |
$ | 942,067 | $ | 1,128,933 | $ | 0 | $ | 2,071,000 | ||||||||||||
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NOTE 5Tax Information
The amount and character of income and gains to be distributed are determined in accordance with federal income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under federal income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforwards are calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforwards actually available for the Funds to utilize. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Funds had capital loss carryforwards as of October 31, 2019, as follows:
No expiration | ||||||||||||
Short-Term | Long-Term | Total* | ||||||||||
PureBetaSM 0-5 Yr US TIPS ETF |
$ | 6,727 | $ | 9,793 | $ | 16,520 | ||||||
PureBetaSM FTSE Developed ex-North America ETF |
- | 10,933 | 10,933 | |||||||||
PureBetaSM FTSE Emerging Markets ETF |
7,067 | 47,950 | 55,017 |
* | Capital loss carryforwards are reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 6Investment Transactions
For the six-month period ended April 30, 2020, the cost of securities purchased and proceeds from sales of securities (other than short-term securities, U.S. Treasury obligations, money market funds and in-kind transactions, if any) were as follows:
Purchases | Sales | |||||||
PureBetaSM FTSE Developed ex-North America ETF | $ | 20,429 | $ | 26,087 | ||||
PureBetaSM FTSE Emerging Markets ETF | 196,183 | 201,200 |
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For the six-month period ended April 30, 2020, the cost of securities purchased and proceeds from sales of U.S. Treasury obligations (other than short-term securities, money market funds and in-kind transactions) for the PureBetaSM 0-5 Yr US TIPS ETF amounted to $2,324,820 and $1,690,604, respectively.
For the six-month period ended April 30, 2020, in-kind transactions associated with creations and redemptions for the PureBetaSM 0-5 Yr US TIPS ETF amounted to $3,090,236 and $1,261,098, respectively.
At April 30, 2020, the aggregate cost of investments, including any derivatives, on a tax basis includes adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end:
Gross Unrealized Appreciation |
Gross Unrealized (Depreciation) |
Net Unrealized Appreciation (Depreciation) |
Cost | |||||||||||||||||
PureBetaSM 0-5 Yr US TIPS ETF | $ | 69,696 | $ | (26,126) | $ | 43,570 | $ | 10,705,039 | ||||||||||||
PureBetaSM FTSE Developed ex-North America ETF | 193,301 | (611,282) | (417,981) | 2,544,027 | ||||||||||||||||
PureBetaSM FTSE Emerging Markets ETF | 200,191 | (562,000) | (361,809) | 2,432,809 |
NOTE 7Trustees and Officers Fees
Trustees and Officers Fees include amounts accrued by the Funds to pay remuneration to the Independent Trustees and an Officer of the Trust. The Adviser, as a result of each Funds unitary management fee, pays for such compensation for the Funds. The Trustee who is an interested person of the Trust does not receive any Trustees fees.
The Trust has adopted a deferred compensation plan (the Plan). Under the Plan, each Independent Trustee who has executed a Deferred Fee Agreement (a Participating Trustee) may defer receipt of all or a portion of their compensation (Deferral Fees). Such Deferral Fees are deemed to be invested in select Invesco ETFs. The Deferral Fees payable to a Participating Trustee are valued as of the date such Deferral Fees would have been paid to a Participating Trustee. The value increases with contributions or with increases in the value of the Shares selected, and the value decreases with distributions or with declines in the value of the Shares selected. Obligations under the Plan represent unsecured claims against the general assets of the Funds.
NOTE 8Capital
Shares are issued and redeemed by each Fund only in Creation Units of 50,000 Shares for PureBetaSM 0-5 Yr US TIPS ETF and 100,000 Shares for PureBetaSM FTSE Developed ex-North America ETF and PureBetaSM FTSE Emerging Markets ETF. Only Authorized Participants are permitted to purchase or redeem Creation Units from the Funds. Such transactions are principally permitted in exchange for Deposit Securities, with a balancing cash component to equate the transaction to the NAV per Share of a Fund of the Trust on the transaction date. However, for all Funds, cash in an amount equivalent to the value of certain securities may be substituted, generally when the securities are not available in sufficient quantity for delivery, not eligible for trading by the Authorized Participant or as a result of other market circumstances.
To the extent that the Funds permit transactions in exchange for Deposit Securities, each Fund may issue Shares in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to 105% of the market value of the missing Deposit Securities. In accordance with the Trusts Participant Agreement, Creation Units will be issued to an Authorized Participant, notwithstanding the fact that the corresponding Deposit Securities have not been received in part or in whole, in reliance on the undertaking of the Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking shall be secured by the Authorized Participants delivery and maintenance of collateral consisting of cash in the form of U.S. dollars in immediately available funds having a value (marked-to-market daily) at least equal to 105%, which the Adviser may change from time to time, of the value of the missing Deposit Securities.
Certain transaction fees may be charged by the Funds for creations and redemptions, which are treated as increases in capital.
Transactions in each Funds Shares are disclosed in detail in the Statements of Changes in Net Assets.
NOTE 9Coronavirus (COVID-19) Pandemic
During the first quarter of 2020, the World Health Organization declared COVID-19 to be a public health emergency. COVID-19 has led to increased short-term market volatility and may have adverse long-term effects on U.S. and world economies and markets in general. COVID-19 may adversely impact the value of the Funds investments. Because of the uncertainties on valuation, the global economy and business operations, values reflected in these financial statements may materially differ from the value received upon actual sales of those investments.
The extent of the impact on the performance of the Funds and their investments will depend on future developments, including the duration and spread of the COVID-19 outbreak, related restrictions and advisories, and the effects on the financial markets and economy overall, all of which are highly uncertain and cannot be predicted.
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45 |
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Calculating your ongoing Fund expenses
Example
As a shareholder of a Fund of the Invesco Exchange-Traded Fund Trust II, you incur a unitary management fee. In addition to the unitary management fee, a shareholder may pay distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2019 through April 30, 2020.
In addition to the fees and expenses which the Invesco PureBetaSM FTSE Emerging Markets ETF (the Portfolio) bears directly, the Portfolio indirectly bears a pro rata share of the fees and expenses of the investment companies in which the Portfolio invests. The amount of fees and expenses incurred indirectly by the Portfolio will vary because the investment companies have varied expenses and fee levels and the Portfolio may own different proportions of the investment companies at different times. Estimated investment companies expenses are not expenses that are incurred directly by the Portfolio. They are expenses that are incurred directly by the investment companies and are deducted from the value of the investment companies the Portfolio invests in. The effect of the estimated investment companies expenses that the Portfolio bears indirectly is included in the Portfolios total return.
Actual Expenses
The first line in the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading Expenses Paid During the Six-Month Period to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line in the following table provides information about hypothetical account values and hypothetical expenses based on each Funds actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Funds actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as sales charges and brokerage commissions. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, expenses shown in the table do not include the expenses of the underlying funds, which are borne indirectly by a Fund. If transaction costs and indirect expenses were included, your costs would have been higher.
Beginning Account Value November 1, 2019 |
Ending Account Value April 30, 2020 |
Annualized Expense Ratio Based on the Six-Month Period |
Expenses Paid During the Six-Month Period(1) | |||||||||||||||||
Invesco PureBetaSM 0-5 Yr US TIPS ETF (PBTP) | ||||||||||||||||||||
Actual |
$ | 1,000.00 | $ | 1,012.50 | 0.07 | % | $ | 0.35 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,024.52 | 0.07 | 0.35 | ||||||||||||||||
Invesco PureBetaSM FTSE Developed ex-North America ETF (PBDM) | ||||||||||||||||||||
Actual |
1,000.00 | 862.90 | 0.07 | 0.32 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,024.52 | 0.07 | 0.35 |
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46 |
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Calculating your ongoing Fund expenses(continued)
Beginning Account Value November 1, 2019 |
Ending Account Value April 30, 2020 |
Annualized Expense Ratio Based on the Six-Month Period |
Expenses Paid During the Six-Month Period(1) | |||||||||||||||||
Invesco PureBetaSM FTSE Emerging Markets ETF (PBEE) | ||||||||||||||||||||
Actual |
$ | 1,000.00 | $ | 877.60 | 0.11 | % | $ | 0.51 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,024.32 | 0.11 | 0.55 |
(1) | Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six-month period ended April 30, 2020. Expenses are calculated by multiplying the Funds annualized expense ratio by the average account value for the period, then multiplying the result by 182/366. |
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47 |
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Approval of Investment Advisory and Sub-Advisory Contracts
At a meeting held on April 14, 2020, the Board of Trustees of the Invesco Exchange-Traded Fund Trust II (the Trust), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco Capital Management LLC (the Adviser) and the Trust for the following 71 series (each, a Fund and collectively, the Funds):
Also at the April 14, 2020 meeting, the Board of Trustees of the Trust, including the Independent Trustees, approved the continuation of the Investment Sub-Advisory Agreement between the Adviser and the following seven affiliated sub-advisers for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF (the Sub-Advisory Agreement): Invesco Advisers, Inc.; Invesco Asset Management Deutschland, GmbH; Invesco Asset Management Limited; Invesco Asset Management (Japan) Limited; Invesco Hong Kong Limited; Invesco Senior Secured Management, Inc.; and Invesco Canada Ltd. (each, a Sub-Adviser and collectively, the Sub-Advisers).
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
Investment Advisory Agreement
The Trustees reviewed information from the Adviser describing: (i) the nature, extent and quality of services provided, (ii) the investment performance of each Fund and the Adviser, (iii) the fees paid by the Funds and comparisons to amounts paid by other comparable registered investment companies, (iv) the costs of services provided and estimated profits realized by the Adviser, (v) the extent to which economies of scale may be realized as a Fund grows and whether fee levels reflect any possible economies of scale for the benefit of Fund shareholders, and (vi) any further benefits realized by the Adviser or its affiliates from the Advisers relationship with the Funds.
Nature, Extent and Quality of Services. In evaluating the nature, extent and quality of the Advisers services, the Trustees reviewed information concerning the functions performed by the Adviser for the Funds, information describing the Advisers current organization and staffing, including operational support provided by the Advisers parent organization, Invesco Ltd. (Invesco), and the background and experience of the persons responsible for the day-to-day management of the Funds. The Trustees reviewed matters related to the Advisers execution and/or oversight of execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and their underlying indexes for the one-year, three-year, five-year, ten-year and since-inception periods ended December 31, 2019, as applicable, including reports for each of those periods on the correlation and tracking error between each Funds performance and the performance of its underlying index, as well as the Advisers analysis of the tracking error and correlation between certain Funds and their underlying indexes. In reviewing the tracking error reports, the Trustees considered information provided by Invescos independent performance and risk management group with respect to general expected tracking error ranges. The Trustees also considered that certain Funds were created in connection with the purchases by Invesco of the exchange-traded funds businesses of Guggenheim Capital LLC on April 6, 2018 and Massachusetts Mutual Life Insurance Company (Oppenheimer) on May 24, 2019 (each, a Transaction), and that each such Funds performance prior to the closing of the applicable Transaction is that of its predecessor Guggenheim ETF or Oppenheimer ETF. The Trustees noted that, for each applicable period, the correlation for each Fund, other than the five-year and since-inception periods for Invesco Global Short Term High Yield Bond ETF and the one-year and ten-year periods for Invesco VRDO Tax-Free Weekly ETF, was within the targeted range set forth in the Trusts registration statement. The Trustees reviewed the reasons provided by the Adviser for Invesco Global Short Term High Yield Bond ETFs and Invesco VRDO Tax-Free Weekly ETFs level of correlation to its underlying index, as well as the Advisers expectations for each Funds correlation going forward. The Trustees noted that, for each applicable period, the tracking error for all Funds was within the targeted range set forth in the Trusts registration statement and concluded that each Funds correlation to its underlying index and the tracking error for each Fund were within an acceptable range given that Funds particular circumstances.
The Trustees considered the services provided by the Adviser in its oversight of the Funds administrator, custodian and transfer agent. They noted the significant amount of time, effort and resources that had been devoted to this oversight function.
Based on their review, the Trustees concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Funds net expense ratio and unitary advisory fee. The Trustees noted that the annual advisory fee charged to each Fund, as set forth below, is a unitary advisory fee and that the Adviser pays all other operating expenses of each Fund, including the fees payable to the Sub-Advisers for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF, except that each Fund pays its brokerage expenses, taxes, interest (including, for Invesco Senior Loan ETF, interest expenses associated with its line of credit), litigation expenses and other extraordinary expenses (including acquired fund fees and expenses, if any).
0.04%: | Invesco PureBetaTM MSCI USA ETF | |||
0.05%: | Invesco PureBetaTM US Aggregate Bond ETF | |||
0.06%: | Invesco PureBetaTM MSCI USA Small Cap ETF | |||
0.07%: | Invesco PureBetaTM 0-5 Yr US TIPS ETF, Invesco PureBetaTM FTSE Developed ex-North America ETF | |||
0.08%: | Invesco Treasury Collateral ETF | |||
0.10%: | Invesco S&P 500 Minimum Variance ETF | |||
0.13%: | Invesco S&P 500 Enhanced Value ETF, Invesco S&P 500 Momentum ETF |
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
0.14%: | Invesco PureBetaTM FTSE Emerging Markets ETF | |||
0.20%: | Invesco Russell 1000 Equal Weight ETF | |||
0.22%: | Invesco Fundamental Investment Grade Corporate Bond ETF | |||
0.25%: | Invesco 1-30 Laddered Treasury ETF, Invesco S&P 500® ex-Rate Sensitive Low Volatility ETF, Invesco S&P 500® High Beta ETF, Invesco S&P 500® Low Volatility ETF, Invesco S&P MidCap Low Volatility ETF, Invesco S&P SmallCap Low Volatility ETF, Invesco VRDO Tax-Free Weekly ETF | |||
0.28%: | Invesco California AMT-Free Municipal Bond ETF, Invesco National AMT-Free Municipal Bond ETF, Invesco New York AMT-Free Municipal Bond ETF, Invesco Taxable Municipal Bond ETF | |||
0.29%: | Invesco Russell 1000 Enhanced Equal Weight ETF, Invesco S&P International Developed Quality ETF, Invesco S&P SmallCap Consumer Discretionary ETF, Invesco S&P SmallCap Consumer Staples ETF, Invesco S&P SmallCap Energy ETF, Invesco S&P SmallCap Financials ETF, Invesco S&P SmallCap Health Care ETF, Invesco S&P SmallCap Industrials ETF, Invesco S&P SmallCap Information Technology ETF, Invesco S&P SmallCap Materials ETF, Invesco S&P SmallCap Quality ETF, Invesco S&P SmallCap Utilities & Communication Services ETF | |||
0.30%: | Invesco S&P 500® High Dividend Low Volatility ETF, Invesco S&P International Developed High Dividend Low Volatility ETF, Invesco S&P SmallCap High Dividend Low Volatility ETF | |||
0.35%: | Invesco Global Short Term High Yield Bond ETF, Invesco KBW Bank ETF, Invesco KBW High Dividend Yield Financial ETF, Invesco KBW Premium Yield Equity REIT ETF, Invesco KBW Property & Casualty Insurance ETF, Invesco KBW Regional Banking ETF, Invesco Russell 1000 Low Beta Equal Weight ETF, Invesco S&P International Developed Low Volatility ETF, Invesco S&P International Developed Momentum ETF | |||
0.39%: | Invesco S&P 500 Revenue ETF, Invesco S&P MidCap 400 Revenue ETF, Invesco S&P SmallCap 600 Revenue ETF, Invesco S&P Ultra Dividend Revenue ETF | |||
0.45%: | Invesco FTSE International Low Beta Equal Weight ETF, Invesco FTSE RAFI Developed Markets ex-U.S. ETF, Invesco S&P Emerging Markets Low Volatility ETF, Invesco S&P Emerging Markets Momentum ETF | |||
0.49%: | Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF, Invesco FTSE RAFI Emerging Markets ETF | |||
0.50%: | Invesco CEF Income Composite ETF, Invesco Emerging Markets Sovereign Debt ETF, Invesco Fundamental High Yield® Corporate Bond ETF, Invesco International Corporate Bond ETF, Invesco Preferred ETF, Invesco Variable Rate Preferred ETF | |||
0.55%: | Invesco International BuyBack AchieversTM ETF | |||
0.60%: | Invesco DWA SmallCap Momentum ETF | |||
0.65%: | Invesco Senior Loan ETF | |||
0.70%: | Invesco China Technology ETF | |||
0.75%: | Invesco Global Clean Energy ETF, Invesco Global Water ETF | |||
0.80%: | Invesco DWA Developed Markets Momentum ETF | |||
0.90%: | Invesco DWA Emerging Markets Momentum ETF |
The Trustees considered that, effective May 1, 2020, the Adviser had agreed to reduce the unitary advisory fee for Invesco S&P Emerging Markets Low Volatility ETF and Invesco S&P Emerging Markets Momentum ETF from 0.45% to 0.29% of average daily net assets, and to reduce the unitary advisory fee for Invesco S&P International Developed Low Volatility ETF and Invesco S&P International Developed Momentum ETF from 0.35% to 0.25% of average daily net assets.
The Trustees compared each Funds net expense ratio to information compiled by the Adviser from Lipper Inc. databases on the net expense ratios of comparable exchange-traded funds (ETFs), open-end (non-ETF) index funds and open-end (non-ETF) actively-managed funds, as applicable. The Trustees noted that the net expense ratios for certain Funds were equal to or lower than the median net expense ratios of their ETF and open-end index peer funds as illustrated in the table below. The Trustees also noted that the net
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50 |
|
Approval of Investment Advisory and Sub-Advisory Contracts (continued)
expense ratios for all of the Funds were lower than the median net expense ratios of their open-end actively-managed peer funds. The Trustees noted that a portion of each Funds operating expenses was attributable to a sub-license fee payable out of the unitary advisory fee charged to that Fund.
Invesco Fund |
Equal to/Lower than ETF Peer Median |
Equal to/Lower than Open-End Index Fund Peer Median* |
Lower than Open-End Active Fund Peer Median | |||
Invesco 1-30 Laddered Treasury ETF | X | |||||
Invesco California AMT-Free Municipal Bond ETF | N/A | X | ||||
Invesco CEF Income Composite ETF | X | N/A | X | |||
Invesco China Technology ETF | N/A | X | ||||
Invesco DWA Developed Markets Momentum ETF | X | |||||
Invesco DWA Emerging Markets Momentum ETF | X | |||||
Invesco DWA SmallCap Momentum ETF | X | |||||
Invesco Emerging Markets Sovereign Debt ETF | X | |||||
Invesco FTSE International Low Beta Equal Weight ETF | X | X | X | |||
Invesco FTSE RAFI Developed Markets ex-U.S. ETF | X | X | ||||
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF | X | X | X | |||
Invesco FTSE RAFI Emerging Markets ETF | X | X | ||||
Invesco Fundamental High Yield® Corporate Bond ETF | X | X | ||||
Invesco Fundamental Investment Grade Corporate Bond ETF | X | |||||
Invesco Global Clean Energy ETF | N/A | X | ||||
Invesco Global Short Term High Yield Bond ETF | X | N/A | X | |||
Invesco Global Water ETF | N/A | X | ||||
Invesco International BuyBack AchieversTM ETF | X | X | X | |||
Invesco International Corporate Bond ETF | X | |||||
Invesco KBW Bank ETF | X | X | ||||
Invesco KBW High Dividend Yield Financial ETF | X | X | ||||
Invesco KBW Premium Yield Equity REIT ETF | X | X | ||||
Invesco KBW Property & Casualty Insurance ETF | X | X | ||||
Invesco KBW Regional Banking ETF | X | X | ||||
Invesco National AMT-Free Municipal Bond ETF | X | |||||
Invesco New York AMT-Free Municipal Bond ETF | N/A | X | ||||
Invesco Preferred ETF | N/A | X | ||||
Invesco PureBetaTM 0-5 Yr US TIPS ETF | X | |||||
Invesco PureBetaTM FTSE Developed ex-North America ETF | X | |||||
Invesco PureBetaTM FTSE Emerging Markets ETF | X | X | ||||
Invesco PureBetaTM MSCI USA ETF | X | X | X | |||
Invesco PureBetaTM MSCI USA Small Cap ETF | X | X | X | |||
Invesco PureBetaTM US Aggregate Bond ETF | X | X | X | |||
Invesco Russell 1000 Enhanced Equal Weight ETF | X | X | X | |||
Invesco Russell 1000 Equal Weight ETF | X | X | X | |||
Invesco Russell 1000 Low Beta Equal Weight ETF | X | X | ||||
Invesco S&P 500 Enhanced Value ETF | X | X | X | |||
Invesco S&P 500® ex-Rate Sensitive Low Volatility ETF | X | X | X | |||
Invesco S&P 500 High Beta ETF | X | X | X |
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51 |
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
Invesco Fund |
Equal to/Lower than ETF Peer Median |
Equal to/Lower than Open-End Index Fund Peer Median* |
Lower than Open-End Active Fund Peer Median | |||
Invesco S&P 500® High Dividend Low Volatility ETF | X | X | X | |||
Invesco S&P 500® Low Volatility ETF | X | X | ||||
Invesco S&P 500 Minimum Variance ETF | X | X | X | |||
Invesco S&P 500 Momentum ETF | X | X | ||||
Invesco S&P 500 Revenue ETF | X | X | ||||
Invesco S&P Emerging Markets Low Volatility ETF | X | X | X | |||
Invesco S&P Emerging Markets Momentum ETF | X | X | ||||
Invesco S&P International Developed High Dividend Low Volatility ETF | X | X | ||||
Invesco S&P International Developed Low Volatility ETF | X | X | ||||
Invesco S&P International Developed Momentum ETF | X | |||||
Invesco S&P International Developed Quality ETF | X | X | ||||
Invesco S&P MidCap 400 Revenue ETF | X | |||||
Invesco S&P MidCap Low Volatility ETF | X | |||||
Invesco S&P SmallCap 600 Revenue ETF | X | X | ||||
Invesco S&P SmallCap Consumer Discretionary ETF | X | X | ||||
Invesco S&P SmallCap Consumer Staples ETF | X | X | ||||
Invesco S&P SmallCap Energy ETF | X | X | ||||
Invesco S&P SmallCap Financials ETF | X | X | ||||
Invesco S&P SmallCap Health Care ETF | X | X | ||||
Invesco S&P SmallCap High Dividend Low Volatility ETF | X | X | X | |||
Invesco S&P SmallCap Industrials ETF | X | X | ||||
Invesco S&P SmallCap Information Technology ETF | X | X | X | |||
Invesco S&P SmallCap Low Volatility ETF | X | X | X | |||
Invesco S&P SmallCap Materials ETF | X | X | ||||
Invesco S&P SmallCap Quality ETF | X | X | ||||
Invesco S&P SmallCap Utilities & Communication Services ETF | X | X | X | |||
Invesco S&P Ultra Dividend Revenue ETF | X | X | ||||
Invesco Senior Loan ETF | X | X | ||||
Invesco Taxable Municipal Bond ETF | N/A | X | ||||
Invesco Treasury Collateral ETF | X | X | ||||
Invesco Variable Rate Preferred ETF | X | X | ||||
Invesco VRDO Tax-Free Weekly ETF | N/A | X |
* | The information provided by the Adviser indicated that certain Funds did not have any comparable open-end index fund peers. Those Funds have been designated in this column with an N/A for not available. |
In response to questions from the Independent Trustees, the Adviser provided supplemental information regarding each of Invesco 1-30 Laddered Treasury ETF, Invesco California AMT-Free Municipal Bond ETF, Invesco DWA Developed Markets Momentum ETF, Invesco Emerging Markets Sovereign Debt ETF, Invesco Global Clean Energy ETF, Invesco Global Water ETF, Invesco International Corporate Bond ETF, Invesco National AMT-Free Municipal Bond ETF, Invesco New York AMT-Free Municipal Bond ETF, Invesco Senior Loan ETF and Invesco VRDO Tax-Free Weekly ETFs advisory fees and total expenses and the Lipper peer data. The Adviser explained its view that the advisory fees and total expenses for these Funds are competitive and generally in line with other comparable funds in the marketplace, particularly in light of the level and nature of services provided and the investment management style of the Adviser. The Trustees also considered the Advisers statements regarding its pricing philosophy and the differing pricing philosophy of certain of the peers.
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52 |
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
The Trustees noted information, including fee information, provided by the Adviser regarding other investment products to which it provides investment advisory services, including products that have investment strategies comparable to certain of the Funds. The Trustees considered the Advisers explanation of the differences between the services provided to the Funds and to the other investment products it advises, noting the Advisers statement that the management and oversight of the Funds requires substantially more labor and expense.
Based on all the information provided, the Board concluded that each Funds unitary advisory fee was reasonable and appropriate in light of the services provided, the nature of the indexes, the distinguishing factors of the Funds, and the administrative, operational and management oversight costs for the Adviser.
In conjunction with their review of the unitary advisory fees, the Trustees considered information provided by the Adviser on the revenues received by the Adviser under the Investment Advisory Agreement for the Funds. The Trustees reviewed information provided by the Adviser on its overall profitability, as well as the estimated profitability to the Adviser from its relationship to each Fund. The Trustees concluded that the overall and estimated profitability to the Adviser was not unreasonable.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. The Trustees reviewed the information provided by the Adviser as to the extent to which economies of scale may be realized as each Fund grows and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees reviewed each Funds asset size and unitary advisory fee. The Trustees noted that any reduction in fixed costs associated with the management of the Funds would be enjoyed by the Adviser, but a unitary advisory fee provides a level of certainty in expenses for the Funds. The Trustees considered whether the unitary advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund, and concluded that the unitary advisory fee was reasonable and appropriate.
Fall-out Benefits. The Trustees considered that the Adviser identified no additional benefits it receives from its relationship with the Funds, and noted that the Adviser does not have any soft-dollar arrangements. The Trustees also considered benefits received by affiliates of the Adviser that may be directly or indirectly attributed to the Advisers relationship with the Funds, including brokerage fees and advisory fees for money market cash management vehicles. The Board concluded that the advisory fee was reasonable, taking into account any ancillary benefits received by affiliates of the Adviser.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Investment Advisory Agreement for each Fund. No single factor was determinative in the Boards analysis.
Investment Sub-Advisory Agreement
As noted above, the Board of Trustees of the Trust, including the Independent Trustees, approved the continuation of the Sub-Advisory Agreement for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF at a meeting held on April 14, 2020. The review process followed by the Board is described in detail above. In connection with the review of the Sub-Advisory Agreement, the Board considered the factors described below, among others.
Nature, Extent and Quality of Services. The Trustees considered the nature, extent and quality of services provided under the Sub-Advisory Agreement. The Board reviewed the qualifications and background of each Sub-Adviser, the services provided or to be provided by each Sub-Adviser, the investment approach of the Sub-Adviser whose investment personnel manage Invesco Senior Loan ETFs and Invesco Treasury Collateral ETFs assets, the experience and skills of the investment personnel responsible for the day-to-day management of the Funds, and the resources made available to such personnel.
Based on their review, the Trustees concluded that the nature, extent and quality of services provided by the Sub-Advisers to Invesco Senior Loan ETF and Invesco Treasury Collateral ETF under the Sub-Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser and the Sub-Advisers on the sub-advisory fee rates under the Sub-Advisory Agreement. The Trustees noted that the sub-advisory fees charged by the Sub-Advisers under the Sub-Advisory Agreement are consistent with the compensation structure used throughout Invesco when Invescos affiliates provide sub-advisory services for funds managed by other Invesco affiliates. The Board considered how the sub-advisory fees relate to the overall advisory fee for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF and noted that the Adviser compensates the Sub-Advisers from its fee.
|
53 |
|
Approval of Investment Advisory and Sub-Advisory Contracts (continued)
The Trustees also reviewed the financial statements provided by Invesco Senior Secured Management, Inc., in connection with the March 12, 2020 Board meeting, and Invesco Advisers, Inc., in connection with the April 14, 2020 meeting, and noted the net income generated by each firm. The Trustees noted that the Adviser compensates the Sub-Advisers from its fee and that the Adviser provided profitability information with respect to Invesco Senior Loan ETF and Invesco Treasury Collateral ETF.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. As part of their review of the Investment Advisory Agreement for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF, the Trustees considered the extent to which economies of scale may be realized as the Funds grow and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees considered whether the sub-advisory fee rates for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF were reasonable in relation to the asset size of the Funds, and concluded that the flat sub-advisory fee rates were reasonable and appropriate.
Fall-out Benefits. The Trustees noted that Invesco Advisers, Inc. receives management fees from money market funds into which the Funds and other Invesco ETFs excess cash and securities lending collateral may be invested, and that the Adviser waives its fees on the excess cash invested under such arrangement in amounts equal to fees received by Invesco Advisers, Inc. on the Funds and other Invesco ETFs excess cash invested in the money market funds. The Trustees noted that the Sub-Advisers had not identified any further benefits that they derived from their relationships with Invesco Senior Loan ETF and Invesco Treasury Collateral ETF and that the Sub-Advisers do not have any soft-dollar arrangements with respect to the Funds. The Board concluded that the sub-advisory fee with respect to each Fund was reasonable, taking into account any ancillary benefits received by the Sub-Advisers.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Sub-Advisory Agreement for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF. No single factor was determinative in the Boards analysis.
|
54 |
|
Proxy Voting Policies and Procedures
A description of the Trusts proxy voting policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available, without charge and upon request, by calling (800) 983-0903. This information is also available on the Securities and Exchange Commissions (the Commission) website at www.sec.gov.
Information regarding how each Fund voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, is available, without charge and upon request, by (i) calling (800) 983-0903; or (ii) accessing the Trusts Form N-PX on the Commissions website at www.sec.gov.
Quarterly Portfolios
The Trust files its complete schedule of portfolio holdings for the Funds with the Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Forms N-PORT are available on the Commissions website at www.sec.gov.
Frequency Distribution of Discounts and Premiums
A table showing the number of days the market price of each Funds shares was greater than the Funds net asset value, and the number of days it was less than the Funds net asset value (i.e., premium or discount) for the most recently completed calendar year, and the calendar quarters since that year end (or the life of the Fund, if shorter) may be found at the Funds website at www.invesco.com/ETFs.
©2020 Invesco Capital Management LLC 3500 Lacey Road, Suite 700 Downers Grove, IL 60515 |
P-PBETA-SAR-1 | invesco.com/ETFs |
Invesco Semi-Annual Report to Shareholders
April 30, 2020
| ||||
IDLB | Invesco FTSE International Low Beta Equal Weight ETF | |||
EELV | Invesco S&P Emerging Markets Low Volatility ETF | |||
EEMO | Invesco S&P Emerging Markets Momentum ETF | |||
IDHD | Invesco S&P International Developed High Dividend Low Volatility ETF | |||
IDLV | Invesco S&P International Developed Low Volatility ETF | |||
IDMO | Invesco S&P International Developed Momentum ETF |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you hold accounts through a financial intermediary, you may contact your financial intermediary to enroll in electronic delivery. Please note that not all financial intermediaries may offer this service.
You may elect to receive all future reports in paper free of charge. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds held with your financial intermediary.
|
2 |
|
Liquidity Risk Management Program
The Securities and Exchange Commission (SEC) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the Liquidity Rule) in order to promote effective liquidity risk management throughout the open-end investment company industry, thereby reducing the risk that funds will be unable to meet their redemption obligations and mitigating dilution of the interests of fund shareholders. The Funds have adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the Program). The Program is reasonably designed to assess and manage the Funds liquidity risk, which is the risk that the Funds could not meet redemption requests without significant dilution of remaining investors interests in the Funds. The Board of Trustees of the Funds (the Board) has appointed Invesco Capital Management LLC (Invesco), the Funds investment adviser, as the Programs administrator, and Invesco has delegated oversight of the Program to the Liquidity Risk Management Committee (the Committee), which is composed of senior representatives from relevant business groups at Invesco and its affiliates.
As required by the Liquidity Rule, the Program includes policies and procedures providing for an assessment, no less frequently than annually, of the Funds liquidity risk that takes into account, as relevant to the Funds liquidity risk: (1) each Funds investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Funds during both normal and reasonably foreseeable stressed conditions; (3) each Funds holdings of cash and cash equivalents and any borrowing arrangements; (4) the relationship between the Funds portfolio liquidity and the way in which, and the prices and spreads at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants; and (5) the effect of the composition of baskets on the overall liquidity of each Funds portfolio. The Liquidity Rule also requires the classification of each Funds investments into categories that reflect the assessment of their relative liquidity under current market conditions. Each Fund classifies its investments into one of four categories defined in the Liquidity Rule: Highly Liquid, Moderately Liquid, Less Liquid and Illiquid. Funds that are not invested primarily in Highly Liquid Investments that are assets (cash or investments that are reasonably expected to be convertible into cash within three business days without significantly changing the market value of the investment) are required to establish a Highly Liquid Investment Minimum (HLIM), which is the minimum percentage of net assets that must be invested in Highly Liquid Investments. Funds with HLIMs have procedures for addressing HLIM shortfalls, including reporting to the Board and the SEC (on a non-public basis) as required by the Program and the Liquidity Rule. In addition, a Fund may not acquire an investment if, immediately after the acquisition, over 15% of such Funds net assets would consist of Illiquid Investments that are assets (an investment that cannot reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment). The Liquidity Rule and the Program also require reporting to the Board and the SEC (on a non-public basis) if a Funds holdings of Illiquid Investments exceed 15% of such Funds assets.
At a meeting held on March 12, 2020, the Committee presented a report to the Board that addressed the operation of the Program and assessed the Programs adequacy and effectiveness of implementation (the Report). The Report covered the period from December 1, 2018 through December 31, 2019 (the Program Reporting Period).
The Report stated, in relevant part, that during the Program Reporting Period:
| The Program, as adopted and implemented, remained reasonably designed to assess and manage the Funds liquidity risk and was operated effectively to achieve that goal; |
| Each Funds investment strategy remained appropriate for an open-end fund; |
| Each Fund was able to meet requests for redemption without significant dilution of remaining investors interests in the Fund; |
| The Funds did not breach the 15% limit on Illiquid Investments; and |
| The Funds primarily held Highly Liquid Investments and therefore have not adopted an HLIM. |
|
3 |
|
Invesco FTSE International Low Beta Equal Weight ETF (IDLB)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 | ||||
|
| |||
Invesco FTSE International Low Beta Equal Weight ETF (IDLB)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 | ||||
|
| |||
Invesco FTSE International Low Beta Equal Weight ETF (IDLB)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 | ||||
|
| |||
Invesco FTSE International Low Beta Equal Weight ETF (IDLB)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 | ||||
|
| |||
Invesco FTSE International Low Beta Equal Weight ETF (IDLB)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 | ||||
|
| |||
Invesco FTSE International Low Beta Equal Weight ETF (IDLB)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 | ||||
|
| |||
Invesco FTSE International Low Beta Equal Weight ETF (IDLB)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 | ||||
|
| |||
Invesco FTSE International Low Beta Equal Weight ETF (IDLB)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
BR-Bearer Shares
CDI-CREST Depository Interest
CVA-Dutch Certificates
FDR-Fiduciary Depositary Receipt
PC-Participation Certificate
Pfd.-Preferred
REIT-Real Estate Investment Trust
RSP-Registered Savings Plan Shares
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | All or a portion of this security was out on loan at April 30, 2020. |
(c) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $431,592, which represented 2.59% of the Funds Net Assets. |
(d) | Security valued using significant unobservable inputs (Level 3). See Note 4. |
(e) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(f) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2J. |
(g) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* | $ | - | $ | 468,988 | $ | (468,988) | $ | - | $ | - | $ | - | $ | 122 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 | ||||
|
| |||
Invesco FTSE International Low Beta Equal Weight ETF (IDLB)(continued)
April 30, 2020
(Unaudited)
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | $ | 614,148 | $ | 3,888,844 | $ | (4,502,992 | ) | $ | - | $ | - | $ | - | $ | 4,268 | ||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 205,544 | 1,159,417 | (1,364,871 | ) | (14 | ) | (76 | ) | - | 1,624 | |||||||||||||||||||||||||
Invesco Private Government Fund | - | 970,397 | (526,051 | ) | - | - | 444,346 | - | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total | $ | 819,692 | $ | 6,487,646 | $ | (6,862,902 | ) | $ | (14 | ) | $ | (76 | ) | $ | 444,346 | $ | 6,014 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
Portfolio Composition
Sector Breakdown (% of the Funds Net Assets)
as of April 30, 2020
Industrials |
15.32 | |||||
Consumer Staples |
14.99 | |||||
Financials |
13.68 | |||||
Consumer Discretionary |
9.70 | |||||
Communication Services |
8.39 | |||||
Materials |
7.60 | |||||
Real Estate |
7.31 | |||||
Health Care |
7.17 | |||||
Utilities |
7.01 | |||||
Information Technology |
6.14 | |||||
Energy |
1.84 | |||||
Money Market Funds Plus Other Assets Less Liabilities | 0.85 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 | ||||
|
| |||
Invesco S&P Emerging Markets Low Volatility ETF (EELV)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 | ||||
|
| |||
Invesco S&P Emerging Markets Low Volatility ETF (EELV)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 | ||||
|
| |||
Invesco S&P Emerging Markets Low Volatility ETF (EELV)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
ADR-American Depositary Receipt
CPO-Certificates of Ordinary Participation
ETF-Exchange-Traded Fund
NVDR-Non-Voting Depositary Receipt
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $3,996,565, which represented 1.87% of the Funds Net Assets. |
(c) | Security valued using significant unobservable inputs (Level 3). See Note 4. |
(d) | All or a portion of this security was out on loan at April 30, 2020. |
(e) | Each CPO for Fomento Economico Mexicano, S.A.B. de C.V. represents one Series B share and four Series D shares. |
(f) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(g) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2J. |
(h) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | $233,150 | $ | 3,767,571 | $ | (4,000,721 | ) | $- | $ | - | $ | - | $2,380 | |||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 78,343 | 1,286,667 | (1,364,888 | ) | - | (122 | ) | - | 1,005 | ||||||||||||||||||||||||||
Invesco Private Government Fund | - | 1,914,631 | (949,380 | ) | - | - | 965,251 | 1 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total | $311,493 | $ | 6,968,869 | $ | (6,314,989 | ) | $- | $ | (122 | ) | $ | 965,251 | $3,386 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 | ||||
|
| |||
Invesco S&P Emerging Markets Low Volatility ETF (EELV)(continued)
April 30, 2020
(Unaudited)
Portfolio Composition
Sector Breakdown (% of the Funds Net Assets)
as of April 30, 2020
Financials |
31.29 | |||||
Information Technology |
12.06 | |||||
Industrials |
11.87 | |||||
Consumer Staples |
11.85 | |||||
Communication Services |
8.06 | |||||
Materials |
7.15 | |||||
Utilities |
4.81 | |||||
Health Care |
4.20 | |||||
Consumer Discretionary |
3.23 | |||||
Energy |
3.22 | |||||
Real Estate |
2.24 | |||||
Money Market Funds Plus Other Assets Less Liabilities | 0.02 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 | ||||
|
| |||
Invesco S&P Emerging Markets Momentum ETF (EEMO)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 | ||||
|
| |||
Invesco S&P Emerging Markets Momentum ETF (EEMO)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
18 | ||||
|
| |||
Invesco S&P Emerging Markets Momentum ETF (EEMO)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
19 | ||||
|
| |||
Invesco S&P Emerging Markets Momentum ETF (EEMO)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $221,521, which represented 3.99% of the Funds Net Assets. |
(c) | All or a portion of this security was out on loan at April 30, 2020. |
(d) | Security valued using significant unobservable inputs (Level 3). See Note 4. |
(e) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(f) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2J. |
(g) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* | $ | 8,384 | $ | 628,109 | $ | (636,493 | ) | $ | - | $ | - | $ | - | $ | 117 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 154,759 | 1,176,827 | (1,331,586 | ) | - | - | - | 268 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 51,586 | 372,014 | (423,589 | ) | (5 | ) | (6 | ) | - | 101 | |||||||||||||||||||||||||
Invesco Private Government Fund | - | 40,517 | (19,868 | ) | - | - | 20,649 | - | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total | $ | 214,729 | $ | 2,217,467 | $ | (2,411,536 | ) | $ | (5 | ) | $ | (6 | ) | $ | 20,649 | $ | 486 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
Portfolio Composition
Sector Breakdown (% of the Funds Net Assets)
as of April 30, 2020
Information Technology |
27.63 | |||||
Financials |
21.08 | |||||
Consumer Discretionary |
14.00 | |||||
Materials |
8.41 | |||||
Communication Services |
8.29 | |||||
Consumer Staples |
5.72 | |||||
Health Care |
4.28 | |||||
Industrials |
3.32 | |||||
Energy |
3.06 | |||||
Sector Types Each Less Than 3% |
4.13 | |||||
Money Market Funds Plus Other Assets Less Liabilities | 0.08 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
20 | ||||
|
| |||
Invesco S&P International Developed High Dividend Low Volatility ETF (IDHD)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
21 | ||||
|
| |||
Invesco S&P International Developed High Dividend Low Volatility ETF (IDHD)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
REIT-Real Estate Investment Trust
Notes to Schedule of Investments:
(a) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The value of this security at April 30, 2020 represented less than 1% of the Funds Net Assets. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation |
Realized Gain |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* | $ | - | $ | 456,841 | $ | (456,841 | ) | $ | - | $ | - | $ | - | $ | 137 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 10,160 | 2,121,550 | (2,131,710 | ) | - | - | - | 788 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 3,536 | 522,755 | (526,347 | ) | - | 56 | - | 287 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total |
$ | 13,696 | $ | 3,101,146 | $ | (3,114,898 | ) | $ | - | $ | 56 | $ | - | $ | 1,212 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
22 | ||||
|
| |||
Invesco S&P International Developed High Dividend Low Volatility ETF (IDHD)(continued)
April 30, 2020
(Unaudited)
Portfolio Composition
Sector Breakdown (% of the Funds Net Assets)
as of April 30, 2020
Financials |
24.03 | |||||
Utilities |
21.93 | |||||
Real Estate |
16.44 | |||||
Communication Services |
13.35 | |||||
Industrials |
6.74 | |||||
Energy |
5.34 | |||||
Consumer Discretionary |
4.36 | |||||
Consumer Staples |
3.65 | |||||
Sector Types Each Less Than 3% |
3.86 | |||||
Other Assets Less Liabilities |
0.30 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
23 | ||||
|
| |||
Invesco S&P International Developed Low Volatility ETF (IDLV)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
24 | ||||
|
| |||
Invesco S&P International Developed Low Volatility ETF (IDLV)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
25 | ||||
|
| |||
Invesco S&P International Developed Low Volatility ETF (IDLV)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
PC-Participation Certificate
REIT-Real Estate Investment Trust
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The value of this security at April 30, 2020 represented less than 1% of the Funds Net Assets. |
(c) | All or a portion of this security was out on loan at April 30, 2020. |
(d) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2J. |
(f) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | $ | 23,606,275 | $ | 199,343,992 | $ | (222,950,267 | ) | $ | - | $ | - | $ | - | $ | 154,060 | ||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 7,868,758 | 45,449,103 | (53,314,324 | ) | (313 | ) | (3,224 | ) | - | 58,330 | |||||||||||||||||||||||||
Invesco Private Government Fund | - | 30,586,555 | (17,193,438 | ) | - | - | 13,393,117 | 8 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total |
$ | 31,475,033 | $ | 275,379,650 | $ | (293,458,029 | ) | $ | (313 | ) | $ | (3,224 | ) | $ | 13,393,117 | $ | 212,398 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
26 | ||||
|
| |||
Invesco S&P International Developed Low Volatility ETF (IDLV)(continued)
April 30, 2020
(Unaudited)
Portfolio Composition
Sector Breakdown (% of the Funds Net Assets)
as of April 30, 2020
Industrials |
21.61 | |||||
Consumer Staples |
18.52 | |||||
Financials |
15.18 | |||||
Utilities |
9.90 | |||||
Communication Services |
8.27 | |||||
Real Estate |
7.60 | |||||
Consumer Discretionary |
6.15 | |||||
Health Care |
5.65 | |||||
Materials |
4.45 | |||||
Information Technology |
2.37 | |||||
Money Market Funds Plus Other Assets |
||||||
Less Liabilities |
0.30 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
27 | ||||
|
| |||
Invesco S&P International Developed Momentum ETF (IDMO)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
28 | ||||
|
| |||
Invesco S&P International Developed Momentum ETF (IDMO)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
29 | ||||
|
| |||
Invesco S&P International Developed Momentum ETF (IDMO)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
30 | ||||
|
| |||
Invesco S&P International Developed Momentum ETF (IDMO)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | All or a portion of this security was out on loan at April 30, 2020. |
(c) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $48,203, which represented 1.93% of the Funds Net Assets. |
(d) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2J. |
(f) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | $ | 7,660 | $ | 216,817 | $ | (224,477 | ) | $ | - | $ | - | $ | - | $ | 130 | ||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 2,541 | 45,000 | (47,535 | ) | - | (6 | ) | - | 48 | ||||||||||||||||||||||||||
Invesco Private Government Fund | - | 168,548 | (65,770 | ) | - | - | 102,778 | - | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total | $ | 10,201 | $ | 430,365 | $ | (337,782 | ) | $ | - | $ | (6 | ) | $ | 102,778 | $ | 178 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
Portfolio Composition
Sector Breakdown (% of the Funds Net Assets)
as of April 30, 2020
Health Care |
21.29 | |||||
Industrials |
13.38 | |||||
Information Technology |
12.29 | |||||
Financials |
10.86 | |||||
Utilities |
10.36 | |||||
Consumer Staples |
9.75 | |||||
Materials |
7.98 | |||||
Consumer Discretionary |
5.78 | |||||
Real Estate |
3.35 | |||||
Communication Services |
3.08 | |||||
Energy |
1.66 | |||||
Money Market Funds Plus Other Assets Less Liabilities | 0.22 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
31 | ||||
|
| |||
Statements of Assets and Liabilities
April 30, 2020
(Unaudited)
Invesco FTSE International Low Beta Equal Weight ETF (IDLB) |
Invesco S&P Emerging Markets Low Volatility ETF (EELV) |
Invesco S&P Emerging Markets Momentum ETF (EEMO) |
Invesco S&P International Developed High Dividend Low Volatility ETF (IDHD) | |||||||||||||||||
Assets: | ||||||||||||||||||||
Unaffiliated investments in securities, at value(a) |
$ | 16,517,389 | $ | 214,055,900 | $ | 5,551,244 | $ | 13,137,933 | ||||||||||||
Affiliated investments in securities, at value |
444,346 | 965,251 | 20,649 | - | ||||||||||||||||
Foreign currencies, at value |
- | 80,954 | 13,472 | 149 | ||||||||||||||||
Deposits with brokers: |
||||||||||||||||||||
Cash segregated as collateral |
- | 5,954,664 | - | - | ||||||||||||||||
Receivable for: |
||||||||||||||||||||
Dividends |
114,982 | 525,065 | 9,466 | 44,600 | ||||||||||||||||
Securities lending |
784 | 2,320 | 44 | 267 | ||||||||||||||||
Investments sold |
1,270,322 | 6,710,498 | 64,124 | - | ||||||||||||||||
Fund shares sold |
- | 11,558 | - | 342,065 | ||||||||||||||||
Foreign tax reclaims |
182,339 | 41,715 | - | 11,525 | ||||||||||||||||
Other assets |
- | 13,359 | - | - | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total assets |
18,530,162 | 228,361,284 | 5,658,999 | 13,536,539 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Liabilities: | ||||||||||||||||||||
Due to custodian |
375,871 | 1,571,154 | 80,749 | 14,471 | ||||||||||||||||
Due to foreign custodian |
2,583 | - | - | - | ||||||||||||||||
Payable for: |
||||||||||||||||||||
Investments purchased |
46 | 11,716 | 75 | 342,065 | ||||||||||||||||
Collateral upon return of securities loaned |
444,346 | 965,251 | 20,649 | - | ||||||||||||||||
Collateral upon receipt of securities in-kind |
- | 5,954,664 | - | - | ||||||||||||||||
Fund shares repurchased |
1,040,737 | 5,671,108 | - | - | ||||||||||||||||
Accrued unitary management fees |
7,544 | 78,122 | 1,475 | 2,842 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities |
1,871,127 | 14,252,015 | 102,948 | 359,378 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net Assets | $ | 16,659,035 | $ | 214,109,269 | $ | 5,556,051 | $ | 13,177,161 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net assets consist of: | ||||||||||||||||||||
Shares of beneficial interest |
$ | 34,958,732 | $ | 359,614,843 | $ | 7,824,857 | $ | 16,902,868 | ||||||||||||
Distributable earnings (loss) |
(18,299,697 | ) | (145,505,574 | ) | (2,268,806 | ) | (3,725,707 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net Assets | $ | 16,659,035 | $ | 214,109,269 | $ | 5,556,051 | $ | 13,177,161 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) |
700,001 | 11,300,000 | 450,000 | 600,001 | ||||||||||||||||
Net asset value |
$ | 23.80 | $ | 18.95 | $ | 12.35 | $ | 21.96 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Market price |
$ | 23.57 | $ | 18.67 | $ | 12.25 | $ | 21.88 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Unaffiliated investments in securities, at cost |
$ | 18,590,056 | $ | 227,438,736 | $ | 5,357,630 | $ | 15,922,258 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Affiliated investments in securities, at cost |
$ | 444,346 | $ | 965,251 | $ | 20,649 | $ | - | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Foreign currencies (due to foreign custodian), at cost |
$ | (2,577 | ) | $ | 79,626 | $ | 13,461 | $ | 147 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
(a) Includes securities on loan with an aggregate value of: |
$ | 395,863 | $ | 920,975 | $ | 19,890 | $ | - | ||||||||||||
|
|
|
|
|
|
|
|
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
32 | ||||
|
| |||
Invesco S&P International Developed Low Volatility ETF (IDLV) |
Invesco S&P International Developed Momentum ETF (IDMO) | |||||||
$ | 808,198,684 | $ | 2,495,874 | |||||
13,393,117 | 102,778 | |||||||
2,080,889 | 2,919 | |||||||
- | - | |||||||
2,748,054 | 3,520 | |||||||
22,883 | 13 | |||||||
16,597,965 | 6,842 | |||||||
- | - | |||||||
1,192,405 | 3,872 | |||||||
- | - | |||||||
|
|
|
|
|||||
844,233,997 | 2,615,818 | |||||||
|
|
|
|
|||||
1,582,087 | 6,285 | |||||||
- | - | |||||||
12,649,723 | 4,921 | |||||||
13,393,117 | 102,778 | |||||||
- | - | |||||||
5,784,185 | - | |||||||
180,068 | 600 | |||||||
|
|
|
|
|||||
33,589,180 | 114,584 | |||||||
|
|
|
|
|||||
$ | 810,644,817 | $ | 2,501,234 | |||||
|
|
|
|
|||||
$ | 1,033,924,067 | $ | 4,093,093 | |||||
(223,279,250 | ) | (1,591,859 | ) | |||||
|
|
|
|
|||||
$ | 810,644,817 | $ | 2,501,234 | |||||
|
|
|
|
|||||
30,100,000 | 100,000 | |||||||
$ | 26.93 | $ | 25.01 | |||||
|
|
|
|
|||||
$ | 26.78 | $ | 24.89 | |||||
|
|
|
|
|||||
$ | 835,776,693 | $ | 2,292,401 | |||||
|
|
|
|
|||||
$ | 13,393,117 | $ | 102,778 | |||||
|
|
|
|
|||||
$ | 2,079,689 | $ | 2,896 | |||||
|
|
|
|
|||||
$ | 7,400,802 | $ | 91,030 | |||||
|
|
|
|
33 | ||||
|
| |||
For the six months ended April 30, 2020
(Unaudited)
Invesco FTSE International Low Beta Equal Weight ETF (IDLB) |
Invesco S&P Emerging Markets Low Volatility ETF (EELV) |
Invesco S&P Emerging Markets Momentum ETF (EEMO) |
Invesco S&P International Developed High Dividend Low Volatility ETF (IDHD) | |||||||||||||||||
Investment income: | ||||||||||||||||||||
Unaffiliated interest income |
$ | - | $ | - | $ | 9 | $ | - | ||||||||||||
Unaffiliated dividend income |
402,022 | 4,234,376 | 71,499 | 274,810 | ||||||||||||||||
Affiliated dividend income |
122 | 1,058 | 117 | 137 | ||||||||||||||||
Securities lending income |
7,138 | 6,618 | 124 | 850 | ||||||||||||||||
Foreign withholding tax |
(47,876 | ) | (375,589 | ) | (3,831 | ) | (32,575 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total investment income |
361,406 | 3,866,463 | 67,918 | 243,222 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Expenses: | ||||||||||||||||||||
Unitary management fees |
77,106 | 691,966 | 13,023 | 20,232 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Less: Waivers |
(16 | ) | (246,410 | ) | (4,655 | ) | (19 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net expenses |
77,090 | 445,556 | 8,368 | 20,213 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income |
284,316 | 3,420,907 | 59,550 | 223,009 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Realized and unrealized gain (loss) from: | ||||||||||||||||||||
Net realized gain (loss) from: |
||||||||||||||||||||
Unaffiliated investment securities |
(2,967,392 | ) | (45,882,824 | )(a) | (1,443,637 | )(a) | (131,597 | ) | ||||||||||||
Affiliated investment securities |
(76 | ) | (122 | ) | (6 | ) | 56 | |||||||||||||
In-kind redemptions |
152,313 | (6,767,938 | ) | - | 128,359 | |||||||||||||||
Foreign currencies |
(2,233 | ) | (22,067 | ) | (2,022 | ) | (4,504 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net realized gain (loss) |
(2,817,388 | ) | (52,672,951 | ) | (1,445,665 | ) | (7,686 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Change in net unrealized appreciation (depreciation) of: |
||||||||||||||||||||
Unaffiliated investment securities |
(2,341,647 | ) | (13,995,902 | ) | (300,232 | )(b) | (3,428,346 | ) | ||||||||||||
Affiliated investment securities |
(14 | ) | - | (5 | ) | - | ||||||||||||||
Foreign currencies |
2,401 | 3,788 | (190 | ) | 290 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Change in net unrealized appreciation (depreciation) |
(2,339,260 | ) | (13,992,114 | ) | (300,427 | ) | (3,428,056 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net realized and unrealized gain (loss) |
(5,156,648 | ) | (66,665,065 | ) | (1,746,092 | ) | (3,435,742 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets resulting from operations |
$ | (4,872,332 | ) | $ | (63,244,158 | ) | $ | (1,686,542 | ) | $ | (3,212,733 | ) | ||||||||
|
|
|
|
|
|
|
|
(a) Net of foreign taxes of $13,359 and $2,941, respectively.
(b) Net of foreign taxes of $(1,533).
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
34 | ||||
|
| |||
Invesco S&P International Developed Low Volatility ETF (IDLV) |
Invesco S&P International Developed Momentum ETF (IDMO) | |||||||
$ | - | $ | - | |||||
15,256,408 | 37,866 | |||||||
9,294 | 11 | |||||||
105,008 | 59 | |||||||
(1,823,123 | ) | (7,318 | ) | |||||
|
|
|
|
|||||
13,547,587 | 30,618 | |||||||
|
|
|
|
|||||
1,671,454 | 4,602 | |||||||
|
|
|
|
|||||
(479,503 | ) | (1,317 | ) | |||||
|
|
|
|
|||||
1,191,951 | 3,285 | |||||||
|
|
|
|
|||||
12,355,636 | 27,333 | |||||||
|
|
|
|
|||||
(111,368,211 | ) | (163,347 | ) | |||||
(3,224 | ) | (6 | ) | |||||
8,867,347 | - | |||||||
(396,828 | ) | (664 | ) | |||||
|
|
|
|
|||||
(102,900,916 | ) | (164,017 | ) | |||||
|
|
|
|
|||||
(106,841,536 | ) | (16,461 | ) | |||||
(313 | ) | - | ||||||
48,613 | (14 | ) | ||||||
|
|
|
|
|||||
(106,793,236 | ) | (16,475 | ) | |||||
|
|
|
|
|||||
(209,694,152 | ) | (180,492 | ) | |||||
|
|
|
|
|||||
$ | (197,338,516 | ) | $ | (153,159 | ) | |||
|
|
|
|
35 | ||||
|
| |||
Statements of Changes in Net Assets
For the six months ended April 30, 2020 and the year ended October 31, 2019
(Unaudited)
Invesco FTSE International Low Beta Equal Weight ETF (IDLB) |
Invesco S&P Emerging Markets Low Volatility ETF (EELV) | |||||||||||||||||||
Six Months Ended April 30, 2020 |
Year Ended October 31, 2019 |
Six Months Ended April 30, 2020 |
Year Ended October 31, 2019 | |||||||||||||||||
Operations: | ||||||||||||||||||||
Net investment income |
$ | 284,316 | $ | 2,415,163 | $ | 3,420,907 | $ | 10,014,091 | ||||||||||||
Net realized gain (loss) |
(2,817,388 | ) | 1,941,655 | (52,672,951 | ) | (7,722,334 | ) | |||||||||||||
Change in net unrealized appreciation (depreciation) |
(2,339,260 | ) | 3,926,336 | (13,992,114 | ) | 12,756,268 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets resulting from operations |
(4,872,332 | ) | 8,283,154 | (63,244,158 | ) | 15,048,025 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Distributions to Shareholders from: | ||||||||||||||||||||
Distributable earnings |
(640,967 | ) | (2,663,090 | ) | (5,364,408 | ) | (14,807,076 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Shareholder Transactions: | ||||||||||||||||||||
Proceeds from shares sold |
12,658 | 38,328,349 | 29,874,938 | 92,611,360 | ||||||||||||||||
Value of shares repurchased |
(31,455,683 | ) | (99,591,478 | ) | (83,054,284 | ) | (3,576,939 | ) | ||||||||||||
Transaction fees |
- | - | 264,808 | 86,655 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets resulting from share transactions |
(31,443,025 | ) | (61,263,129 | ) | (52,914,538 | ) | 89,121,076 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets |
(36,956,324 | ) | (55,643,065 | ) | (121,523,104 | ) | 89,362,025 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net assets: | ||||||||||||||||||||
Beginning of period |
53,615,359 | 109,258,424 | 335,632,373 | 246,270,348 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
End of period |
$ | 16,659,035 | $ | 53,615,359 | $ | 214,109,269 | $ | 335,632,373 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Changes in Shares Outstanding: | ||||||||||||||||||||
Shares sold |
- | 1,400,000 | 1,350,000 | 3,900,000 | ||||||||||||||||
Shares repurchased |
(1,200,000 | ) | (3,550,000 | ) | (4,500,000 | ) | (150,000 | ) | ||||||||||||
Shares outstanding, beginning of period |
1,900,001 | 4,050,001 | 14,450,000 | 10,700,000 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Shares outstanding, end of period |
700,001 | 1,900,001 | 11,300,000 | 14,450,000 | ||||||||||||||||
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|
|
|
|
|
|
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
36 | ||||
|
| |||
Invesco S&P Emerging Markets Momentum ETF (EEMO) |
Invesco S&P International Developed High Dividend Low Volatility ETF (IDHD) |
Invesco S&P International Developed Low Volatility ETF (IDLV) |
Invesco S&P International Developed Momentum ETF (IDMO) | |||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2020 |
Year Ended October 31, 2019 |
Six Months Ended April 30, 2020 |
Year Ended October 31, 2019 |
Six Months Ended April 30, 2020 |
Year Ended October 31, 2019 |
Six Months Ended April 30, 2020 |
Year Ended October 31, 2019 | |||||||||||||||||||||||||||||||
$ | 59,550 | $ | 203,116 | $ | 223,009 | $ | 454,113 | $ | 12,355,636 | $ | 25,935,348 | $ | 27,333 | $ | 60,984 | |||||||||||||||||||||||
(1,445,665 | ) | (976,139 | ) | (7,686 | ) | (192,917 | ) | (102,900,916 | ) | (12,989,782 | ) | (164,017 | ) | (148,718 | ) | |||||||||||||||||||||||
(300,427 | ) | 1,692,906 | (3,428,056 | ) | 1,100,346 | (106,793,236 | ) | 101,291,478 | (16,475 | ) | 361,473 | |||||||||||||||||||||||||||
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|||||||||||||||||||||||
(1,686,542 | ) | 919,883 | (3,212,733 | ) | 1,361,542 | (197,338,516 | ) | 114,237,044 | (153,159 | ) | 273,739 | |||||||||||||||||||||||||||
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|||||||||||||||||||||||
(131,358 | ) | (1,227,256 | ) | (472,310 | ) | (462,652 | ) | (37,257,150 | ) | (27,200,949 | ) | (30,985 | ) | (74,476 | ) | |||||||||||||||||||||||
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|||||||||||||||||||||||
1,432,120 | - | 6,387,340 | 10,898,206 | 201,460,892 | 436,062,565 | - | - | |||||||||||||||||||||||||||||||
- | (6,681,594 | ) | (3,825,583 | ) | (2,734,982 | ) | (145,272,315 | ) | (71,976,046 | ) | - | - | ||||||||||||||||||||||||||
1,016 | 5,965 | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||||
1,433,136 | (6,675,629 | ) | 2,561,757 | 8,163,224 | 56,188,577 | 364,086,519 | - | - | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||||
(384,764 | ) | (6,983,002 | ) | (1,123,286 | ) | 9,062,114 | (178,407,089 | ) | 451,122,614 | (184,144 | ) | 199,263 | ||||||||||||||||||||||||||
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|
|||||||||||||||||||||||
5,940,815 | 12,923,817 | 14,300,447 | 5,238,333 | 989,051,906 | 537,929,292 | 2,685,378 | 2,486,115 | |||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
$ | 5,556,051 | $ | 5,940,815 | $ | 13,177,161 | $ | 14,300,447 | $ | 810,644,817 | $ | 989,051,906 | $ | 2,501,234 | $ | 2,685,378 | |||||||||||||||||||||||
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|||||||||||||||||||||||
100,000 | - | 250,000 | 400,000 | 6,400,000 | 13,300,000 | - | - | |||||||||||||||||||||||||||||||
- | (400,000 | ) | (150,000 | ) | (100,000 | ) | (4,900,000 | ) | (2,150,000 | ) | - | - | ||||||||||||||||||||||||||
350,000 | 750,000 | 500,001 | 200,001 | 28,600,000 | 17,450,000 | 100,000 | 100,000 | |||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
450,000 | 350,000 | 600,001 | 500,001 | 30,100,000 | 28,600,000 | 100,000 | 100,000 | |||||||||||||||||||||||||||||||
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|
37 | ||||
|
| |||
Invesco FTSE International Low Beta Equal Weight ETF (IDLB)
Six Months Ended 2020 |
Years Ended October 31, | For the Period October 31, | |||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||
Per Share Operating Performance: |
|||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 28.22 | $ | 26.98 | $ | 29.47 | $ | 25.09 | $ | 24.92 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net investment income(b) |
0.22 | 0.68 | 0.67 | 0.64 | 0.54 | ||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(4.14 | ) | 1.43 | (2.30 | ) | 4.45 | 0.03 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total from investment operations |
(3.92 | ) | 2.11 | (1.63 | ) | 5.09 | 0.57 | ||||||||||||||||||
|
|
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|
|
|
|
|
|
|
||||||||||||||||
Distributions to shareholders from: |
|||||||||||||||||||||||||
Net investment income |
(0.50 | ) | (0.87 | ) | (0.86 | ) | (0.71 | ) | (0.40 | ) | |||||||||||||||
|
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|
|
|
|
|
|
|
|
||||||||||||||||
Net asset value at end of period |
$ | 23.80 | $ | 28.22 | $ | 26.98 | $ | 29.47 | $ | 25.09 | |||||||||||||||
|
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|
|
|
|
|
|
|
||||||||||||||||
Market price at end of period(c) |
$ | 23.57 | $ | 28.02 | $ | 26.86 | $ | 29.44 | $ | 25.20 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net Asset Value Total Return(d) |
(13.95 | )% | 7.94 | % | (5.81 | )% | 20.63 | % | 2.33 | %(e) | |||||||||||||||
Market Price Total Return(d) |
(14.17 | )% | 7.65 | % | (6.12 | )% | 19.98 | % | 2.77 | %(e) | |||||||||||||||
Ratios/Supplemental Data: |
|||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 16,659 | $ | 53,615 | $ | 109,258 | $ | 134,104 | $ | 146,797 | |||||||||||||||
Ratio to average net assets of: |
|||||||||||||||||||||||||
Expenses |
0.45 | %(f) | 0.46 | %(g) | 0.45 | % | 0.45 | % | 0.45 | %(f) | |||||||||||||||
Net investment income |
1.66 | %(f) | 2.48 | %(g) | 2.23 | % | 2.38 | % | 2.22 | %(f) | |||||||||||||||
Portfolio turnover rate(h) |
14 | % | 53 | % | 50 | % | 39 | % | 59 | % |
(a) | Commencement of investment operations. |
(b) | Based on average shares outstanding. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | The net asset value total return from Fund Inception (November 5, 2015, the first day of trading on the exchange) to October 31, 2016 was 2.17%. The market price total return from Fund Inception to October 31, 2016 was 2.16%. |
(f) | Annualized. |
(g) | Ratios include non-recurring costs associated with a proxy statement of 0.01%. |
(h) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
38 | ||||
|
| |||
Financial Highlights(continued)
Invesco S&P Emerging Markets Low Volatility ETF (EELV)
Six Months Ended 2020 |
Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | `2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: |
||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 23.23 | $ | 23.02 | $ | 24.59 | $ | 22.27 | $ | 22.31 | $ | 27.37 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net investment income(a) |
0.24 | 0.74 | 1.04 | 0.63 | 0.57 | 0.69 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(4.17 | ) | 0.58 | (1.68 | ) | 2.29 | (0.14 | ) | (5.11 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total from investment operations. |
(3.93 | ) | 1.32 | (0.64 | ) | 2.92 | 0.43 | (4.42 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||||||||||||
Net investment income |
(0.37 | ) | (1.12 | ) | (1.01 | ) | (0.61 | ) | (0.49 | ) | (0.66 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Transaction fees(a) |
0.02 | 0.01 | 0.08 | 0.01 | 0.02 | 0.02 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net asset value at end of period |
$ | 18.95 | $ | 23.23 | $ | 23.02 | $ | 24.59 | $ | 22.27 | $ | 22.31 | ||||||||||||||||||
|
|
|
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|
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|
|
|
|
|||||||||||||||||||
Market price at end of period(b) |
$ | 18.67 | $ | 23.12 | $ | 23.03 | $ | 24.63 | $ | 22.15 | $ | 22.13 | ||||||||||||||||||
|
|
|
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|
|
|
|
|
|
|
|
|||||||||||||||||||
Net Asset Value Total Return(c) |
(16.80 | )% | 5.87 | % | (2.54 | )% | 13.30 | % | 2.12 | % | (16.21 | )% | ||||||||||||||||||
Market Price Total Return(c) |
(17.64 | )% | 5.32 | % | (2.60 | )% | 14.09 | % | 2.39 | % | (16.48 | )% | ||||||||||||||||||
Ratios/Supplemental Data: |
||||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 214,109 | $ | 335,632 | $ | 246,270 | $ | 277,832 | $ | 269,478 | $ | 176,244 | ||||||||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||||||||||||
Expenses, after Waivers |
0.29 | %(d) | 0.29 | % | 0.29 | % | 0.29 | % | 0.29 | % | 0.29 | % | ||||||||||||||||||
Expenses, prior to Waivers. |
0.45 | %(d) | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | ||||||||||||||||||
Net investment income |
2.22 | %(d) | 3.14 | % | 4.12 | % | 2.74 | % | 2.60 | % | 2.78 | % | ||||||||||||||||||
Portfolio turnover rate(e) |
54 | % | 67 | % | 125 | % | 81 | % | 73 | % | 89 | % |
(a) | Based on average shares outstanding. |
(b) | The mean between the last bid and ask prices. |
(c) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(d) | Annualized. |
(e) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
39 | ||||
|
| |||
Financial Highlights(continued)
Invesco S&P Emerging Markets Momentum ETF (EEMO)
Six Months Ended 2020 |
Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: |
||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 16.97 | $ | 17.23 | $ | 20.85 | $ | 15.87 | $ | 16.20 | $ | 21.70 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net investment income(a) |
0.16 | 0.40 | 0.27 | (b) | 0.40 | 0.22 | 0.52 | |||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(4.44 | ) | 1.61 | (3.03 | ) | 4.70 | (0.23 | ) | (5.69 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total from investment operations |
(4.28 | ) | 2.01 | (2.76 | ) | 5.10 | (0.01 | ) | (5.17 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||||||||||||
Net investment income |
(0.34 | ) | (0.43 | ) | (0.14 | ) | (0.37 | ) | (0.32 | ) | (0.33 | ) | ||||||||||||||||||
Net realized gains. |
- | (1.85 | ) | (0.76 | ) | - | - | - | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total distributions |
(0.34 | ) | (2.28 | ) | (0.90 | ) | (0.37 | ) | (0.32 | ) | (0.33 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Transaction fees(a) |
0.00 | 0.01 | 0.04 | 0.25 | - | - | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net asset value at end of period |
$ | 12.35 | $ | 16.97 | $ | 17.23 | $ | 20.85 | $ | 15.87 | $ | 16.20 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Market price at end of period(c) |
$ | 12.25 | $ | 16.92 | $ | 17.18 | $ | 20.96 | $ | 15.84 | $ | 16.09 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net Asset Value Total Return(d) |
(24.96 | )% | 13.60 | % | (13.66 | )% | 34.38 | % | 0.17 | % | (24.15 | )% | ||||||||||||||||||
Market Price Total Return(d) |
(25.36 | )% | 13.66 | % | (14.35 | )% | 35.37 | % | 0.69 | % | (24.18 | )% | ||||||||||||||||||
Ratios/Supplemental Data: |
||||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 5,556 | $ | 5,941 | $ | 12,924 | $ | 390,986 | $ | 1,587 | $ | 1,620 | ||||||||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||||||||||||
Expenses, after Waivers |
0.29 | %(e)(f) | 0.36 | %(f)(g) | 0.27 | %(f) | 0.27 | %(f) | 0.28 | % | 0.29 | % | ||||||||||||||||||
Expenses, prior to Waivers |
0.45 | %(e)(f) | 0.53 | %(f)(g) | 0.45 | %(f) | 0.45 | %(f) | 0.45 | % | 0.45 | % | ||||||||||||||||||
Net investment income |
2.06 | %(e)(f) | 2.42 | %(g) | 1.26 | %(b) | 2.16 | % | 1.44 | % | 2.52 | % | ||||||||||||||||||
Portfolio turnover rate(h) |
115 | % | 114 | % | 140 | % | 111 | % | 182 | % | 134 | % |
(a) | Based on average shares outstanding. |
(b) | Net Investment income per share and the ratio of net investment income to average net assets include a non-cash taxable distribution received during the year. Net investment income per share and the ratio of net investment income to average net assets excluding the non-cash taxable distribution are $0.17 and 0.83%, respectively. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | Annualized. |
(f) | In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the investment companies in which the Fund invests. Estimated investment companies expenses are not expenses that are incurred directly by the Fund. They are expenses that are incurred directly by the investment companies and are deducted from the value of the investment companies the Fund invests in. The effect of the estimated investment companies expenses that the Fund bears indirectly is included in the Funds total return. |
(g) | Ratios include non-recurring costs associated with a proxy statement of 0.08%. |
(h) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. For the year ended October 31, 2016, the portfolio turnover calculation includes the value of securities purchased and sold in the effort to realign the Funds portfolio holdings due to the underlying index change. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
40 | ||||
|
| |||
Financial Highlights(continued)
Invesco S&P International Developed High Dividend Low Volatility ETF (IDHD)
Six Months Ended 2020 |
Years Ended October 31, |
For the Period October 31, | ||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | |||||||||||||||||
Per Share Operating Performance: |
||||||||||||||||||||
Net asset value at beginning of period |
$ | 28.60 | $ | 26.19 | $ | 28.39 | $ | 25.19 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income(b) |
0.43 | 1.25 | 1.27 | 1.02 | ||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(6.15 | ) | 2.41 | (2.09 | ) | 3.16 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total from investment operations |
(5.72 | ) | 3.66 | (0.82 | ) | 4.18 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||
Net investment income |
(0.92 | ) | (1.25 | ) | (1.38 | ) | (0.98 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net asset value at end of period |
$ | 21.96 | $ | 28.60 | $ | 26.19 | $ | 28.39 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Market price at end of period(c) |
$ | 21.88 | $ | 28.61 | $ | 26.41 | $ | 28.60 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net Asset Value Total Return(d) |
(20.33 | )% | 14.30 | % | (3.11 | )% | 16.70 | %(e) | ||||||||||||
Market Price Total Return(d) |
(20.64 | )% | 13.34 | % | (3.06 | )% | 17.55 | %(e) | ||||||||||||
Ratios/Supplemental Data: |
||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 13,177 | $ | 14,300 | $ | 5,238 | $ | 4,258 | ||||||||||||
Ratio to average net assets of: |
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Expenses |
0.30 | %(f) | 0.37 | %(g) | 0.30 | % | 0.30 | %(f) | ||||||||||||
Net investment income |
3.31 | %(f) | 4.60 | %(g) | 4.51 | % | 4.00 | %(f) | ||||||||||||
Portfolio turnover rate(h) |
27 | % | 58 | % | 65 | % | 72 | % |
(a) | Commencement of investment operations. |
(b) | Based on average shares outstanding. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | The net asset value total return from Fund Inception (December 1, 2016, the first day of trading on the exchange) to October 31, 2017 was 17.22%. The market price total return from Fund Inception to October 31, 2017 was 18.16%. |
(f) | Annualized. |
(g) | Ratios include non-recurring costs associated with a proxy statement of 0.07%. |
(h) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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Financial Highlights(continued)
Invesco S&P International Developed Low Volatility ETF (IDLV)
Six Months Ended 2020 |
Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: |
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Net asset value at beginning of period |
$ | 34.58 | $ | 30.83 | $ | 33.28 | $ | 29.32 | $ | 29.99 | $ | 31.75 | ||||||||||||||||||
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Net investment income(a) |
0.41 | 1.15 | 1.08 | 1.00 | 0.99 | 1.02 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(6.82 | ) | 3.79 | (2.22 | ) | 4.04 | (0.55 | ) | (1.86 | ) | ||||||||||||||||||||
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Total from investment operations. |
(6.41 | ) | 4.94 | (1.14 | ) | 5.04 | 0.44 | (0.84 | ) | |||||||||||||||||||||
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Distributions to shareholders from: |
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Net investment income |
(1.24 | ) | (1.19 | ) | (1.31 | ) | (1.08 | ) | (1.11 | ) | (0.92 | ) | ||||||||||||||||||
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Net asset value at end of period |
$ | 26.93 | $ | 34.58 | $ | 30.83 | $ | 33.28 | $ | 29.32 | $ | 29.99 | ||||||||||||||||||
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Market price at end of period(b) |
$ | 26.78 | $ | 34.57 | $ | 30.76 | $ | 33.29 | $ | 29.38 | $ | 29.90 | ||||||||||||||||||
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Net Asset Value Total Return(c) |
(18.96 | )% | 16.33 | % | (3.62 | )% | 17.59 | % | 1.56 | % | (2.69 | )% | ||||||||||||||||||
Market Price Total Return(c) |
(19.39 | )% | 16.56 | % | (3.87 | )% | 17.38 | % | 2.07 | % | (3.78 | )% | ||||||||||||||||||
Ratios/Supplemental Data: |
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Net assets at end of period (000s omitted) |
$ | 810,645 | $ | 989,052 | $ | 537,929 | $ | 569,124 | $ | 384,137 | $ | 313,428 | ||||||||||||||||||
Ratio to average net assets of: |
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Expenses, after Waivers |
0.25 | %(d) | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | 0.25 | % | ||||||||||||||||||
Expenses, prior to Waivers. |
0.35 | %(d) | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | ||||||||||||||||||
Net investment income |
2.59 | %(d) | 3.51 | % | 3.26 | % | 3.19 | % | 3.33 | % | 3.32 | % | ||||||||||||||||||
Portfolio turnover rate(e) |
64 | % | 59 | % | 65 | % | 69 | % | 56 | % | 66 | % |
(a) | Based on average shares outstanding. |
(b) | The mean between the last bid and ask prices. |
(c) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(d) | Annualized. |
(e) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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Financial Highlights(continued)
Invesco S&P International Developed Momentum ETF (IDMO)
Six Months Ended 2020 |
Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: |
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Net asset value at beginning of period. |
$ | 26.85 | $ | 24.86 | $ | 27.96 | $ | 23.57 | $ | 25.85 | $ | 27.75 | ||||||||||||||||||
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Net investment income(a) |
0.27 | 0.61 | 0.61 | 0.71 | 0.51 | 0.69 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(1.80 | ) | 2.12 | (3.04 | ) | 4.49 | (2.30 | ) | (2.13 | ) | ||||||||||||||||||||
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Total from investment operations |
(1.53 | ) | 2.73 | (2.43 | ) | 5.20 | (1.79 | ) | (1.44 | ) | ||||||||||||||||||||
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Distributions to shareholders from: |
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Net investment income |
(0.31 | ) | (0.74 | ) | (0.67 | ) | (0.81 | ) | (0.49 | ) | (0.46 | ) | ||||||||||||||||||
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Net asset value at end of period |
$ | 25.01 | $ | 26.85 | $ | 24.86 | $ | 27.96 | $ | 23.57 | $ | 25.85 | ||||||||||||||||||
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Market price at end of period(b) |
$ | 24.89 | $ | 26.79 | $ | 24.78 | $ | 27.80 | $ | 23.51 | $ | 25.74 | ||||||||||||||||||
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Net Asset Value Total Return(c) |
(5.54 | )% | 11.30 | % | (8.95 | )% | 22.57 | % | (6.92 | )% | (5.34 | )% | ||||||||||||||||||
Market Price Total Return(c) |
(5.78 | )% | 11.42 | % | (8.70 | )% | 22.19 | % | (6.77 | )% | (6.99 | )% | ||||||||||||||||||
Ratios/Supplemental Data: |
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Net assets at end of period (000s omitted) |
$ | 2,501 | $ | 2,685 | $ | 2,486 | $ | 2,796 | $ | 3,535 | $ | 3,877 | ||||||||||||||||||
Ratio to average net assets of: |
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Expenses, after Waivers |
0.25 | %(d) | 0.53 | %(e) | 0.25 | % | 0.26 | % | 0.26 | % | 0.26 | % | ||||||||||||||||||
Expenses, prior to Waivers |
0.35 | %(d) | 0.63 | %(e) | 0.35 | % | 0.36 | % | 0.36 | % | 0.36 | % | ||||||||||||||||||
Net investment income |
2.08 | %(d) | 2.39 | %(e) | 2.21 | % | 2.87 | % | 2.13 | % | 2.42 | % | ||||||||||||||||||
Portfolio turnover rate(f) |
44 | % | 104 | % | 123 | % | 134 | % | 198 | % | 98 | % |
(a) | Based on average shares outstanding. |
(b) | The mean between the last bid and ask prices. |
(c) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(d) | Annualized. |
(e) | Ratios include non-recurring costs associated with a proxy statement of 0.27%. |
(f) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. For the year ended October 31, 2016, the portfolio turnover calculation includes the value of securities purchased and sold in the effort to realign the Funds portfolio holdings due to the underlying index change. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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Invesco Exchange-Traded Fund Trust II
April 30, 2020
(Unaudited)
NOTE 1Organization
Invesco Exchange-Traded Fund Trust II (the Trust) was organized as a Massachusetts business trust on October 10, 2006 and is authorized to have multiple series of portfolios. The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act). This report includes the following portfolios:
Full Name |
Short Name | |
Invesco FTSE International Low Beta Equal Weight ETF (IDLB) | FTSE International Low Beta Equal Weight ETF | |
Invesco S&P Emerging Markets Low Volatility ETF (EELV) | S&P Emerging Markets Low Volatility ETF | |
Invesco S&P Emerging Markets Momentum ETF (EEMO) | S&P Emerging Markets Momentum ETF | |
Invesco S&P International Developed High Dividend Low Volatility ETF (IDHD) | S&P International Developed High Dividend Low Volatility ETF | |
Invesco S&P International Developed Low Volatility ETF (IDLV) | S&P International Developed Low Volatility ETF | |
Invesco S&P International Developed Momentum ETF (IDMO) | S&P International Developed Momentum ETF |
Each portfolio (each, a Fund, and collectively, the Funds) represents a separate series of the Trust. The shares of the Funds are referred to herein as Shares or Funds Shares. Each Funds Shares are listed and traded on NYSE Arca, Inc., except for Shares of FTSE International Low Beta Equal Weight ETF which are listed and traded on The Nasdaq Stock Market and Shares of S&P International Developed High Dividend Low Volatility ETF, which are listed and traded on Cboe BZX Exchange, Inc.
The market price of each Share may differ to some degree from a Funds net asset value (NAV). Unlike conventional mutual funds, each Fund issues and redeems Shares on a continuous basis, at NAV, only in a large specified number of Shares, each called a Creation Unit. Creation Units are issued and redeemed principally in exchange for the deposit or delivery of a basket of securities (Deposit Securities). Except when aggregated in Creation Units by Authorized Participants, the Shares are not individually redeemable securities of the Funds.
The investment objective of each Fund is to seek to track the investment results (before fees and expenses) of its respective index listed below (each, an Underlying Index).
Fund |
Underlying Index | |
FTSE International Low Beta Equal Weight ETF | FTSE Developed ex-U.S. Low Beta Equal Weight Index | |
S&P Emerging Markets Low Volatility ETF | S&P BMI Emerging Markets Low Volatility IndexTM | |
S&P Emerging Markets Momentum ETF | S&P Momentum Emerging Plus LargeMidCap Index | |
S&P International Developed High Dividend Low Volatility ETF | S&P EPAC Ex-Korea Low Volatility High Dividend Index | |
S&P International Developed Low Volatility ETF | S&P BMI International Developed Low VolatilityTM Index | |
S&P International Developed Momentum ETF | S&P Momentum Developed ex-U.S. & South Korea LargeMidCap Index |
NOTE 2Significant Accounting Policies
The following is a summary of the significant accounting policies followed by the Funds in preparation of their financial statements.
Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial ServicesInvestment Companies.
A. | Security Valuation - Securities, including restricted securities, are valued according to the following policies: |
Securities, including restricted securities in a fund that are held as investments (the Underlying Fund), if any, of a Fund, are valued in accordance with the Underlying Funds valuation policy. The policies of Underlying Funds affiliated with the Funds as a result of having the same investment adviser are the same as those set forth below.
A security listed or traded on an exchange (except convertible securities) is generally valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded or, lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked prices from the exchange on which they are principally traded, or at the final settlement price set by such exchange. Swaps and options not listed on an exchange are valued by an
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independent source. For purposes of determining NAV per Share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investment companies are valued using such companys NAV per share, unless the shares are exchange-traded, in which case they are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a Fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the London world markets. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that Invesco Capital Management LLC (the Adviser) determines are significant and make the closing price unreliable, a Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, the potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value exchange-traded equity securities. The mean between the last bid and asked prices may be used to value debt obligations, including corporate loans, and unlisted equity securities.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith following procedures approved by the Board of Trustees. Issuer-specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
Each Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund investments.
Valuations change in response to many factors, including the historical and prospective earnings of the issuer, the value of the issuers assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or adverse investor sentiment generally and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Other Risks |
Authorized Participant Concentration Risk. Only Authorized Participants (APs) may engage in creation or redemption transactions directly with each Fund. Each Fund has a limited number of institutions that may act as APs, and such APs have no obligation to submit creation or redemption orders. Consequently, there is no assurance that APs will establish or maintain an active trading market for the Shares. This risk may be heightened to the extent that securities held by each Fund are traded outside a collateralized settlement system. In that case, APs may be required to post collateral on certain trades on an agency basis (i.e., on behalf of other market participants), which only a limited number of APs may be able to do. In addition, to the extent that APs exit the business or are unable to proceed with creation and/or redemption orders with respect to each
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Fund and no other AP is able to step forward to create or redeem Creation Units, this may result in a significantly diminished trading market for Shares, and Shares may be more likely to trade at a premium or discount to each Funds NAV and to face trading halts and/or delisting. Investments in non-U.S. securities, which may have lower trading volumes, may increase this risk.
Emerging Markets Investment Risk. For certain Funds, investments in the securities of issuers in emerging market countries involve risks often not associated with investments in the securities of issuers in developed countries. Securities in emerging markets may be subject to greater price fluctuations than securities in more developed markets. Fluctuations in the value of the U.S. dollar relative to the values of other currencies may adversely affect investments in emerging market securities, and emerging market securities may have relatively low market liquidity, decreased publicly available information about issuers, and inconsistent and potentially less stringent accounting, auditing and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Emerging market securities also are subject to the risks of expropriation, nationalization or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. Investments in emerging market securities also may be subject to dividend withholding or confiscatory taxes, currency blockage and/or transfer restrictions. Emerging markets usually are subject to greater market volatility, lower trading volume, political and economic instability, uncertainty regarding the existence of trading markets and more governmental limitations on foreign investment than are more developed markets. Securities law in many emerging market countries is relatively new and unsettled. Therefore, laws regarding foreign investment in emerging market securities, securities regulation, title to securities, and shareholder rights may change quickly and unpredictably. In addition, the enforcement of systems of taxation at federal, regional and local levels in emerging market countries may be inconsistent and subject to sudden change.
Equity Risk. Equity risk is the risk that the value of equity securities, including common stocks, may fall due to both changes in general economic conditions that impact the market as a whole, as well as factors that directly relate to a specific company or its industry. Such general economic conditions include changes in interest rates, periods of market turbulence or instability, or general and prolonged periods of economic decline and cyclical change. It is possible that a drop in the stock market may depress the price of most or all of the common stocks that each Fund holds. In addition, equity risk includes the risk that investor sentiment toward one or more industries will become negative, resulting in those investors exiting their investments in those industries, which could cause a reduction in the value of companies in those industries more broadly. The value of a companys common stock may fall solely because of factors, such as an increase in production costs, that negatively impact other companies in the same region, industry or sector of the market. A companys common stock also may decline significantly in price over a short period of time due to factors specific to that company, including decisions made by its management or lower demand for the companys products or services. For example, an adverse event, such as an unfavorable earnings report or the failure to make anticipated dividend payments, may depress the value of common stock.
Foreign Investment Risk. For certain Funds, investments in the securities of non-U.S. issuers involve risks beyond those associated with investments in U.S. securities. Foreign securities may have relatively low market liquidity, greater market volatility, decreased publicly available information and less reliable financial information about issuers, and inconsistent and potentially less stringent accounting, auditing and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Foreign securities also are subject to risk of expropriation, nationalization, political instability or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. Investments in foreign securities also may be subject to dividend withholding or confiscatory taxes, currency blockage and/or transfer restrictions and higher transactional costs. If a Fund invests in securities denominated in foreign currencies, fluctuations in the value of the U.S. dollar relative to the values of other currencies may adversely affect investments in foreign securities and may negatively impact the Funds returns.
High Dividend Paying Securities Risk. Certain Funds invest in securities that pay high dividends. As a group, these securities can fall out of favor with the market, causing such companies to underperform companies that do not pay high dividends. Also, changes in the dividend policies of the companies in which a Fund invests and the capital resources available for such companies dividend payments may adversely affect a Fund.
Index Risk. Unlike many investment companies, each Fund does not utilize an investing strategy that seeks returns in excess of its Underlying Index. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its Underlying Index, even if that security generally is underperforming. Additionally, each Fund rebalances its portfolio in accordance with its Underlying Index, and, therefore, any changes to the Underlying Indexs rebalance schedule will result in corresponding changes to each Funds rebalance schedule.
Industry Concentration Risk. In following its methodology, each Funds Underlying Index from time to time may be concentrated to a significant degree in securities of issuers operating in a single industry or industry group. To the extent that each Underlying Index concentrates in the securities of issuers in a particular industry or industry group, the corresponding Fund will also concentrate its investments to approximately the same extent. By concentrating its investments in an industry or industry group, each Fund may face more risks than if it were diversified broadly over numerous industries or industry groups. Such industry-based risks, any of which may adversely affect the companies in which each Fund invests, may include, but are not limited to, legislative or regulatory changes, adverse market conditions and/or increased competition within the
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industry or industry group. In addition, at times, such industry or industry group may be out of favor and underperform other industries, industry groups or the market as a whole.
Market Risk. Securities in the Underlying Index are subject to market fluctuations. You should anticipate that the value of the Shares will decline more or less, in correlation with any decline in value of the securities in the Underlying Index. Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to each Funds NAV.
Mid-Capitalization Company Risk. Investing in securities of mid-capitalization companies involves greater risk than customarily is associated with investing in larger, more established companies. These companies securities may be more volatile and less liquid than those of more established companies. These securities may have returns that vary, sometimes significantly, from the overall securities market. Mid-capitalization companies tend to have inexperienced management as well as limited product and market diversification and financial resources. Often mid-capitalization companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.
Momentum Investing Risk. For certain Funds, the momentum style of investing is subject to the risk that the securities may be more volatile than the market as a whole, or that the returns on securities that have previously exhibited price momentum are less than returns on other styles of investing. Momentum can turn quickly, and stocks that previously exhibited high momentum may not experience continued positive momentum. In addition, there may be periods when the momentum style of investing is out of favor and therefore, the investment performance of a Fund may suffer.
Non-Correlation Risk. Each Funds return may not match the return of its corresponding Underlying Index for a number of reasons. For example, each Fund incurs operating expenses not applicable to the Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the Funds securities holdings to reflect changes in the composition of its corresponding Underlying Index. Additionally, a Funds use of a representative sampling approach may cause the Fund not to be as well-correlated with the return of its corresponding Underlying Index as would be the case if the Fund purchased all of the securities in its corresponding Underlying Index in the proportions represented in the Underlying Index. In addition, the performance of each Fund and its corresponding Underlying Index may vary due to asset valuation differences and differences between each Funds portfolio and its corresponding Underlying Index resulting from legal restrictions, costs or liquidity constraints.
Portfolio Turnover Risk. Certain Funds may engage in frequent trading of their respective portfolio securities in connection with the rebalancing or adjustment of their respective Underlying Index. A portfolio turnover rate of 200%, for example, is equivalent to a Fund buying and selling all of its securities two times during the course of a year. A high portfolio turnover rate (such as 100% or more) could result in high brokerage costs for a Fund. While a high portfolio turnover rate can result in an increase in taxable capital gain distributions to a Funds shareholders, the Fund will seek to utilize the in-kind creation and redemption mechanism to minimize realization of capital gains to the extent possible.
Sampling Risk. Certain Funds use of a representative sampling approach may result in the Fund holding a smaller number of securities than are in its respective Underlying Index. As a result, an adverse development to an issuer of securities that the Fund holds could result in a greater decline in NAV than would be the case if the Fund held all of the securities in its Underlying Index. To the extent the assets in the Fund are smaller, these risks will be greater.
C. | Investment Transactions and Investment Income - Investment transactions are accounted for on a trade date basis. Realized gains and losses from the sale or disposition of securities are computed on the specific identified cost basis. Interest income is recorded on an accrual basis from settlement date. Pay-in-kind interest income and non-cash dividend income received in the form of securities in-lieu of cash are recorded at the fair value of the securities received. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Realized gains, dividends and interest received by a Fund may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. |
The Funds may periodically participate in litigation related to each Funds investments. As such, the Funds may receive proceeds from litigation settlements. Any proceeds received are included in the Statements of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statements of Operations and the Statements of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of each Funds NAV and, accordingly, they reduce each Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statements of Operations and the Statements of Changes in Net Assets, or the net investment income per share and the ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between each Fund and the Adviser.
D. | Country Determination - For the purposes of presentation in the Schedules of Investments, the Adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include whether each Funds Underlying Index has made a country determination and may include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total |
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revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
E. | Dividends and Distributions to Shareholders - Each Fund declares and pays dividends from net investment income, if any, to its shareholders quarterly and records such dividends on the ex-dividend date. Generally, each Fund distributes net realized taxable capital gains, if any, annually in cash and records them on the ex-dividend date. Such distributions on a tax basis are determined in conformity with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America (GAAP). Distributions in excess of tax basis earnings and profits, if any, are reported in such Funds financial statements as a tax return of capital at fiscal year-end. |
F. | Federal Income Taxes - Each Fund intends to comply with the provisions of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), applicable to regulated investment companies and to distribute substantially all of the Funds taxable earnings to its shareholders. As such, the Funds will not be subject to federal income taxes on otherwise taxable income (including net realized gains) that is distributed to the shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
Each Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed each Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing book and tax treatments for in-kind transactions, losses deferred due to wash sales, and passive foreign investment company adjustments, if any.
The Funds file U.S. federal tax returns and tax returns in certain other jurisdictions. Generally, a Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
G. | Expenses - Each Fund has agreed to pay an annual unitary management fee to the Adviser. Out of the unitary management fee, the Adviser has agreed to pay for substantially all expenses of the Funds, including the costs of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses. |
Expenses of the Trust that are excluded from a Funds unitary management fee and are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that are excluded from a Funds unitary management fee and are not readily identifiable to a specific Fund are allocated in such a manner as deemed equitable, taking into consideration the nature and type of expense and the relative net assets of each Fund.
To the extent a Fund invests in other investment companies, the expenses shown in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the investment companies in which it invests. The effects of such investment companies expenses are included in the realized and unrealized gain or loss on the investments in the investment companies.
H. | Accounting Estimates - The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements, including estimates and assumptions related to taxation. Actual results could differ from these estimates. In addition, the Funds monitor for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
I. | Indemnifications - Under the Trusts organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. Each Board member who is not an interested person (as defined in the 1940 Act) of the Trust (each, an Independent Trustee) is also indemnified against certain liabilities arising out of the performance of their duties to the Trust pursuant to an Indemnification Agreement between such trustee and the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trusts maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. However, based on experience, the Trust believes the risk of loss to be remote. |
J. | Securities Lending - Each Fund may participate in securities lending and may loan portfolio securities having a market value up to one-third of the Funds total assets. Such loans are secured by cash collateral equal to no less than 102% (105% for international securities) of the market value of the loaned securities determined daily by the securities lending provider. Cash collateral received in connection with these loans is generally invested in an affiliated money market fund and is shown as such on the Schedules of Investments. Each Fund bears the risk of loss with respect to the investment of collateral. It is the policy of these Funds to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. When loaning securities, each Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. Lending securities entails a risk of loss to each Fund if, and to the extent that, the market value of the securities loaned were to increase, and the |
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borrower did not increase the collateral accordingly, and the borrower failed to return the securities. The securities loaned are subject to termination at the option of the borrower or each Fund. Upon termination, the borrower will return to each Fund the securities loaned and each Fund will return the collateral. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. Each Fund could experience delays and costs in gaining access to the collateral and the securities may lose value during the delay which could result in potential losses to each Fund. Some of these losses may be indemnified by the lending agent. Each Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. For Funds that participated in securities lending, dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, are included in Securities lending income on the Statements of Operations. The aggregate value of securities out on loan, if any, is shown on the Statements of Assets and Liabilities. |
K. | Foreign Currency Translations - Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. Each Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statements of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on each Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period-end, resulting from changes in exchange rates. |
Each Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which each Fund invests.
NOTE 3Investment Advisory Agreement and Other Agreements
The Trust has entered into an Investment Advisory Agreement with the Adviser on behalf of each Fund, pursuant to which the Adviser has overall responsibility for the selection and ongoing monitoring of the Funds investments, managing the Funds business affairs and providing certain clerical, bookkeeping and other administrative services.
Pursuant to the Investment Advisory Agreement, each Fund accrues daily and pays monthly to the Adviser an annual unitary management fee equal to a percentage of its average daily net assets. Out of the unitary management fee, the Adviser has agreed to pay for substantially all expenses of the Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses. The annual unitary management fee paid by each Fund to the Adviser is equal to a percentage of each Funds average daily net assets as follows:
Unitary Management Fees | |||||
(as a % of average daily net assets) | |||||
FTSE International Low Beta Equal Weight ETF |
0.45 | % | |||
S&P Emerging Markets Low Volatility ETF |
0.45 | %* | |||
S&P Emerging Markets Momentum ETF |
0.45 | %* | |||
S&P International Developed High Dividend Low Volatility ETF |
0.30 | % | |||
S&P International Developed Low Volatility ETF |
0.35 | %** | |||
S&P International Developed Momentum ETF |
0.35 | %** |
* | Effective May 1, 2020 the Adviser contractually reduced the annual unitary management fee from 0.45% to 0.29% of its average daily net assets. Prior to May 1, 2020, the Adviser agreed to waive a portion of its annual unitary management fee, which resulted in a net annual unitary management fee of 0.29% of its average daily net assets. |
** | Effective May 1, 2020 the Adviser contractually reduced the annual unitary management fee from 0.35% to 0.25% of its average daily net assets. Prior to May 1, 2020, the Adviser agreed to waive a portion of its annual unitary management fee, which resulted in a net annual unitary management fee of 0.25% of its average daily net assets. |
Further, through at least August 31, 2022, the Adviser has contractually agreed to waive a portion of each Funds management fee in an amount equal to 100% of the net advisory fees an affiliate of the Adviser receives that are attributable to the Funds investments of otherwise uninvested cash in money market funds managed by that affiliate (excluding investments of cash collateral from securities lending). There is no guarantee that the Adviser will extend the waiver of these fees past that date.
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For the six-month period ended April 30, 2020, the Adviser waived fees for each Fund in the following amounts:
FTSE International Low Beta Equal Weight ETF |
$ | 16 | ||
S&P Emerging Markets Low Volatility ETF |
246,410 | |||
S&P Emerging Markets Momentum ETF |
4,655 | |||
S&P International Developed High Dividend Low Volatility ETF |
19 | |||
S&P International Developed Low Volatility ETF |
479,503 | |||
S&P International Developed Momentum ETF |
1,317 |
The Trust has entered into a Distribution Agreement with Invesco Distributors, Inc. (the Distributor), which serves as the distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in the Shares. The Funds are not charged any fees pursuant to the Distribution Agreement. The Distributor is an affiliate of the Adviser.
The Adviser has entered into a licensing agreement for each Fund with the following entities (each, a Licensor):
Fund |
Licensor | |
FTSE International Low Beta Equal Weight ETF | FTSE International Ltd. | |
S&P Emerging Markets Low Volatility ETF | S&P Dow Jones Indices LLC | |
S&P Emerging Markets Momentum ETF | S&P Dow Jones Indices LLC | |
S&P International Developed High Dividend Low Volatility ETF | S&P Dow Jones Indices LLC | |
S&P International Developed Low Volatility ETF | S&P Dow Jones Indices LLC | |
S&P International Developed Momentum ETF | S&P Dow Jones Indices LLC |
Each Underlying Index name trademark is owned by its respective Licensor. These trademarks have been licensed to the Adviser for use by the Funds. Each Fund is entitled to use its Underlying Index pursuant to the Trusts sub-licensing agreement with the Adviser. The Funds are not sponsored, endorsed, sold or promoted by the Licensors, and the Licensors make no representation regarding the advisability of investing in any of the Funds.
The Trust has entered into service agreements whereby The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian, fund accountant and transfer agent for each Fund.
NOTE 4Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 |
Prices are determined using quoted prices in an active market for identical assets. | |
Level 2 |
Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. | |
Level 3 |
Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect a Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 2020. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
FTSE International Low Beta Equal Weight ETF |
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Investments in Securities |
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Common Stocks & Other Equity Interests |
$ | 6,920,478 | $ | 9,596,911 | $ | 0 | $ | 16,517,389 | ||||||||||||
Money Market Funds |
- | 444,346 | - | 444,346 | ||||||||||||||||
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|
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|
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Total Investments |
$ | 6,920,478 | $ | 10,041,257 | $ | 0 | $ | 16,961,735 | ||||||||||||
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Level 1 | Level 2 | Level 3 | Total | |||||||||||||
S&P Emerging Markets Low Volatility ETF | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 41,566,033 | $ | 163,955,368 | $ | 0 | $ | 205,521,401 | ||||||||
Exchange-Traded Fund |
8,534,499 | - | - | 8,534,499 | ||||||||||||
Money Market Funds |
- | 965,251 | - | 965,251 | ||||||||||||
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|
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|
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Total Investments |
$ | 50,100,532 | $ | 164,920,619 | $ | 0 | $ | 215,021,151 | ||||||||
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S&P Emerging Markets Momentum ETF | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 1,830,465 | $ | 3,717,873 | $ | 0 | $ | 5,548,338 | ||||||||
Exchange-Traded Fund |
2,685 | - | - | 2,685 | ||||||||||||
Non-U.S. Dollar Denominated Bonds & Notes |
- | 221 | - | 221 | ||||||||||||
Money Market Funds |
- | 20,649 | - | 20,649 | ||||||||||||
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|
|
|
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Total Investments |
$ | 1,833,150 | $ | 3,738,743 | $ | 0 | $ | 5,571,893 | ||||||||
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S&P International Developed High Dividend Low Volatility ETF | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 5,817,106 | $ | 7,320,827 | $ | - | $ | 13,137,933 | ||||||||
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|
|
|
|
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Total Investments |
$ | 5,817,106 | $ | 7,320,827 | $ | - | $ | 13,137,933 | ||||||||
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S&P International Developed Low Volatility ETF | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 291,749,307 | $ | 516,449,377 | $ | - | $ | 808,198,684 | ||||||||
Money Market Funds |
- | 13,393,117 | - | 13,393,117 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Investments |
$ | 291,749,307 | $ | 529,842,494 | $ | - | $ | 821,591,801 | ||||||||
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|
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S&P International Developed Momentum ETF | ||||||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 2,495,874 | $ | - | $ | - | $ | 2,495,874 | ||||||||
Money Market Funds |
- | 102,778 | - | 102,778 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Investments |
$ | 2,495,874 | $ | 102,778 | $ | - | $ | 2,598,652 | ||||||||
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NOTE 5Tax Information
The amount and character of income and gains to be distributed are determined in accordance with federal income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under federal income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforwards are calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforwards actually available for the Funds to utilize. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Funds had capital loss carryforwards as of October 31, 2019, as follows:
No expiration | ||||||||||||
Short-Term | Long-Term | Total* | ||||||||||
FTSE International Low Beta Equal Weight ETF |
$ | 6,801,019 | $ | 5,855,992 | $ | 12,657,011 | ||||||
S&P Emerging Markets Low Volatility ETF |
49,719,397 | 25,074,679 | 74,794,076 | |||||||||
S&P Emerging Markets Momentum ETF |
880,846 | 60,134 | 940,980 | |||||||||
S&P International Developed High Dividend Low Volatility ETF |
348,037 | 237,939 | 585,976 | |||||||||
S&P International Developed Low Volatility ETF |
37,020,400 | 23,361,680 | 60,382,080 | |||||||||
S&P International Developed Momentum ETF |
1,213,905 | 412,669 | 1,626,574 |
* | Capital loss carryforwards are reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
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NOTE 6Investment Transactions
For the six-month period ended April 30, 2020, the cost of securities purchased and proceeds from sales of securities (other than short-term securities, U.S. Treasury obligations, money market funds and in-kind transactions, if any) were as follows:
Purchases | Sales | |||||||
FTSE International Low Beta Equal Weight ETF |
$ | 4,780,093 | $ | 7,870,226 | ||||
S&P Emerging Markets Low Volatility ETF |
162,979,546 | 200,049,016 | ||||||
S&P Emerging Markets Momentum ETF |
7,400,501 | 6,680,064 | ||||||
S&P International Developed High Dividend Low Volatility ETF |
3,909,254 | 3,598,667 | ||||||
S&P International Developed Low Volatility ETF |
598,505,271 | 623,887,876 | ||||||
S&P International Developed Momentum ETF |
1,170,109 | 1,176,616 |
For the six-month period ended April 30, 2020, in-kind transactions associated with creations and redemptions were as follows:
Cost of | Value of | |||||||
Securities | Securities | |||||||
Received | Delivered | |||||||
FTSE International Low Beta Equal Weight ETF |
$ | - | $ | 28,596,963 | ||||
S&P Emerging Markets Low Volatility ETF |
11,744,566 | 29,721,536 | ||||||
S&P Emerging Markets Momentum ETF |
639,962 | - | ||||||
S&P International Developed High Dividend Low Volatility ETF |
6,376,830 | 4,382,522 | ||||||
S&P International Developed Low Volatility ETF |
201,350,889 | 144,812,362 | ||||||
S&P International Developed Momentum ETF |
- | - |
Gains (losses) on in-kind transactions are generally not considered taxable gains (losses) for federal income tax purposes.
As of April 30, 2020, the aggregate cost of investments, including any derivatives, on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end:
Net | ||||||||||||||||
Gross | Gross | Unrealized | ||||||||||||||
Unrealized | Unrealized | Appreciation | ||||||||||||||
Appreciation | (Depreciation) | (Depreciation) | Cost | |||||||||||||
FTSE International Low Beta Equal Weight ETF |
$ | 540,292 | $ | (3,282,082 | ) | $ | (2,741,790 | ) | $ | 19,703,525 | ||||||
S&P Emerging Markets Low Volatility ETF |
12,530,788 | (29,000,507 | ) | (16,469,719 | ) | 231,490,870 | ||||||||||
S&P Emerging Markets Momentum ETF |
358,970 | (171,366 | ) | 187,604 | 5,384,289 | |||||||||||
S&P International Developed High Dividend Low Volatility ETF |
133,514 | (3,269,645 | ) | (3,136,131 | ) | 16,274,064 | ||||||||||
S&P International Developed Low Volatility ETF |
24,321,322 | (84,807,808 | ) | (60,486,486 | ) | 882,078,287 | ||||||||||
S&P International Developed Momentum ETF |
253,620 | (57,588 | ) | 196,032 | 2,402,620 |
NOTE 7Trustees and Officers Fees
Trustees and Officers Fees include amounts accrued by the Funds to pay remuneration to the Independent Trustees and an Officer of the Trust. The Adviser, as a result of each Funds unitary management fee, pays for such compensation for the Funds. The Trustee who is an interested person of the Trust does not receive any Trustees fees.
The Trust has adopted a deferred compensation plan (the Plan). Under the Plan, each Independent Trustee who has executed a Deferred Fee Agreement (a Participating Trustee) may defer receipt of all or a portion of their compensation (Deferral Fees). Such Deferral Fees are deemed to be invested in select Invesco ETFs. The Deferral Fees payable to a Participating Trustee are valued as of the date such Deferral Fees would have been paid to a Participating Trustee. The value increases with contributions or with increases in the value of the Shares selected, and the value decreases with distributions or with declines in the value of the Shares selected. Obligations under the Plan represent unsecured claims against the general assets of the Funds.
NOTE 8Capital
Shares are issued and redeemed by each Fund only in Creation Units of 50,000 Shares. Only Authorized Participants are permitted to purchase or redeem Creation Units from the Funds. Such transactions are principally permitted in exchange for Deposit Securities, with a balancing cash component to equate the transaction to the NAV per Share of a Fund of the Trust on the transaction date. However, for all Funds, cash in an amount equivalent to the value of certain securities may be substituted, generally when the securities are not available in sufficient quantity for delivery, not eligible for trading by the Authorized Participant or as a result of other market circumstances.
To the extent that the Funds permit transactions in exchange for Deposit Securities, each Fund may issue Shares in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit with the Trust cash at
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least equal to 105% of the market value of the missing Deposit Securities. In accordance with the Trusts Participant Agreement, Creation Units will be issued to an Authorized Participant, notwithstanding the fact that the corresponding Deposit Securities have not been received in part or in whole, in reliance on the undertaking of the Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking shall be secured by the Authorized Participants delivery and maintenance of collateral consisting of cash in the form of U.S. dollars in immediately available funds having a value (marked-to-market daily) at least equal to 105%, which the Adviser may change from time to time, of the value of the missing Deposit Securities.
Certain transaction fees may be charged by the Funds for creations and redemptions, which are treated as increases in capital.
Transactions in each Funds Shares are disclosed in detail in the Statements of Changes in Net Assets.
NOTE 9Coronavirus (COVID-19) Pandemic
During the first quarter of 2020, the World Health Organization declared COVID-19 to be a public health emergency. COVID-19 has led to increased short-term market volatility and may have adverse long-term effects on U.S. and world economies and markets in general. COVID-19 may adversely impact the value of the Funds investments. Because of the uncertainties on valuation, the global economy and business operations, values reflected in these financial statements may materially differ from the value received upon actual sales of those investments.
The extent of the impact on the performance of the Funds and their investments will depend on future developments, including the duration and spread of the COVID-19 outbreak, related restrictions and advisories, and the effects on the financial markets and economy overall, all of which are highly uncertain and cannot be predicted.
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Calculating your ongoing Fund expenses
Example
As a shareholder of a Fund of the Invesco Exchange-Traded Fund Trust II, you incur a unitary management fee. In addition to the unitary management fee, a shareholder may pay distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2019 through April 30, 2020.
In addition to the fees and expenses which the Invesco S&P Emerging Markets Momentum ETF (the Portfolio) bears directly, the Portfolio indirectly bears a pro rata share of the fees and expenses of the investment companies in which the Portfolio invests. The amount of fees and expenses incurred indirectly by the Portfolio will vary because the investment companies have varied expenses and fee levels and the Portfolio may own different proportions of the investment companies at different times. Estimated investment companies expenses are not expenses that are incurred directly by the Portfolio. They are expenses that are incurred directly by the investment companies and are deducted from the value of the investment companies the Portfolio invests in. The effect of the estimated investment companies expenses that the Portfolio bears indirectly is included in the Portfolios total return.
Actual Expenses
The first line in the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading Expenses Paid During the Six-Month Period to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line in the following table provides information about hypothetical account values and hypothetical expenses based on each Funds actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Funds actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as sales charges and brokerage commissions. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, expenses shown in the table do not include the expenses of the underlying funds, which are borne indirectly by a Fund. If transaction costs and indirect expenses were included, your costs would have been higher.
Annualized | ||||||||||||||||||||
Beginning | Ending | Expense Ratio | Expenses Paid | |||||||||||||||||
Account Value | Account Value | Based on the | During the | |||||||||||||||||
November 1, 2019 | April 30, 2020 | Six-Month Period | Six-Month Period(1) | |||||||||||||||||
Invesco FTSE International Low Beta Equal Weight ETF (IDLB) |
||||||||||||||||||||
Actual |
$ | 1,000.00 | $ | 860.50 | 0.45 | % | $ | 2.08 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.63 | 0.45 | 2.26 | ||||||||||||||||
Invesco S&P Emerging Markets Low Volatility ETF (EELV) |
||||||||||||||||||||
Actual |
1,000.00 | 832.00 | 0.29 | 1.32 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,023.42 | 0.29 | 1.46 | ||||||||||||||||
Invesco S&P Emerging Markets Momentum ETF (EEMO) |
||||||||||||||||||||
Actual |
1,000.00 | 750.40 | 0.29 | 1.26 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,023.42 | 0.29 | 1.46 |
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Calculating your ongoing Fund expenses(continued)
Annualized | ||||||||||||||||||||
Beginning | Ending | Expense Ratio | Expenses Paid | |||||||||||||||||
Account Value | Account Value | Based on the | During the | |||||||||||||||||
November 1, 2019 | April 30, 2020 | Six-Month Period | Six-Month Period(1) | |||||||||||||||||
Invesco S&P International Developed High Dividend Low Volatility ETF (IDHD) | ||||||||||||||||||||
Actual |
$ | 1,000.00 | $ | 796.70 | 0.30 | % | $ | 1.34 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,023.37 | 0.30 | 1.51 | ||||||||||||||||
Invesco S&P International Developed Low Volatility ETF (IDLV) |
||||||||||||||||||||
Actual |
1,000.00 | 810.40 | 0.25 | 1.13 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,023.62 | 0.25 | 1.26 | ||||||||||||||||
Invesco S&P International Developed Momentum ETF (IDMO) |
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Actual |
1,000.00 | 944.60 | 0.25 | 1.21 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,023.62 | 0.25 | 1.26 | ||||||||||||||||
(1) | Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six-month period ended April 30, 2020. Expenses are calculated by multiplying the Funds annualized expense ratio by the average account value for the period, then multiplying the result by 182/366. |
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Approval of Investment Advisory and Sub-Advisory Contracts
At a meeting held on April 14, 2020, the Board of Trustees of the Invesco Exchange-Traded Fund Trust II (the Trust), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco Capital Management LLC (the Adviser) and the Trust for the following 71 series (each, a Fund and collectively, the Funds):
Also at the April 14, 2020 meeting, the Board of Trustees of the Trust, including the Independent Trustees, approved the continuation of the Investment Sub-Advisory Agreement between the Adviser and the following seven affiliated sub-advisers for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF (the Sub-Advisory Agreement): Invesco Advisers, Inc.; Invesco Asset Management Deutschland, GmbH; Invesco Asset Management Limited; Invesco Asset Management (Japan) Limited; Invesco Hong Kong Limited; Invesco Senior Secured Management, Inc.; and Invesco Canada Ltd. (each, a Sub-Adviser and collectively, the Sub-Advisers).
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
Investment Advisory Agreement
The Trustees reviewed information from the Adviser describing: (i) the nature, extent and quality of services provided, (ii) the investment performance of each Fund and the Adviser, (iii) the fees paid by the Funds and comparisons to amounts paid by other comparable registered investment companies, (iv) the costs of services provided and estimated profits realized by the Adviser, (v) the extent to which economies of scale may be realized as a Fund grows and whether fee levels reflect any possible economies of scale for the benefit of Fund shareholders, and (vi) any further benefits realized by the Adviser or its affiliates from the Advisers relationship with the Funds.
Nature, Extent and Quality of Services. In evaluating the nature, extent and quality of the Advisers services, the Trustees reviewed information concerning the functions performed by the Adviser for the Funds, information describing the Advisers current organization and staffing, including operational support provided by the Advisers parent organization, Invesco Ltd. (Invesco), and the background and experience of the persons responsible for the day-to-day management of the Funds. The Trustees reviewed matters related to the Advisers execution and/or oversight of execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and their underlying indexes for the one-year, three-year, five-year, ten-year and since-inception periods ended December 31, 2019, as applicable, including reports for each of those periods on the correlation and tracking error between each Funds performance and the performance of its underlying index, as well as the Advisers analysis of the tracking error and correlation between certain Funds and their underlying indexes. In reviewing the tracking error reports, the Trustees considered information provided by Invescos independent performance and risk management group with respect to general expected tracking error ranges. The Trustees also considered that certain Funds were created in connection with the purchases by Invesco of the exchange-traded funds businesses of Guggenheim Capital LLC on April 6, 2018 and Massachusetts Mutual Life Insurance Company (Oppenheimer) on May 24, 2019 (each, a Transaction), and that each such Funds performance prior to the closing of the applicable Transaction is that of its predecessor Guggenheim ETF or Oppenheimer ETF. The Trustees noted that, for each applicable period, the correlation for each Fund, other than the five-year and since-inception periods for Invesco Global Short Term High Yield Bond ETF and the one-year and ten-year periods for Invesco VRDO Tax-Free Weekly ETF, was within the targeted range set forth in the Trusts registration statement. The Trustees reviewed the reasons provided by the Adviser for Invesco Global Short Term High Yield Bond ETFs and Invesco VRDO Tax-Free Weekly ETFs level of correlation to its underlying index, as well as the Advisers expectations for each Funds correlation going forward. The Trustees noted that, for each applicable period, the tracking error for all Funds was within the targeted range set forth in the Trusts registration statement and concluded that each Funds correlation to its underlying index and the tracking error for each Fund were within an acceptable range given that Funds particular circumstances.
The Trustees considered the services provided by the Adviser in its oversight of the Funds administrator, custodian and transfer agent. They noted the significant amount of time, effort and resources that had been devoted to this oversight function.
Based on their review, the Trustees concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Funds net expense ratio and unitary advisory fee. The Trustees noted that the annual advisory fee charged to each Fund, as set forth below, is a unitary advisory fee and that the Adviser pays all other operating expenses of each Fund, including the fees payable to the Sub-Advisers for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF, except that each Fund pays its brokerage expenses, taxes, interest (including, for Invesco Senior Loan ETF, interest expenses associated with its line of credit), litigation expenses and other extraordinary expenses (including acquired fund fees and expenses, if any).
0.04%: | Invesco PureBetaTM MSCI USA ETF | |||
0.05%: | Invesco PureBetaTM US Aggregate Bond ETF | |||
0.06%: | Invesco PureBetaTM MSCI USA Small Cap ETF | |||
0.07%: | Invesco PureBetaTM 0-5 Yr US TIPS ETF, Invesco PureBetaTM FTSE Developed ex-North America ETF | |||
0.08%: | Invesco Treasury Collateral ETF | |||
0.10%: | Invesco S&P 500 Minimum Variance ETF | |||
0.13%: | Invesco S&P 500 Enhanced Value ETF, Invesco S&P 500 Momentum ETF |
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
0.14%: | Invesco PureBetaTM FTSE Emerging Markets ETF | |||
0.20%: | Invesco Russell 1000 Equal Weight ETF | |||
0.22%: | Invesco Fundamental Investment Grade Corporate Bond ETF | |||
0.25%: | Invesco 1-30 Laddered Treasury ETF, Invesco S&P 500® ex-Rate Sensitive Low Volatility ETF, Invesco S&P 500® High Beta ETF, Invesco S&P 500® Low Volatility ETF, Invesco S&P MidCap Low Volatility ETF, Invesco S&P SmallCap Low Volatility ETF, Invesco VRDO Tax-Free Weekly ETF | |||
0.28%: | Invesco California AMT-Free Municipal Bond ETF, Invesco National AMT-Free Municipal Bond ETF, Invesco New York AMT-Free Municipal Bond ETF, Invesco Taxable Municipal Bond ETF | |||
0.29%: | Invesco Russell 1000 Enhanced Equal Weight ETF, Invesco S&P International Developed Quality ETF, Invesco S&P SmallCap Consumer Discretionary ETF, Invesco S&P SmallCap Consumer Staples ETF, Invesco S&P SmallCap Energy ETF, Invesco S&P SmallCap Financials ETF, Invesco S&P SmallCap Health Care ETF, Invesco S&P SmallCap Industrials ETF, Invesco S&P SmallCap Information Technology ETF, Invesco S&P SmallCap Materials ETF, Invesco S&P SmallCap Quality ETF, Invesco S&P SmallCap Utilities & Communication Services ETF | |||
0.30%: | Invesco S&P 500® High Dividend Low Volatility ETF, Invesco S&P International Developed High Dividend Low Volatility ETF, Invesco S&P SmallCap High Dividend Low Volatility ETF | |||
0.35%: | Invesco Global Short Term High Yield Bond ETF, Invesco KBW Bank ETF, Invesco KBW High Dividend Yield Financial ETF, Invesco KBW Premium Yield Equity REIT ETF, Invesco KBW Property & Casualty Insurance ETF, Invesco KBW Regional Banking ETF, Invesco Russell 1000 Low Beta Equal Weight ETF, Invesco S&P International Developed Low Volatility ETF, Invesco S&P International Developed Momentum ETF | |||
0.39%: | Invesco S&P 500 Revenue ETF, Invesco S&P MidCap 400 Revenue ETF, Invesco S&P SmallCap 600 Revenue ETF, Invesco S&P Ultra Dividend Revenue ETF | |||
0.45%: | Invesco FTSE International Low Beta Equal Weight ETF, Invesco FTSE RAFI Developed Markets ex-U.S. ETF, Invesco S&P Emerging Markets Low Volatility ETF, Invesco S&P Emerging Markets Momentum ETF | |||
0.49%: | Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF, Invesco FTSE RAFI Emerging Markets ETF | |||
0.50%: | Invesco CEF Income Composite ETF, Invesco Emerging Markets Sovereign Debt ETF, Invesco Fundamental High Yield® Corporate Bond ETF, Invesco International Corporate Bond ETF, Invesco Preferred ETF, Invesco Variable Rate Preferred ETF | |||
0.55%: | Invesco International BuyBack AchieversTM ETF | |||
0.60%: | Invesco DWA SmallCap Momentum ETF | |||
0.65%: | Invesco Senior Loan ETF | |||
0.70%: | Invesco China Technology ETF | |||
0.75%: | Invesco Global Clean Energy ETF, Invesco Global Water ETF | |||
0.80%: | Invesco DWA Developed Markets Momentum ETF | |||
0.90%: | Invesco DWA Emerging Markets Momentum ETF |
The Trustees considered that, effective May 1, 2020, the Adviser had agreed to reduce the unitary advisory fee for Invesco S&P Emerging Markets Low Volatility ETF and Invesco S&P Emerging Markets Momentum ETF from 0.45% to 0.29% of average daily net assets, and to reduce the unitary advisory fee for Invesco S&P International Developed Low Volatility ETF and Invesco S&P International Developed Momentum ETF from 0.35% to 0.25% of average daily net assets.
The Trustees compared each Funds net expense ratio to information compiled by the Adviser from Lipper Inc. databases on the net expense ratios of comparable exchange-traded funds (ETFs), open-end (non-ETF) index funds and open-end (non-ETF) actively-managed funds, as applicable. The Trustees noted that the net expense ratios for certain Funds were equal to or lower than the median
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
net expense ratios of their ETF and open-end index peer funds as illustrated in the table below. The Trustees also noted that the net expense ratios for all of the Funds were lower than the median net expense ratios of their open-end actively-managed peer funds. The Trustees noted that a portion of each Funds operating expenses was attributable to a sub-license fee payable out of the unitary advisory fee charged to that Fund.
Equal to/Lower | Lower | |||||
Equal to/Lower | than Open-End | than Open-End | ||||
than ETF Peer | Index Fund | Active Fund | ||||
Invesco Fund |
Median | Peer Median* | Peer Median | |||
Invesco 1-30 Laddered Treasury ETF |
X | |||||
Invesco California AMT-Free Municipal Bond ETF |
N/A | X | ||||
Invesco CEF Income Composite ETF |
X | N/A | X | |||
Invesco China Technology ETF |
N/A | X | ||||
Invesco DWA Developed Markets Momentum ETF |
X | |||||
Invesco DWA Emerging Markets Momentum ETF |
X | |||||
Invesco DWA SmallCap Momentum ETF |
X | |||||
Invesco Emerging Markets Sovereign Debt ETF |
X | |||||
Invesco FTSE International Low Beta Equal Weight ETF |
X | X | X | |||
Invesco FTSE RAFI Developed Markets ex-U.S. ETF |
X | X | ||||
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF |
X | X | X | |||
Invesco FTSE RAFI Emerging Markets ETF |
X | X | ||||
Invesco Fundamental High Yield® Corporate Bond ETF |
X | X | ||||
Invesco Fundamental Investment Grade Corporate Bond ETF |
X | |||||
Invesco Global Clean Energy ETF |
N/A | X | ||||
Invesco Global Short Term High Yield Bond ETF |
X | N/A | X | |||
Invesco Global Water ETF |
N/A | X | ||||
Invesco International BuyBack AchieversTM ETF |
X | X | X | |||
Invesco International Corporate Bond ETF |
X | |||||
Invesco KBW Bank ETF |
X | X | ||||
Invesco KBW High Dividend Yield Financial ETF |
X | X | ||||
Invesco KBW Premium Yield Equity REIT ETF |
X | X | ||||
Invesco KBW Property & Casualty Insurance ETF |
X | X | ||||
Invesco KBW Regional Banking ETF |
X | X | ||||
Invesco National AMT-Free Municipal Bond ETF |
X | |||||
Invesco New York AMT-Free Municipal Bond ETF |
N/A | X | ||||
Invesco Preferred ETF |
N/A | X | ||||
Invesco PureBetaTM 0-5 Yr US TIPS ETF |
X | |||||
Invesco PureBetaTM FTSE Developed ex-North America ETF |
X | |||||
Invesco PureBetaTM FTSE Emerging Markets ETF |
X | X | ||||
Invesco PureBetaTM MSCI USA ETF |
X | X | X | |||
Invesco PureBetaTM MSCI USA Small Cap ETF |
X | X | X | |||
Invesco PureBetaTM US Aggregate Bond ETF |
X | X | X | |||
Invesco Russell 1000 Enhanced Equal Weight ETF |
X | X | X | |||
Invesco Russell 1000 Equal Weight ETF |
X | X | X | |||
Invesco Russell 1000 Low Beta Equal Weight ETF |
X | X | ||||
Invesco S&P 500 Enhanced Value ETF |
X | X | X | |||
Invesco S&P 500® ex-Rate Sensitive Low Volatility ETF |
X | X | X |
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
Equal to/Lower | Lower | |||||
Equal to/Lower | than Open-End | than Open-End | ||||
than ETF Peer | Index Fund | Active Fund | ||||
Invesco Fund |
Median | Peer Median* | Peer Median | |||
Invesco S&P 500 High Beta ETF |
X | X | X | |||
Invesco S&P 500® High Dividend Low Volatility ETF |
X | X | X | |||
Invesco S&P 500® Low Volatility ETF |
X | X | ||||
Invesco S&P 500 Minimum Variance ETF |
X | X | X | |||
Invesco S&P 500 Momentum ETF |
X | X | ||||
Invesco S&P 500 Revenue ETF |
X | X | ||||
Invesco S&P Emerging Markets Low Volatility ETF |
X | X | X | |||
Invesco S&P Emerging Markets Momentum ETF |
X | X | ||||
Invesco S&P International Developed High Dividend Low Volatility ETF |
X | X | ||||
Invesco S&P International Developed Low Volatility ETF |
X | X | ||||
Invesco S&P International Developed Momentum ETF |
X | |||||
Invesco S&P International Developed Quality ETF |
X | X | ||||
Invesco S&P MidCap 400 Revenue ETF |
X | |||||
Invesco S&P MidCap Low Volatility ETF |
X | |||||
Invesco S&P SmallCap 600 Revenue ETF |
X | X | ||||
Invesco S&P SmallCap Consumer Discretionary ETF |
X | X | ||||
Invesco S&P SmallCap Consumer Staples ETF |
X | X | ||||
Invesco S&P SmallCap Energy ETF |
X | X | ||||
Invesco S&P SmallCap Financials ETF |
X | X | ||||
Invesco S&P SmallCap Health Care ETF |
X | X | ||||
Invesco S&P SmallCap High Dividend Low Volatility ETF |
X | X | X | |||
Invesco S&P SmallCap Industrials ETF |
X | X | ||||
Invesco S&P SmallCap Information Technology ETF |
X | X | X | |||
Invesco S&P SmallCap Low Volatility ETF |
X | X | X | |||
Invesco S&P SmallCap Materials ETF |
X | X | ||||
Invesco S&P SmallCap Quality ETF |
X | X | ||||
Invesco S&P SmallCap Utilities & Communication Services ETF |
X | X | X | |||
Invesco S&P Ultra Dividend Revenue ETF |
X | X | ||||
Invesco Senior Loan ETF |
X | X | ||||
Invesco Taxable Municipal Bond ETF |
N/A | X | ||||
Invesco Treasury Collateral ETF |
X | X | ||||
Invesco Variable Rate Preferred ETF |
X | X | ||||
Invesco VRDO Tax-Free Weekly ETF |
N/A | X |
* | The information provided by the Adviser indicated that certain Funds did not have any comparable open-end index fund peers. Those Funds have been designated in this column with an N/A for not available. |
In response to questions from the Independent Trustees, the Adviser provided supplemental information regarding each of Invesco 1-30 Laddered Treasury ETF, Invesco California AMT-Free Municipal Bond ETF, Invesco DWA Developed Markets Momentum ETF, Invesco Emerging Markets Sovereign Debt ETF, Invesco Global Clean Energy ETF, Invesco Global Water ETF, Invesco International Corporate Bond ETF, Invesco National AMT-Free Municipal Bond ETF, Invesco New York AMT-Free Municipal Bond ETF, Invesco Senior Loan ETF and Invesco VRDO Tax-Free Weekly ETFs advisory fees and total expenses and the Lipper peer data. The Adviser explained its view that the advisory fees and total expenses for these Funds are competitive and generally in line with other comparable funds in the marketplace, particularly in light of the level and nature of services provided and the investment management style of the Adviser. The Trustees also considered the Advisers statements regarding its pricing philosophy and the differing pricing philosophy of certain of the peers.
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
The Trustees noted information, including fee information, provided by the Adviser regarding other investment products to which it provides investment advisory services, including products that have investment strategies comparable to certain of the Funds. The Trustees considered the Advisers explanation of the differences between the services provided to the Funds and to the other investment products it advises, noting the Advisers statement that the management and oversight of the Funds requires substantially more labor and expense.
Based on all the information provided, the Board concluded that each Funds unitary advisory fee was reasonable and appropriate in light of the services provided, the nature of the indexes, the distinguishing factors of the Funds, and the administrative, operational and management oversight costs for the Adviser.
In conjunction with their review of the unitary advisory fees, the Trustees considered information provided by the Adviser on the revenues received by the Adviser under the Investment Advisory Agreement for the Funds. The Trustees reviewed information provided by the Adviser on its overall profitability, as well as the estimated profitability to the Adviser from its relationship to each Fund. The Trustees concluded that the overall and estimated profitability to the Adviser was not unreasonable.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. The Trustees reviewed the information provided by the Adviser as to the extent to which economies of scale may be realized as each Fund grows and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees reviewed each Funds asset size and unitary advisory fee. The Trustees noted that any reduction in fixed costs associated with the management of the Funds would be enjoyed by the Adviser, but a unitary advisory fee provides a level of certainty in expenses for the Funds. The Trustees considered whether the unitary advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund, and concluded that the unitary advisory fee was reasonable and appropriate.
Fall-out Benefits. The Trustees considered that the Adviser identified no additional benefits it receives from its relationship with the Funds, and noted that the Adviser does not have any soft-dollar arrangements. The Trustees also considered benefits received by affiliates of the Adviser that may be directly or indirectly attributed to the Advisers relationship with the Funds, including brokerage fees and advisory fees for money market cash management vehicles. The Board concluded that the advisory fee was reasonable, taking into account any ancillary benefits received by affiliates of the Adviser.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Investment Advisory Agreement for each Fund. No single factor was determinative in the Boards analysis.
Investment Sub-Advisory Agreement
As noted above, the Board of Trustees of the Trust, including the Independent Trustees, approved the continuation of the Sub-Advisory Agreement for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF at a meeting held on April 14, 2020. The review process followed by the Board is described in detail above. In connection with the review of the Sub-Advisory Agreement, the Board considered the factors described below, among others.
Nature, Extent and Quality of Services. The Trustees considered the nature, extent and quality of services provided under the Sub-Advisory Agreement. The Board reviewed the qualifications and background of each Sub-Adviser, the services provided or to be provided by each Sub-Adviser, the investment approach of the Sub-Adviser whose investment personnel manage Invesco Senior Loan ETFs and Invesco Treasury Collateral ETFs assets, the experience and skills of the investment personnel responsible for the day-to-day management of the Funds, and the resources made available to such personnel.
Based on their review, the Trustees concluded that the nature, extent and quality of services provided by the Sub-Advisers to Invesco Senior Loan ETF and Invesco Treasury Collateral ETF under the Sub-Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser and the Sub-Advisers on the sub-advisory fee rates under the Sub-Advisory Agreement. The Trustees noted that the sub-advisory fees charged by the Sub-Advisers under the Sub-Advisory Agreement are consistent with the compensation structure used throughout Invesco when Invescos affiliates provide sub-advisory services for funds managed by other Invesco affiliates. The Board considered how the sub-advisory fees relate to the overall advisory fee for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF and noted that the Adviser compensates the Sub-Advisers from its fee.
61 | ||||
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
The Trustees also reviewed the financial statements provided by Invesco Senior Secured Management, Inc., in connection with the March 12, 2020 Board meeting, and Invesco Advisers, Inc., in connection with the April 14, 2020 meeting, and noted the net income generated by each firm. The Trustees noted that the Adviser compensates the Sub-Advisers from its fee and that the Adviser provided profitability information with respect to Invesco Senior Loan ETF and Invesco Treasury Collateral ETF.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. As part of their review of the Investment Advisory Agreement for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF, the Trustees considered the extent to which economies of scale may be realized as the Funds grow and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees considered whether the sub-advisory fee rates for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF were reasonable in relation to the asset size of the Funds, and concluded that the flat sub-advisory fee rates were reasonable and appropriate.
Fall-out Benefits. The Trustees noted that Invesco Advisers, Inc. receives management fees from money market funds into which the Funds and other Invesco ETFs excess cash and securities lending collateral may be invested, and that the Adviser waives its fees on the excess cash invested under such arrangement in amounts equal to fees received by Invesco Advisers, Inc. on the Funds and other Invesco ETFs excess cash invested in the money market funds. The Trustees noted that the Sub-Advisers had not identified any further benefits that they derived from their relationships with Invesco Senior Loan ETF and Invesco Treasury Collateral ETF and that the Sub-Advisers do not have any soft-dollar arrangements with respect to the Funds. The Board concluded that the sub-advisory fee with respect to each Fund was reasonable, taking into account any ancillary benefits received by the Sub-Advisers.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Sub-Advisory Agreement for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF. No single factor was determinative in the Boards analysis.
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Proxy Voting Policies and Procedures
A description of the Trusts proxy voting policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available, without charge and upon request, by calling (800) 983-0903. This information is also available on the Securities and Exchange Commissions (the Commission) website at www.sec.gov.
Information regarding how each Fund voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, is available, without charge and upon request, by (i) calling (800) 983-0903; or (ii) accessing the Trusts Form N-PX on the Commissions website at www.sec.gov.
Quarterly Portfolios
The Trust files its complete schedule of portfolio holdings for the Funds with the Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Forms N-PORT are available on the Commissions website at www.sec.gov.
Frequency Distribution of Discounts and Premiums
A table showing the number of days the market price of each Funds shares was greater than the Funds net asset value, and the number of days it was less than the Funds net asset value (i.e., premium or discount) for the most recently completed calendar year, and the calendar quarters since that year end (or the life of the Fund, if shorter) may be found at the Funds website at www.invesco.com/ETFs.
©2020 Invesco Capital Management LLC 3500 Lacey Road, Suite 700 |
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Downers Grove, IL 60515 | P-PS-SAR-12 | invesco.com/ETFs |
Invesco Semi-Annual Report to Shareholders
April 30, 2020
| ||||
CQQQ | Invesco China Technology ETF | |||
PIZ | Invesco DWA Developed Markets Momentum ETF | |||
PIE | Invesco DWA Emerging Markets Momentum ETF | |||
PXF | Invesco FTSE RAFI Developed Markets ex-U.S. ETF | |||
PDN | Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF | |||
PXH | Invesco FTSE RAFI Emerging Markets ETF | |||
PBD | Invesco Global Clean Energy ETF | |||
PIO | Invesco Global Water ETF | |||
IPKW | Invesco International BuyBack AchieversTM ETF | |||
CUT | Invesco MSCI Global Timber ETF | |||
CGW | Invesco S&P Global Water Index ETF | |||
IDHQ | Invesco S&P International Developed Quality ETF |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you hold accounts through a financial intermediary, you may contact your financial intermediary to enroll in electronic delivery. Please note that not all financial intermediaries may offer this service.
You may elect to receive all future reports in paper free of charge. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds held with your financial intermediary.
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2 |
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Liquidity Risk Management Program
The Securities and Exchange Commission (SEC) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the Liquidity Rule) in order to promote effective liquidity risk management throughout the open-end investment company industry, thereby reducing the risk that funds will be unable to meet their redemption obligations and mitigating dilution of the interests of fund shareholders. The Funds have adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the Program). The Program is reasonably designed to assess and manage the Funds liquidity risk, which is the risk that the Funds could not meet redemption requests without significant dilution of remaining investors interests in the Funds. The Board of Trustees of the Funds (the Board) has appointed Invesco Capital Management LLC (Invesco), the Funds investment adviser, as the Programs administrator, and Invesco has delegated oversight of the Program to the Liquidity Risk Management Committee (the Committee), which is composed of senior representatives from relevant business groups at Invesco and its affiliates.
As required by the Liquidity Rule, the Program includes policies and procedures providing for an assessment, no less frequently than annually, of the Funds liquidity risk that takes into account, as relevant to the Funds liquidity risk: (1) each Funds investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Funds during both normal and reasonably foreseeable stressed conditions; (3) each Funds holdings of cash and cash equivalents and any borrowing arrangements; (4) the relationship between the Funds portfolio liquidity and the way in which, and the prices and spreads at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants; and (5) the effect of the composition of baskets on the overall liquidity of each Funds portfolio. The Liquidity Rule also requires the classification of each Funds investments into categories that reflect the assessment of their relative liquidity under current market conditions. Each Fund classifies its investments into one of four categories defined in the Liquidity Rule: Highly Liquid, Moderately Liquid, Less Liquid and Illiquid. Funds that are not invested primarily in Highly Liquid Investments that are assets (cash or investments that are reasonably expected to be convertible into cash within three business days without significantly changing the market value of the investment) are required to establish a Highly Liquid Investment Minimum (HLIM), which is the minimum percentage of net assets that must be invested in Highly Liquid Investments. Funds with HLIMs have procedures for addressing HLIM shortfalls, including reporting to the Board and the SEC (on a non-public basis) as required by the Program and the Liquidity Rule. In addition, a Fund may not acquire an investment if, immediately after the acquisition, over 15% of such Funds net assets would consist of Illiquid Investments that are assets (an investment that cannot reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment). The Liquidity Rule and the Program also require reporting to the Board and the SEC (on a non-public basis) if a Funds holdings of Illiquid Investments exceed 15% of such Funds assets.
At a meeting held on March 12, 2020, the Committee presented a report to the Board that addressed the operation of the Program and assessed the Programs adequacy and effectiveness of implementation (the Report). The Report covered the period from December 1, 2018 through December 31, 2019 (the Program Reporting Period).
The Report stated, in relevant part, that during the Program Reporting Period:
| The Program, as adopted and implemented, remained reasonably designed to assess and manage the Funds liquidity risk and was operated effectively to achieve that goal; |
| Each Funds investment strategy remained appropriate for an open-end fund; |
| Each Fund was able to meet requests for redemption without significant dilution of remaining investors interests in the Fund; |
| The Funds did not breach the 15% limit on Illiquid Investments; and |
| The Funds primarily held Highly Liquid Investments and therefore have not adopted an HLIM. |
|
3 |
|
Invesco China Technology ETF (CQQQ)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
4 |
|
Invesco China Technology ETF (CQQQ)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
ADR-American Depositary Receipt
Rts. -Rights
TBA -To Be Announced
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
5 |
|
Invesco China Technology ETF (CQQQ)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poors. |
(b) | Non-income producing security. |
(c) | Security valued using significant unobservable inputs (Level 3). See Note 5. |
(d) | All or a portion of this security was out on loan at April 30, 2020. |
(e) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $10,993,309, which represented 1.61% of the Funds Net Assets. |
(f) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Change in | |||||||||||||||||||||||||||||||||||
Unrealized | Realized | ||||||||||||||||||||||||||||||||||
Value | Purchases | Proceeds | Appreciation | Gain | Value | Dividend | |||||||||||||||||||||||||||||
October 31, 2019 | at Cost | from Sales | (Depreciation) | (Loss) | April 30, 2020 | Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: |
|||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class | $ | - | $ | 6,470,532 | $ | (5,702,172 | ) | $ | - | $ | - | $ | 768,360 | $ | 547 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 20,515,711 | 78,632,399 | (99,148,110 | ) | - | - | - | 89,943 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 6,838,570 | 18,843,773 | (25,681,509 | ) | (395 | ) | (439 | ) | - | 33,931 | |||||||||||||||||||||||||
Invesco Private Government Fund | - | 17,734,237 | (8,588,434 | ) | - | - | 9,145,803 | 5 | |||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total | $ | 27,354,281 | $ | 121,680,941 | $ | (139,120,225 | ) | $ | (395 | ) | $ | (439 | ) | $ | 9,914,163 | $ | 124,426 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
(g) | The rate shown is the 7-day SEC standardized yield as of April 30, 2020. |
(h) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(i) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
This Fund has holdings greater than 10% of net assets in the following country: | ||||
China |
99.94 | % |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
6 |
|
Invesco China Technology ETF (CQQQ)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
7 |
|
Invesco DWA Developed Markets Momentum ETF (PIZ)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
8 |
|
Invesco DWA Developed Markets Momentum ETF (PIZ)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
BR-Bearer Shares
PC-Participation Certificate
REIT-Real Estate Investment Trust
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | All or a portion of this security was out on loan at April 30, 2020. |
(c) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(d) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
(e) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government |
|||||||||||||||||||||||||||||||||||
Money Portfolio, Institutional Class* | $ | - | $ | 1,798,070 | $ | (1,798,070 | ) | $ | - | $ | - | $ | - | $ | 285 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency |
|||||||||||||||||||||||||||||||||||
Portfolio, Institutional Class* |
5,208,612 | 30,794,022 | (36,002,634 | ) | - | - | - | 33,202 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, |
|||||||||||||||||||||||||||||||||||
Institutional Class* |
1,736,204 | 7,292,953 | (9,028,475 | ) | (74 | ) | (608 | ) | - | 12,834 | |||||||||||||||||||||||||
Invesco Private Government Fund |
- | 7,907,892 | (3,993,356 | ) | - | - | 3,914,536 | 2 | |||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total |
$ | 6,944,816 | $ | 47,792,937 | $ | (50,822,535 | ) | $ | (74 | ) | $ | (608 | ) | $ | 3,914,536 | $ | 46,323 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* At April 30, 2020, this security was no longer held.
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
9 |
|
Invesco DWA Developed Markets Momentum ETF (PIZ)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
10 |
|
Invesco DWA Emerging Markets Momentum ETF (PIE)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
11 |
|
Invesco DWA Emerging Markets Momentum ETF (PIE)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
ADR-American Depositary Receipt
NVDR-Non-Voting Depositary Receipt
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $3,695,424, which represented 3.09% of the Funds Net Assets. |
(c) | All or a portion of this security was out on loan at April 30, 2020. |
(d) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
(f) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* | $ | - | $ | 7,709,887 | $ | (7,709,887 | ) | $ | - | $ | - | $ | - | $ | 835 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 107,086 | 2,610,330 | (2,717,416 | ) | - | - | - | 938 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 36,052 | 683,525 | (719,634 | ) | (1 | ) | 58 | - | 350 | ||||||||||||||||||||||||||
Invesco Private Government Fund | - | 1,013,770 | (502,686 | ) | - | - | 511,084 | - | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total |
$ | 143,138 | $ | 12,017,512 | $ | (11,649,623 | ) | $ | (1 | ) | $ | 58 | $ | 511,084 | $ | 2,123 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* At April 30, 2020, this security was no longer held.
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
12 |
|
Invesco DWA Emerging Markets Momentum ETF (PIE)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
13 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
14 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
15 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
16 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
17 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
18 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
19 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
20 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
21 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
22 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
23 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | All or a portion of this security was out on loan at April 30, 2020. |
(c) | Security valued using significant unobservable inputs (Level 3). See Note 5. |
(d) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $6,943,935, which represented less than 1% of the Funds Net Assets. |
(e) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(f) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
(g) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* | $ | - | $ | 16,628,906 | $ | (16,628,906 | ) | $ | - | $ | - | $ | - | $ | 6,081 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 18,667,145 | 157,012,950 | (175,680,095 | ) | - | - | - | 122,800 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 6,222,382 | 37,725,638 | (43,951,427 | ) | (284 | ) | 3,691 | - | 46,410 | ||||||||||||||||||||||||||
Invesco Private Government Fund | - | 78,203,175 | (39,159,850 | ) | - | - | 39,043,325 | 21 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total |
$ | 24,889,527 | $ | 289,570,669 | $ | (275,420,278 | ) | $ | (284 | ) | $ | 3,691 | $ | 39,043,325 | $ | 175,312 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* At April 30, 2020, this security was no longer held.
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
24 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
25 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
26 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
27 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
28 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
29 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
30 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
31 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
32 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
33 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
34 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
35 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
36 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
37 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
38 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
BR-Bearer Shares
CVA-Dutch Certificates
REIT-Real Estate Investment Trust
RSP-Registered Savings Plan Shares
Rts.-Rights
Wts.-Warrants
Notes to Schedule of Investments:
(a) | All or a portion of this security was out on loan at April 30, 2020. |
(b) | Non-income producing security. |
(c) | Security valued using significant unobservable inputs (Level 3). See Note 5. |
(d) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $12,682,965, which represented 4.13% of the Funds Net Assets. |
(e) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class | $ | 138,610 | $ | 9,313,546 | $ | (9,334,476 | ) | $ | - | $ | - | $ | 117,680 | $ | 3,337 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 15,926,925 | 28,479,806 | (44,406,731 | ) | - | - | - | 87,107 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 5,308,975 | 8,025,743 | (13,334,050 | ) | (228 | ) | (440 | ) | - | 33,407 | |||||||||||||||||||||||||
Invesco Private Government Fund |
- | 27,527,461 | (13,640,444 | ) | - | - | 13,887,017 | 7 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total |
$ | 21,374,510 | $ | 73,346,556 | $ | (80,715,701 | ) | $ | (228 | ) | $ | (440 | ) | $ | 14,004,697 | $ | 123,858 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
(f) | The rate shown is the 7-day SEC standardized yield as of April 30, 2020. |
(g) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(h) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
39 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
40 |
|
Invesco FTSE RAFI Emerging Markets ETF (PXH)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
41 |
|
Invesco FTSE RAFI Emerging Markets ETF (PXH)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
42 |
|
Invesco FTSE RAFI Emerging Markets ETF (PXH)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
43 |
|
Invesco FTSE RAFI Emerging Markets ETF (PXH)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
44 |
|
Invesco FTSE RAFI Emerging Markets ETF (PXH)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
ADR-American Depositary Receipt
CPO-Certificates of Ordinary Participation
ETF-Exchange-Traded Fund
NVDR-Non-Voting Depositary Receipt
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
45 |
|
Invesco FTSE RAFI Emerging Markets ETF (PXH)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | All or a portion of this security was out on loan at April 30, 2020. |
(c) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $9,602,167, which represented less than 1% of the Funds Net Assets. |
(d) | Each CPO for Cemex S.A.B. de C.V. represents two Series A shares and one Series B share. |
(e) | Each CPO for Fomento Economico Mexicano, S.A.B. de C.V. represents one Series B share and four Series D shares. |
(f) | Each CPO for Grupo Televisa S.A.B. represents twenty-five Series A shares, twenty-two Series B shares, thirty-five Series D shares and thirty-five Series L shares. |
(g) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Invesco MSCI Saudi Arabia UCITS ETF | $ | - | $ | 3,582,435 | $ | (132,614 | ) | $ | 453,614 | $ | 8,272 | $ | 3,911,707 | $ | - | ||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* | 2,265,414 | 50,096,264 | (52,361,678 | ) | - | - | - | 15,156 | |||||||||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 1,898,097 | 5,400,868 | (7,298,965 | ) | - | - | - | 13,237 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 632,699 | 1,480,882 | (2,113,643 | ) | (35 | ) | 97 | - | 5,035 | ||||||||||||||||||||||||||
Invesco Private Government Fund | - | 2,862,447 | (1,397,041 | ) | - | - | 1,465,406 | 1 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total | $ | 4,796,210 | $ | 63,422,896 | $ | (63,303,941 | ) | $ | 453,579 | $ | 8,369 | $ | 5,377,113 | $ | 33,429 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
(h) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(i) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
46 |
|
Invesco FTSE RAFI Emerging Markets ETF (PXH)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
47 |
|
Invesco Global Clean Energy ETF (PBD)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
48 |
|
Invesco Global Clean Energy ETF (PBD)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
ADR-American Depositary Receipt
BR-Bearer Shares
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | All or a portion of this security was out on loan at April 30, 2020. |
(c) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $2,933,848, which represented 5.16% of the Funds Net Assets. |
(d) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
(f) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* | $ | - | $ | 887,782 | $ | (887,782 | ) | $ | - | $ | - | $ | - | $ | 302 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: |
|||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 6,892,188 | 28,159,631 | (35,051,819 | ) | - | - | - | 41,314 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 2,297,396 | 7,221,660 | (9,518,549 | ) | (200 | ) | (307 | ) | - | 15,859 | |||||||||||||||||||||||||
Invesco Private Government Fund | - | 13,044,172 | (6,159,067 | ) | - | - | 6,885,105 | 4 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total | $ | 9,189,584 | $ | 49,313,245 | $ | (51,617,217 | ) | $ | (200 | ) | $ | (307 | ) | $ | 6,885,105 | $ | 57,479 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
49 |
|
Invesco Global Clean Energy ETF (PBD)(continued)
April 30, 2020
(Unaudited)
Portfolio Composition
Sub-Industry Breakdown (% of the Funds Net Assets)
as of April 30, 2020 |
||||||||
Renewable Electricity |
26.43 | |||||||
Semiconductors |
11.53 | |||||||
Heavy Electrical Equipment |
9.35 | |||||||
Semiconductor Equipment |
9.11 | |||||||
Electrical Components & Equipment |
8.48 | |||||||
Electric Utilities |
6.36 | |||||||
Automobile Manufacturers |
3.80 | |||||||
Oil & Gas Refining & Marketing |
3.22 | |||||||
Sub-Industry Types Each Less Than 3% |
21.76 | |||||||
Money Market Funds Plus Other Assets Less Liabilities | (0.04 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
50 |
|
Invesco Global Water ETF (PIO)
April 30, 2020
(Unaudited)
Schedule of Investments
Investment Abbreviations:
NVDR-Non-Voting Depositary Receipt
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
51 |
|
Invesco Global Water ETF (PIO)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Security valued using significant unobservable inputs (Level 3). See Note 5. |
(c) | All or a portion of this security was out on loan at April 30, 2020. |
(d) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class | $ | - | $ | 831,432 | $ | (761,866 | ) | $ | - | $ | - | $ | 69,566 | $ | 133 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: |
|||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 2,256,993 | 22,521,053 | (24,778,046 | ) | - | - | - | 10,713 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 752,331 | 7,214,024 | (7,966,733 | ) | (74 | ) | 452 | - | 4,210 | ||||||||||||||||||||||||||
Invesco Private Government Fund | - | 188,185 | (92,075 | ) | - | - | 96,110 | - | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total |
$ | 3,009,324 | $ | 30,754,694 | $ | (33,598,720 | ) | $ | (74 | ) | $ | 452 | $ | 165,676 | $ | 15,056 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
(e) | The rate shown is the 7-day SEC standardized yield as of April 30, 2020. |
(f) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(g) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
52 |
|
Invesco International BuyBack AchieversTM ETF (IPKW)
April 30, 2020
(Unaudited)
Schedule of Investments
Investment Abbreviations:
REIT-Real Estate Investment Trust
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
53 |
|
Invesco International BuyBack AchieversTM ETF (IPKW)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $5,621,955, which represented 6.38% of the Funds Net Assets. |
(b) | All or a portion of this security was out on loan at April 30, 2020. |
(c) | Non-income producing security. |
(d) | Security valued using significant unobservable inputs (Level 3). See Note 5. |
(e) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(f) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
(g) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* |
$ | - | $ | 2,836,858 | $ | (2,836,858 | ) | $ | - | $ | - | $ | - | $ | 322 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: |
|||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 7,837,029 | 33,281,797 | (41,118,826 | ) | - | - | - | 31,652 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 2,612,343 | 7,870,351 | (10,480,991 | ) | (53 | ) | (1,650 | ) | - | 12,162 | |||||||||||||||||||||||||
Invesco Private Government Fund |
- | 18,296,261 | (8,641,065 | ) | - | - | 9,655,196 | 5 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total |
$ | 10,449,372 | $ | 62,285,267 | $ | (63,077,740 | ) | $ | (53 | ) | $ | (1,650 | ) | $ | 9,655,196 | $ | 44,141 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
54 |
|
Invesco MSCI Global Timber ETF (CUT)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
55 |
|
Invesco MSCI Global Timber ETF (CUT)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
NVDR-Non-Voting Depositary Receipt
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | Security valued using significant unobservable inputs (Level 3). See Note 5. |
(c) | All or a portion of this security was out on loan at April 30, 2020. |
(d) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Change in | |||||||||||||||||||||||||||||||||||
Unrealized | Realized | ||||||||||||||||||||||||||||||||||
Value | Purchases | Proceeds | Appreciation | Gain | Value | Dividend | |||||||||||||||||||||||||||||
October 31, 2019 | at Cost | from Sales | (Depreciation) | (Loss) | April 30, 2020 | Income | |||||||||||||||||||||||||||||
Invesco India ETF | $ | 73,870 | $ | 170,768 | $ | (96,520 | ) | $ | (57,969 | ) | $ | 28,177 | $ | 118,326 | $ | 1,346 | |||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class | 208,217 | 4,935,733 | (5,083,689 | ) | - | - | 60,261 | 2,085 | |||||||||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 1,898,798 | 25,025,621 | (26,924,419 | ) | - | - | - | 15,173 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 632,933 | 7,568,210 | (8,200,374 | ) | (41 | ) | (728 | ) | - | 6,372 | |||||||||||||||||||||||||
Invesco Private Government Fund | - | 2,761,318 | (1,363,327 | ) | - | - | 1,397,991 | 1 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total | $ | 2,813,818 | $ | 40,461,650 | $ | (41,668,329 | ) | $ | (58,010 | ) | $ | 27,449 | $ | 1,576,578 | $ | 24,977 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | At April 30, 2020, this security was no longer held. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
56 |
|
Invesco MSCI Global Timber ETF (CUT)(continued)
April 30, 2020
(Unaudited)
(e) | The rate shown is the 7-day SEC standardized yield as of April 30, 2020. |
(f) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(g) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
Portfolio Composition
Sector Breakdown (% of the Funds Net Assets)
as of April 30, 2020
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
57 |
|
Invesco S&P Global Water Index ETF (CGW)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
58 |
|
Invesco S&P Global Water Index ETF (CGW)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | All or a portion of this security was out on loan at April 30, 2020. |
(b) | Non-income producing security. |
(c) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(d) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
(e) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Change in | |||||||||||||||||||||||||||||||||||
Unrealized | |||||||||||||||||||||||||||||||||||
Value | Purchases | Proceeds | Appreciation | Realized | Value | Dividend | |||||||||||||||||||||||||||||
October 31, 2019 | at Cost | from Sales | (Depreciation) | Gain | April 30, 2020 | Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* | $ | - | $ | 13,265,039 | $ | (13,265,039 | ) | $ | - | $ | - | $ | - | $ | 3,179 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 5,913,122 | 78,493,521 | (84,406,643 | ) | - | - | - | 50,019 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 1,971,041 | 22,194,630 | (24,165,629 | ) | (139 | ) | 97 | - | 19,630 | ||||||||||||||||||||||||||
Invesco Private Government Fund | - | 31,448,475 | (15,675,460 | ) | - | - | 15,773,015 | 8 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total | $ | 7,884,163 | $ | 145,401,665 | $ | (137,512,771 | ) | $ | (139 | ) | $ | 97 | $ | 15,773,015 | $ | 72,836 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* At April 30, 2020, this security was no longer held.
Portfolio Composition
Industry Breakdown (% of the Funds Net Assets)
as of April 30, 2020
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
59 |
|
Invesco S&P International Developed Quality ETF (IDHQ)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
60 |
|
Invesco S&P International Developed Quality ETF (IDHQ)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
61 |
|
Invesco S&P International Developed Quality ETF (IDHQ)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
62 |
|
Invesco S&P International Developed Quality ETF (IDHQ)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | All or a portion of this security was out on loan at April 30, 2020. |
(b) | Non-income producing security. |
(c) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $421,941, which represented less than 1% of the Funds Net Assets. |
(d) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2K. |
(f) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Change in | |||||||||||||||||||||||||||||||||||
Unrealized | Realized | ||||||||||||||||||||||||||||||||||
Value | Purchases | Proceeds | Appreciation | Gain | Value | Dividend | |||||||||||||||||||||||||||||
October 31, 2019 | at Cost | from Sales | (Depreciation) | (Loss) | April 30, 2020 | Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* | $ | 71,126 | $ | 836,476 | $ | (907,602 | ) | $ | - | $ | - | $ | - | $ | 175 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 590,423 | 4,748,787 | (5,339,210 | ) | - | - | - | 3,257 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 196,808 | 1,189,136 | (1,385,853 | ) | (4 | ) | (87 | ) | - | 1,268 | |||||||||||||||||||||||||
Invesco Private Government Fund | - | 2,817,378 | (1,396,583 | ) | - | - | 1,420,795 | 1 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total | $ | 858,357 | $ | 9,591,777 | $ | (9,029,248 | ) | $ | (4 | ) | $ | (87 | ) | $ | 1,420,795 | $ | 4,701 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* At April 30, 2020, this security was no longer held.
Portfolio Composition
Sector Breakdown (% of the Funds Net Assets)
as of April 30, 2020
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
63 |
|
Statements of Assets and Liabilities
April 30, 2020
(Unaudited)
Invesco China Technology ETF (CQQQ) |
Invesco DWA Developed Markets Momentum ETF (PIZ) |
Invesco DWA Emerging Markets Momentum ETF (PIE) |
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF) | |||||||||||||||||
Assets: | ||||||||||||||||||||
Unaffiliated investments in securities, at value(a) |
$ | 681,355,647 | $ | 133,037,810 | $ | 119,759,234 | $ | 1,095,726,834 | ||||||||||||
Affiliated investments in securities, at value |
9,914,163 | 3,914,536 | 511,084 | 39,043,325 | ||||||||||||||||
Foreign currencies, at value |
915 | 21,604 | 5,969 | 385,823 | ||||||||||||||||
Receivable for: |
||||||||||||||||||||
Dividends |
24,181 | 151,369 | 31,860 | 5,013,383 | ||||||||||||||||
Securities lending |
3,764 | 1,905 | 1,095 | 35,877 | ||||||||||||||||
Investments sold |
- | - | 30,893 | 116 | ||||||||||||||||
Fund shares sold |
- | - | - | 35,728,616 | ||||||||||||||||
Foreign tax reclaims |
- | 601,483 | - | 2,497,387 | ||||||||||||||||
Other assets |
- | - | - | - | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total assets |
691,298,670 | 137,728,707 | 120,340,135 | 1,178,431,361 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Liabilities: | ||||||||||||||||||||
Due to custodian |
- | 461,322 | 164,440 | 3,844,349 | ||||||||||||||||
Due to foreign custodian |
- | - | - | - | ||||||||||||||||
Payable for: |
||||||||||||||||||||
Investments purchased |
- | 210 | - | 34,104,685 | ||||||||||||||||
Collateral upon return of securities loaned |
9,145,803 | 3,914,536 | 511,084 | 39,043,325 | ||||||||||||||||
Fund shares repurchased |
- | - | 30,893 | - | ||||||||||||||||
Accrued unitary management fees |
374,478 | 86,156 | 84,091 | 378,133 | ||||||||||||||||
Accrued advisory fees |
- | - | - | - | ||||||||||||||||
Accrued trustees and officers fees |
- | - | - | - | ||||||||||||||||
Accrued expenses |
- | - | - | - | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities |
9,520,281 | 4,462,224 | 790,508 | 77,370,492 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net Assets | $ | 681,778,389 | $ | 133,266,483 | $ | 119,549,627 | $ | 1,101,060,869 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net assets consist of: | ||||||||||||||||||||
Shares of beneficial interest |
$ | 744,546,181 | $ | 252,204,139 | $ | 232,333,091 | $ | 1,449,674,140 | ||||||||||||
Distributable earnings (loss) |
(62,767,792 | ) | (118,937,656 | ) | (112,783,464 | ) | (348,613,271 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net Assets | $ | 681,778,389 | $ | 133,266,483 | $ | 119,549,627 | $ | 1,101,060,869 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Shares outstanding (unlimited amount authorized, $0.01 par value) |
13,050,000 | 5,400,000 | 7,400,000 | 33,900,000 | ||||||||||||||||
Net asset value |
$ | 52.24 | $ | 24.68 | $ | 16.16 | $ | 32.48 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Market price |
$ | 51.75 | $ | 24.46 | $ | 15.91 | $ | 32.25 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Unaffiliated investments in securities, at cost |
$ | 648,843,437 | $ | 119,349,562 | $ | 105,705,971 | $ | 1,297,456,481 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Affiliated investments in securities, at cost |
$ | 9,914,163 | $ | 3,914,536 | $ | 511,084 | $ | 39,043,325 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Foreign currencies (due to foreign custodian), at cost |
$ | 913 | $ | 21,409 | $ | 5,988 | $ | 383,896 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
(a) Includes securities on loan with an aggregate value of: |
$ | 9,072,265 | $ | 3,700,674 | $ | 488,527 | $ | 36,011,967 | ||||||||||||
|
|
|
|
|
|
|
|
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
64 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN) |
Invesco FTSE RAFI Emerging Markets ETF (PXH) |
Invesco Global Clean Energy ETF (PBD) |
Invesco Global Water ETF (PIO) |
Invesco International BuyBack AchieversTM ETF (IPKW) |
Invesco MSCI Global Timber ETF (CUT) |
Invesco S&P Global Water Index ETF (CGW) |
Invesco S&P International Developed Quality ETF (IDHQ) | |||||||||||||||||||||||||||||||
$ | 305,194,152 | $ | 1,042,285,938 | $ | 56,859,387 | $ | 180,355,343 | $ | 88,125,878 | $ | 74,701,447 | $ | 610,083,808 | $ | 45,604,225 | |||||||||||||||||||||||
14,004,697 | 5,377,113 | 6,885,105 | 165,676 | 9,655,196 | 1,576,578 | 15,773,015 | 1,420,795 | |||||||||||||||||||||||||||||||
- | 36,662 | 251 | 21,154 | - | - | - | 4,546 | |||||||||||||||||||||||||||||||
1,757,025 | 1,216,373 | 34,235 | 326,034 | 637,204 | 63,270 | 292,740 | 126,212 | |||||||||||||||||||||||||||||||
29,288 | 852 | 30,715 | 742 | 3,270 | 4,532 | 5,248 | 849 | |||||||||||||||||||||||||||||||
114,696 | - | 433,279 | 12,681,746 | 8,535,208 | - | - | - | |||||||||||||||||||||||||||||||
- | - | 333 | 41 | - | - | - | 539 | |||||||||||||||||||||||||||||||
269,812 | 2,960 | 40,994 | 309,306 | 272,410 | 154,635 | 1,300,771 | 170,058 | |||||||||||||||||||||||||||||||
- | 5,918 | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
321,369,670 | 1,048,925,816 | 64,284,299 | 193,860,042 | 107,229,166 | 76,500,462 | 627,455,582 | 47,327,224 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
- | 164,858 | 135,198 | - | 253,772 | - | 1,138,221 | 226,373 | |||||||||||||||||||||||||||||||
402,047 | - | - | - | 28,371 | 2,538 | 5,623 | - | |||||||||||||||||||||||||||||||
99,477 | 551,874 | 16 | 13,363,885 | 9,144,881 | - | - | 59 | |||||||||||||||||||||||||||||||
13,887,017 | 1,465,406 | 6,885,105 | 96,110 | 9,655,196 | 1,397,991 | 15,773,015 | 1,420,795 | |||||||||||||||||||||||||||||||
2,989 | - | 391,274 | - | - | - | - | - | |||||||||||||||||||||||||||||||
119,814 | 405,202 | 32,842 | 103,986 | 40,326 | - | - | 9,466 | |||||||||||||||||||||||||||||||
- | - | - | - | - | 31,850 | 240,204 | - | |||||||||||||||||||||||||||||||
- | - | - | - | - | 9,763 | 21,789 | - | |||||||||||||||||||||||||||||||
- | - | - | - | - | 338,568 | 738,522 | - | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
14,511,344 | 2,587,340 | 7,444,435 | 13,563,981 | 19,122,546 | 1,780,710 | 17,917,374 | 1,656,693 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
$ | 306,858,326 | $ | 1,046,338,476 | $ | 56,839,864 | $ | 180,296,061 | $ | 88,106,620 | $ | 74,719,752 | $ | 609,538,208 | $ | 45,670,531 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
$ | 378,696,882 | $ | 1,381,405,220 | $ | 117,712,108 | $ | 198,165,144 | $ | 161,936,085 | $ | 97,878,838 | $ | 526,864,392 | $ | 49,840,147 | |||||||||||||||||||||||
(71,838,556 | ) | (335,066,744 | ) | (60,872,244 | ) | (17,869,083 | ) | (73,829,465 | ) | (23,159,086 | ) | 82,673,816 | (4,169,616 | ) | ||||||||||||||||||||||||
|
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|
|
|
|
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|
|
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|
|
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|
|||||||||||||||||||||||
$ | 306,858,326 | $ | 1,046,338,476 | $ | 56,839,864 | $ | 180,296,061 | $ | 88,106,620 | $ | 74,719,752 | $ | 609,538,208 | $ | 45,670,531 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|||||||||||||||||||||||
11,950,000 | 62,900,000 | 4,225,000 | 6,700,000 | 3,400,000 | 3,200,000 | 17,080,000 | 2,000,000 | |||||||||||||||||||||||||||||||
$ | 25.68 | $ | 16.63 | $ | 13.45 | $ | 26.91 | $ | 25.91 | $ | 23.35 | $ | 35.69 | $ | 22.84 | |||||||||||||||||||||||
|
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|
|
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|
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|
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|
|
|
|||||||||||||||||||||||
$ | 25.46 | $ | 16.43 | $ | 13.39 | $ | 26.88 | $ | 25.78 | $ | 23.23 | $ | 35.66 | $ | 22.98 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
$ | 330,043,991 | $ | 1,177,583,652 | $ | 46,114,262 | $ | 151,792,819 | $ | 109,122,117 | $ | 79,189,231 | $ | 528,212,130 | $ | 48,395,034 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
$ | 14,004,697 | $ | 4,923,500 | $ | 6,885,105 | $ | 165,676 | $ | 9,655,196 | $ | 1,635,988 | $ | 15,773,015 | $ | 1,420,795 | |||||||||||||||||||||||
|
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|
|||||||||||||||||||||||
$ | (660,386 | ) | $ | 35,151 | $ | 300 | $ | 21,129 | $ | (29,321 | ) | $ | (2,522 | ) | $ | (5,569 | ) | $ | 4,546 | |||||||||||||||||||
|
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|
|
|
|
|
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|
|
|
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|
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|
|||||||||||||||||||||||
$ | 12,830,060 | $ | 1,371,021 | $ | 6,432,229 | $ | 88,782 | $ | 9,124,444 | $ | 1,360,112 | $ | 14,095,881 | $ | 1,342,329 | |||||||||||||||||||||||
|
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|
|
|
|
|
|
65 |
|
For the six months ended April 30, 2020
(Unaudited)
Invesco China Technology ETF (CQQQ) |
Invesco DWA Developed Markets Momentum ETF (PIZ) |
Invesco DWA Emerging Markets Momentum ETF (PIE) |
Invesco
FTSE RAFI Developed Markets ex-U.S. ETF (PXF) | |||||||||||||||||
Investment income: | ||||||||||||||||||||
Unaffiliated dividend income |
$ | 1,814,143 | $ | 1,276,734 | $ | 702,200 | $ | 18,327,780 | ||||||||||||
Affiliated dividend income |
547 | 285 | 835 | 6,081 | ||||||||||||||||
Non-cash dividend income |
- | - | 224,840 | 103,193 | ||||||||||||||||
Securities lending income |
30,155 | 18,687 | 3,255 | 158,669 | ||||||||||||||||
Foreign withholding tax |
(3,482 | ) | (140,457 | ) | (65,363 | ) | (1,810,528 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total investment income |
1,841,363 | 1,155,249 | 865,767 | 16,785,195 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Expenses: | ||||||||||||||||||||
Unitary management fees |
2,148,420 | 689,362 | 754,321 | 2,641,056 | ||||||||||||||||
Advisory fees |
- | - | - | - | ||||||||||||||||
Sub-licensing fees |
- | - | - | - | ||||||||||||||||
Accounting & administration fees |
- | - | - | - | ||||||||||||||||
Custodian & transfer agent fees |
- | - | - | - | ||||||||||||||||
Trustees and officers fees |
- | - | - | - | ||||||||||||||||
Other expenses |
- | - | - | - | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total expenses |
2,148,420 | 689,362 | 754,321 | 2,641,056 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Less: Waivers |
(148 | ) | (37 | ) | (126 | ) | (745 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net expenses |
2,148,272 | 689,325 | 754,195 | 2,640,311 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income (loss) |
(306,909 | ) | 465,924 | 111,572 | 14,144,884 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Realized and unrealized gain (loss) from: | ||||||||||||||||||||
Net realized gain (loss) from: |
||||||||||||||||||||
Unaffiliated investment securities |
(5,564,116 | ) | (13,492,674 | ) | (13,886,169 | ) | (57,266,698 | ) | ||||||||||||
Affiliated investment securities |
(439 | ) | (608 | ) | 58 | 3,691 | ||||||||||||||
Unaffiliated in-kind redemptions |
12,213,270 | 31,086 | 3,636,913 | 16,804,795 | ||||||||||||||||
Affiliated in-kind redemptions |
- | - | - | - | ||||||||||||||||
Short Sales |
- | - | - | - | ||||||||||||||||
Foreign currencies |
(28,981 | ) | (13,222 | ) | (407,622 | ) | 561 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net realized gain (loss) |
6,619,734 | (13,475,418 | ) | (10,656,820 | ) | (40,457,651 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Change in net unrealized appreciation (depreciation) of: |
||||||||||||||||||||
Unaffiliated investment securities |
32,156,405 | (6,379,959 | ) | (12,816,120 | ) | (221,335,552 | ) | |||||||||||||
Affiliated investment securities |
(395 | ) | (74 | ) | (1 | ) | (284 | ) | ||||||||||||
Foreign currencies |
264 | 4,627 | (4,918 | ) | 35,318 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Change in net unrealized appreciation (depreciation) |
32,156,274 | (6,375,406 | ) | (12,821,039 | ) | (221,300,518 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net realized and unrealized gain (loss) |
38,776,008 | (19,850,824 | ) | (23,477,859 | ) | (261,758,169 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets resulting from operations |
$ | 38,469,099 | $ | (19,384,900 | ) | $ | (23,366,287 | ) | $ | (247,613,285 | ) | |||||||||
|
|
|
|
|
|
|
|
(a) Net of foreign taxes of $3,715.
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
66 |
|
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN) |
Invesco FTSE RAFI Emerging Markets ETF (PXH) |
Invesco Global Clean Energy ETF (PBD) |
Invesco Global Water ETF (PIO) |
Invesco International BuyBack AchieversTM ETF (IPKW) |
Invesco MSCI Global Timber ETF (CUT) |
Invesco S&P Global Water Index ETF (CGW) |
Invesco S&P International Developed Quality ETF (IDHQ) | |||||||||||||||||||||||||||||||
$ | 4,491,613 | $ | 12,686,829 | $ | 340,519 | $ | 1,319,933 | $ | 1,875,107 | $ | 1,537,818 | $ | 5,049,375 | $ | 662,908 | |||||||||||||||||||||||
3,337 | 15,156 | 302 | 133 | 322 | 3,431 | 3,179 | 175 | |||||||||||||||||||||||||||||||
184,393 | 167,514 | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
173,871 | 13,282 | 276,180 | 32,300 | 14,443 | 20,365 | 82,379 | 4,429 | |||||||||||||||||||||||||||||||
(422,039 | ) | (1,064,322 | ) | (35,448 | ) | (61,551 | ) | (194,926 | ) | (52,771 | ) | (237,828 | ) | (67,011 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
4,431,175 | 11,818,459 | 581,553 | 1,290,815 | 1,694,946 | 1,508,843 | 4,897,105 | 600,501 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
772,256 | 3,133,114 | 209,893 | 710,890 | 349,356 | - | - | 70,190 | |||||||||||||||||||||||||||||||
- | - | - | - | - | 281,186 | 1,713,846 | - | |||||||||||||||||||||||||||||||
- | - | - | - | - | 33,780 | 150,969 | - | |||||||||||||||||||||||||||||||
- | - | - | - | - | 16,750 | 29,827 | - | |||||||||||||||||||||||||||||||
- | - | - | - | - | 24,162 | 20,758 | - | |||||||||||||||||||||||||||||||
- | - | - | - | - | 3,818 | 6,948 | - | |||||||||||||||||||||||||||||||
- | - | - | - | - | 38,048 | 54,422 | - | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
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|
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|
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|
|
|||||||||||||||||||||||
772,256 | 3,133,114 | 209,893 | 710,890 | 349,356 | 397,744 | 1,976,770 | 70,190 | |||||||||||||||||||||||||||||||
|
|
|
|
|
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|
|||||||||||||||||||||||
(465 | ) | (3,969 | ) | (43 | ) | (22 | ) | (47 | ) | (89,224 | ) | (437 | ) | (28 | ) | |||||||||||||||||||||||
|
|
|
|
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|
|
|||||||||||||||||||||||
771,791 | 3,129,145 | 209,850 | 710,868 | 349,309 | 308,520 | 1,976,333 | 70,162 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
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|
|
|
|
|
|
|||||||||||||||||||||||
3,659,384 | 8,689,314 | 371,703 | 579,947 | 1,345,637 | 1,200,323 | 2,920,772 | 530,339 | |||||||||||||||||||||||||||||||
|
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|
|||||||||||||||||||||||
(30,614,224 | ) | (84,225,278 | )(a) | (869,079 | ) | 526,994 | (675,968 | ) | 182,059 | (387,073 | ) | (196,100 | ) | |||||||||||||||||||||||||
(440 | ) | 8,369 | (307 | ) | 452 | (1,650 | ) | 42,822 | 97 | (87 | ) | |||||||||||||||||||||||||||
9,518,311 | 3,833,603 | 473,458 | 1,863,772 | (3,053,998 | ) | 4,133,928 | 29,263,047 | 3,724,531 | ||||||||||||||||||||||||||||||
- | - | - | - | - | (15,373 | ) | - | - | ||||||||||||||||||||||||||||||
3 | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
70,729 | (780,668 | ) | 1,065 | (6,600 | ) | (20,305 | ) | (39,410 | ) | 7,395 | (11,522 | ) | ||||||||||||||||||||||||||
|
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|
|||||||||||||||||||||||
(21,025,621 | ) | (81,163,974 | ) | (394,863 | ) | 2,384,618 | (3,751,921 | ) | 4,304,026 | 28,883,466 | 3,516,822 | |||||||||||||||||||||||||||
|
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|
|||||||||||||||||||||||
(32,278,284 | ) | (201,211,352 | ) | 2,988,697 | (15,308,891 | ) | (22,856,330 | ) | (18,362,943 | ) | (93,570,339 | ) | (6,690,188 | ) | ||||||||||||||||||||||||
(228 | ) | 453,579 | (200 | ) | (74 | ) | (53 | ) | (58,010 | ) | (139 | ) | (4 | ) | ||||||||||||||||||||||||
6,896 | (215,394 | ) | 485 | 6,610 | 17,831 | (6,314 | ) | 18,744 | 2,873 | |||||||||||||||||||||||||||||
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|||||||||||||||||||||||
(32,271,616 | ) | (200,973,167 | ) | 2,988,982 | (15,302,355 | ) | (22,838,552 | ) | (18,427,267 | ) | (93,551,734 | ) | (6,687,319 | ) | ||||||||||||||||||||||||
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|||||||||||||||||||||||
(53,297,237 | ) | (282,137,141 | ) | 2,594,119 | (12,917,737 | ) | (26,590,473 | ) | (14,123,241 | ) | (64,668,268 | ) | (3,170,497 | ) | ||||||||||||||||||||||||
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|||||||||||||||||||||||
$ | (49,637,853 | ) | $ | (273,447,827 | ) | $ | 2,965,822 | $ | (12,337,790 | ) | $ | (25,244,836 | ) | $ | (12,922,918 | ) | $ | (61,747,496 | ) | $ | (2,640,158 | ) | ||||||||||||||||
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|
67 |
|
Statements of Changes in Net Assets
For the six months ended April 30, 2020 and the year ended October 31, 2019
(Unaudited)
Invesco China | Invesco DWA Developed Markets | |||||||||||||||||||
Technology ETF (CQQQ) | Momentum ETF (PIZ) | |||||||||||||||||||
Six Months Ended | Year Ended | Six Months Ended | Year Ended | |||||||||||||||||
April 30, | October 31, | April 30, | October 31, | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Operations: | ||||||||||||||||||||
Net investment income (loss) |
$ | (306,909 | ) | $ | 441,566 | $ | 465,924 | $ | 2,194,732 | |||||||||||
Net realized gain (loss) |
6,619,734 | (50,651,000 | ) | (13,475,418 | ) | 4,613,835 | ||||||||||||||
Change in net unrealized appreciation (depreciation) |
32,156,274 | 131,042,864 | (6,375,406 | ) | 13,766,599 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets resulting from operations |
38,469,099 | 80,833,430 | (19,384,900 | ) | 20,575,166 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Distributions to Shareholders from: | ||||||||||||||||||||
Distributable earnings |
(56,175 | ) | (1,984,086 | ) | (1,189,980 | ) | (2,458,183 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Shareholder Transactions: | ||||||||||||||||||||
Proceeds from shares sold |
167,564,060 | 169,853,400 | 11,553,042 | 89,487,978 | ||||||||||||||||
Value of shares repurchased |
(34,162,982 | ) | (144,279,474 | ) | (33,038,601 | ) | (155,460,383 | ) | ||||||||||||
Transaction fees |
- | - | - | - | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets resulting from |
133,401,078 | 25,573,926 | (21,485,559 | ) | (65,972,405 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets |
171,814,002 | 104,423,270 | (42,060,439 | ) | (47,855,422 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net assets: | ||||||||||||||||||||
Beginning of period |
509,964,387 | 405,541,117 | 175,326,922 | 223,182,344 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
End of period |
$ | 681,778,389 | $ | 509,964,387 | $ | 133,266,483 | $ | 175,326,922 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Changes in Shares Outstanding: | ||||||||||||||||||||
Shares sold |
3,050,000 | 3,800,000 | 400,000 | 3,400,000 | ||||||||||||||||
Shares repurchased |
(650,000 | ) | (3,150,000 | ) | (1,450,000 | ) | (6,050,000 | ) | ||||||||||||
Shares outstanding, beginning of period |
10,650,000 | 10,000,000 | 6,450,000 | 9,100,000 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Shares outstanding, end of period |
13,050,000 | 10,650,000 | 5,400,000 | 6,450,000 | ||||||||||||||||
|
|
|
|
|
|
|
|
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
68 |
|
Invesco DWA Emerging Markets | Invesco FTSE RAFI Developed Markets | Invesco FTSE RAFI Developed Markets | Invesco FTSE RAFI Emerging Markets | |||||||||||||||||||||||||||||||||||
Momentum ETF (PIE) | ex-U.S. ETF (PXF) | ex-U.S. Small-Mid ETF (PDN) | ETF (PXH) | |||||||||||||||||||||||||||||||||||
Six Months Ended | Year Ended | Six Months Ended | Year Ended | Six Months Ended | Year Ended | Six Months Ended | Year Ended | |||||||||||||||||||||||||||||||
April 30, | October 31, | April 30, | October 31, | April 30, | October 31, | April 30, | October 31, | |||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
$ | 111,572 | $ | 3,572,273 | $ | 14,144,884 | $ | 48,275,281 | $ | 3,659,384 | $ | 7,534,531 | $ | 8,689,314 | $ | 43,548,035 | |||||||||||||||||||||||
(10,656,820 | ) | (12,222,762 | ) | (40,457,651 | ) | 22,645,640 | (21,025,621 | ) | 3,743,870 | (81,163,974 | ) | 9,922,253 | ||||||||||||||||||||||||||
(12,821,039 | ) | 36,363,295 | (221,300,518 | ) | 24,153,900 | (32,271,616 | ) | 13,563,895 | (200,973,167 | ) | 42,306,578 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
(23,366,287 | ) | 27,712,806 | (247,613,285 | ) | 95,074,821 | (49,637,853 | ) | 24,842,296 | (273,447,827 | ) | 95,776,866 | |||||||||||||||||||||||||||
|
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|
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|
|
|||||||||||||||||||||||
(1,507,915 | ) | (4,189,151 | ) | (15,945,763 | ) | (52,102,548 | ) | (4,614,022 | ) | (8,100,512 | ) | (11,051,560 | ) | (42,921,358 | ) | |||||||||||||||||||||||
|
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|
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|
|
|||||||||||||||||||||||
27,249,246 | 6,000,666 | 232,570,131 | 193,265,004 | 77,851,708 | 68,979,125 | 122,452,421 | 246,400,978 | |||||||||||||||||||||||||||||||
(51,087,513 | ) | (54,036,505 | ) | (114,140,632 | ) | (265,660,638 | ) | (44,905,825 | ) | (49,476,285 | ) | (68,906,539 | ) | (151,731,342 | ) | |||||||||||||||||||||||
52,580 | 61,725 | 114,534 | 77,695 | 8,820 | 48,223 | 142,146 | 291,802 | |||||||||||||||||||||||||||||||
|
|
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|
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|
|
|
|
|
|||||||||||||||||||||||
(23,785,687 | ) | (47,974,114 | ) | 118,544,033 | (72,317,939 | ) | 32,954,703 | 19,551,063 | 53,688,028 | 94,961,438 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
|||||||||||||||||||||||
(48,659,889 | ) | (24,450,459 | ) | (145,015,015 | ) | (29,345,666 | ) | (21,297,172 | ) | 36,292,847 | (230,811,359 | ) | 147,816,946 | |||||||||||||||||||||||||
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|||||||||||||||||||||||
168,209,516 | 192,659,975 | 1,246,075,884 | 1,275,421,550 | 328,155,498 | 291,862,651 | 1,277,149,835 | 1,129,332,889 | |||||||||||||||||||||||||||||||
|
|
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|
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|
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|
|
|
|||||||||||||||||||||||
$ | 119,549,627 | $ | 168,209,516 | $ | 1,101,060,869 | $ | 1,246,075,884 | $ | 306,858,326 | $ | 328,155,498 | $ | 1,046,338,476 | $ | 1,277,149,835 | |||||||||||||||||||||||
|
|
|
|
|
|
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|
|
|
|
|
|||||||||||||||||||||||
1,450,000 | 350,000 | 6,900,000 | 5,050,000 | 3,000,000 | 2,450,000 | 5,950,000 | 11,700,000 | |||||||||||||||||||||||||||||||
(3,100,000 | ) | (3,250,000 | ) | (3,400,000 | ) | (6,500,000 | ) | (1,750,000 | ) | (1,650,000 | ) | (4,000,000 | ) | (7,150,000 | ) | |||||||||||||||||||||||
9,050,000 | 11,950,000 | 30,400,000 | 31,850,000 | 10,700,000 | 9,900,000 | 60,950,000 | 56,400,000 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|||||||||||||||||||||||
7,400,000 | 9,050,000 | 33,900,000 | 30,400,000 | 11,950,000 | 10,700,000 | 62,900,000 | 60,950,000 | |||||||||||||||||||||||||||||||
|
|
|
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|
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|
|
|
|
|
|
|
69 |
|
Statements of Changes in Net Assets(continued)
For the six months ended April 30, 2020 and the year ended October 31, 2019
(Unaudited)
Invesco Global | Invesco Global | |||||||||||||||||||
Clean Energy ETF (PBD) | Water ETF (PIO) | |||||||||||||||||||
Six Months Ended | Year Ended | Six Months Ended | Year Ended | |||||||||||||||||
April 30, | October 31, | April 30, | October 31, | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Operations: | ||||||||||||||||||||
Net investment income |
$ | 371,703 | $ | 847,494 | $ | 579,947 | $ | 2,605,413 | ||||||||||||
Net realized gain (loss) |
(394,863 | ) | 781,863 | 2,384,618 | 4,335,692 | |||||||||||||||
Change in net unrealized appreciation (depreciation) |
2,988,982 | 6,281,372 | (15,302,355 | ) | 31,301,757 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets resulting from operations |
2,965,822 | 7,910,729 | (12,337,790 | ) | 38,242,862 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Distributions to Shareholders from: | ||||||||||||||||||||
Distributable earnings |
(607,548 | ) | (980,943 | ) | (458,271 | ) | (2,822,348 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Shareholder Transactions: | ||||||||||||||||||||
Proceeds from shares sold |
6,129,112 | - | 3,599,772 | 18,017,976 | ||||||||||||||||
Value of shares repurchased |
(1,323,100 | ) | (6,919,279 | ) | (5,822,037 | ) | (23,042,889 | ) | ||||||||||||
Transaction fees |
812 | 3,159 | 630 | 2,343 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets resulting from share transactions |
4,806,824 | (6,916,120 | ) | (2,221,635 | ) | (5,022,570 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net increase (decrease) in net assets |
7,165,098 | 13,666 | (15,017,696 | ) | 30,397,944 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net assets: | ||||||||||||||||||||
Beginning of period |
49,674,766 | 49,661,100 | 195,313,757 | 164,915,813 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
End of period |
$ | 56,839,864 | $ | 49,674,766 | $ | 180,296,061 | $ | 195,313,757 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Changes in Shares Outstanding: | ||||||||||||||||||||
Shares sold |
400,000 | - | 150,000 | 650,000 | ||||||||||||||||
Shares repurchased |
(100,000 | ) | (600,000 | ) | (200,000 | ) | (850,000 | ) | ||||||||||||
Shares outstanding, beginning of period |
3,925,000 | 4,525,000 | 6,750,000 | 6,950,000 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Shares outstanding, end of period |
4,225,000 | 3,925,000 | 6,700,000 | 6,750,000 | ||||||||||||||||
|
|
|
|
|
|
|
|
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
70 |
|
Invesco International BuyBack | Invesco MSCI Global | Invesco S&P Global | Invesco S&P International | |||||||||||||||||||||||||||||||||||
AchieversTM ETF (IPKW) | Timber ETF (CUT) | Water Index ETF (CGW) | Developed Quality ETF (IDHQ) | |||||||||||||||||||||||||||||||||||
Six Months Ended | Year Ended | Six Months Ended | Year Ended | Six Months Ended | Year Ended | Six Months Ended | Year Ended | |||||||||||||||||||||||||||||||
April 30, | October 31, | April 30, | October 31, | April 30, | October 31, | April 30, | October 31, | |||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||
$ | 1,345,637 | $ | 4,402,560 | $ | 1,200,323 | $ | 4,145,379 | $ | 2,920,772 | $ | 11,012,248 | $ | 530,339 | $ | 833,796 | |||||||||||||||||||||||
(3,751,921 | ) | (37,340,128 | ) | 4,304,026 | 4,519,082 | 28,883,466 | 6,922,670 | 3,516,822 | (340,844 | ) | ||||||||||||||||||||||||||||
(22,838,552 | ) | 41,795,879 | (18,427,267 | ) | (8,948,658 | ) | (93,551,734 | ) | 117,953,369 | (6,687,319 | ) | 5,913,916 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
(25,244,836 | ) | 8,858,311 | (12,922,918 | ) | (284,197 | ) | (61,747,496 | ) | 135,888,287 | (2,640,158 | ) | 6,406,868 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
(1,590,844 | ) | (5,243,213 | ) | (3,739,204 | ) | (4,947,600 | ) | (10,607,913 | ) | (10,958,575 | ) | (514,500 | ) | (916,670 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
4,938,756 | 39,446,681 | - | 3,971,096 | 13,200,165 | 109,681,761 | 26,017,390 | 20,510,517 | |||||||||||||||||||||||||||||||
(31,701,412 | ) | (144,764,111 | ) | (42,750,381 | ) | (38,113,591 | ) | (73,236,873 | ) | (23,998,390 | ) | (24,920,323 | ) | (10,317,948 | ) | |||||||||||||||||||||||
13,190 | 21,030 | 39,687 | 4,108 | 12,386 | 6,647 | 2,016 | 4,267 | |||||||||||||||||||||||||||||||
|
|
|
|
|
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|
|
|
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|
|
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|
|
|||||||||||||||||||||||
(26,749,466 | ) | (105,296,400 | ) | (42,710,694 | ) | (34,138,387 | ) | (60,024,322 | ) | 85,690,018 | 1,099,083 | 10,196,836 | ||||||||||||||||||||||||||
|
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|
|||||||||||||||||||||||
(53,585,146 | ) | (101,681,302 | ) | (59,372,816 | ) | (39,370,184 | ) | (132,379,731 | ) | 210,619,730 | (2,055,575 | ) | 15,687,034 | |||||||||||||||||||||||||
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|
|||||||||||||||||||||||
141,691,766 | 243,373,068 | 134,092,568 | 173,462,752 | 741,917,939 | 531,298,209 | 47,726,106 | 32,039,072 | |||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||||
$ | 88,106,620 | $ | 141,691,766 | $ | 74,719,752 | $ | 134,092,568 | $ | 609,538,208 | $ | 741,917,939 | $ | 45,670,531 | $ | 47,726,106 | |||||||||||||||||||||||
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|
|||||||||||||||||||||||
150,000 | 1,250,000 | - | 150,000 | 320,000 | 3,040,000 | 1,050,000 | 900,000 | |||||||||||||||||||||||||||||||
(1,150,000 | ) | (4,700,000 | ) | (1,650,000 | ) | (1,500,000 | ) | (2,000,000 | ) | (720,000 | ) | (1,000,000 | ) | (450,000 | ) | |||||||||||||||||||||||
4,400,000 | 7,850,000 | 4,850,000 | 6,200,000 | 18,760,000 | 16,440,000 | 1,950,000 | 1,500,000 | |||||||||||||||||||||||||||||||
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|||||||||||||||||||||||
3,400,000 | 4,400,000 | 3,200,000 | 4,850,000 | 17,080,000 | 18,760,000 | 2,000,000 | 1,950,000 | |||||||||||||||||||||||||||||||
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|
71 |
|
Invesco China Technology ETF (CQQQ)
Six Months Ended | |||||||||||||||||||||||||||||||||||
April 30, | Two Months Ended | ||||||||||||||||||||||||||||||||||
2020 | Year Ended October 31, | October 31, | Years Ended August 31, | ||||||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||
Per Share Operating Performance: | |||||||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 47.88 | $ | 40.55 | $ | 49.32 | $ | 55.00 | $ | 39.26 | $ | 29.55 | $ | 38.09 | |||||||||||||||||||||
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|
||||||||||||||||||||||
Net investment income (loss)(a) |
(0.03 | ) | 0.04 | 0.03 | 0.31 | 0.52 | 0.32 | 0.46 | |||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
4.40 | 7.46 | (8.80 | ) | (5.13 | ) | 15.82 | 10.03 | (8.65 | ) | |||||||||||||||||||||||||
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|
||||||||||||||||||||||
Total from investment operations |
4.37 | 7.50 | (8.77 | ) | (4.82 | ) | 16.34 | 10.35 | (8.19 | ) | |||||||||||||||||||||||||
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|
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|
|
||||||||||||||||||||||
Distributions to shareholders from: |
|||||||||||||||||||||||||||||||||||
Net investment income |
(0.01 | ) | (0.17 | ) | - | (0.86 | ) | (0.60 | ) | (0.64 | ) | (0.35 | ) | ||||||||||||||||||||||
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||||||||||||||||||||||
Net asset value at end of period |
$ | 52.24 | $ | 47.88 | $ | 40.55 | $ | 49.32 | $ | 55.00 | $ | 39.26 | $ | 29.55 | |||||||||||||||||||||
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Market price at end of period |
$ | 51.75 | (b) | $ | 47.67 | (b) | $ | 40.81 | (b) | $ | 49.36 | (b) | $ | 55.21 | $ | 39.08 | $ | 29.31 | |||||||||||||||||
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||||||||||||||||||||||
Net Asset Value Total Return(c) |
9.12 | % | 18.59 | % | (17.78 | )% | (9.05 | )% | 42.43 | % | 35.19 | % | (21.62 | )% | |||||||||||||||||||||
Market Price Total Return(c) |
8.57 | % | 17.32 | % | (17.32 | )% | (9.33 | )% | |||||||||||||||||||||||||||
Ratios/Supplemental Data: |
|||||||||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 681,778 | $ | 509,964 | $ | 405,541 | $ | 384,689 | $ | 209,019 | $ | 45,153 | $ | 45,804 | |||||||||||||||||||||
Ratio to average net assets of: |
|||||||||||||||||||||||||||||||||||
Expenses |
0.70 | %(d) | 0.70 | % | 0.70 | %(d) | 0.65 | % | 0.70 | % | 0.70 | % | 0.70 | % | |||||||||||||||||||||
Net investment income (loss) |
(0.10 | )%(d) | 0.09 | % | 0.39 | %(d) | 0.52 | % | 1.20 | % | 0.94 | % | 1.20 | % | |||||||||||||||||||||
Portfolio turnover rate(e) |
14 | % | 80 | % | 4 | % | 21 | % | 10 | % | 48 | % | 32 | % |
(a) | Based on average shares outstanding. |
(b) | The mean between the last bid and ask prices. |
(c) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(d) | Annualized. |
(e) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
72 |
|
Financial Highlights(continued)
Invesco DWA Developed Markets Momentum ETF (PIZ)
Six Months Ended | ||||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 27.18 | $ | 24.53 | $ | 27.30 | $ | 22.29 | $ | 23.36 | $ | 24.49 | ||||||||||||||||||
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Net investment income(a) |
0.07 | 0.30 | 0.24 | 0.36 | 0.35 | 0.27 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(2.39 | ) | 2.70 | (2.68 | ) | 5.05 | (1.04 | ) | (1.15 | ) | ||||||||||||||||||||
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|
|||||||||||||||||||
Total from investment operations |
(2.32 | ) | 3.00 | (2.44 | ) | 5.41 | (0.69 | ) | (0.88 | ) | ||||||||||||||||||||
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|
|||||||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||||||||||||
Net investment income |
(0.18 | ) | (0.35 | ) | (0.33 | ) | (0.40 | ) | (0.38 | ) | (0.25 | ) | ||||||||||||||||||
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|
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Net asset value at end of period |
$ | 24.68 | $ | 27.18 | $ | 24.53 | $ | 27.30 | $ | 22.29 | $ | 23.36 | ||||||||||||||||||
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Market price at end of period(b) |
$ | 24.46 | $ | 27.10 | $ | 24.47 | $ | 27.35 | $ | 22.27 | $ | 23.21 | ||||||||||||||||||
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|
|||||||||||||||||||
Net Asset Value Total Return(c) | (8.54 | )% | 12.31 | % | (9.09 | )% | 24.58 | % | (2.97 | )% | (3.63 | )% | ||||||||||||||||||
Market Price Total Return(c) | (9.09 | )% | 12.25 | % | (9.48 | )% | 24.91 | % | (2.43 | )% | (4.48 | )% | ||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 133,266 | $ | 175,327 | $ | 223,182 | $ | 232,084 | $ | 173,891 | $ | 263,996 | ||||||||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||||||||||||
Expenses |
0.80 | %(d) | 0.81 | % | 0.80 | % | 0.81 | % | 0.81 | % | 0.81 | % | ||||||||||||||||||
Net investment income |
0.54 | %(d) | 1.18 | % | 0.88 | % | 1.46 | % | 1.50 | % | 1.10 | % | ||||||||||||||||||
Portfolio turnover rate(e) |
54 | % | 106 | % | 94 | % | 98 | % | 124 | % | 120 | % |
(a) | Based on average shares outstanding. |
(b) | The mean between the last bid and ask prices. |
(c) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(d) | Annualized. |
(e) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
73 |
|
Financial Highlights(continued)
Invesco DWA Emerging Markets Momentum ETF (PIE)
Six Months Ended | ||||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 18.59 | $ | 16.12 | $ | 19.48 | $ | 16.11 | $ | 16.02 | $ | 18.91 | ||||||||||||||||||
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|
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|
|||||||||||||||||||
Net investment income(a) |
0.01 | 0.36 | (b) | 0.40 | 0.28 | 0.16 | 0.12 | |||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(2.30 | ) | 2.51 | (3.29 | ) | 3.34 | 0.14 | (c) | (2.94 | ) | ||||||||||||||||||||
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|
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|
|||||||||||||||||||
Total from investment operations |
(2.29 | ) | 2.87 | (2.89 | ) | 3.62 | 0.30 | (2.82 | ) | |||||||||||||||||||||
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|
|||||||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||||||||||||
Net investment income |
(0.15 | ) | (0.41 | ) | (0.49 | ) | (0.26 | ) | (0.21 | ) | (0.10 | ) | ||||||||||||||||||
Return of capital |
- | - | - | - | (0.01 | ) | - | |||||||||||||||||||||||
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|
|
|||||||||||||||||||
Total distributions |
(0.15 | ) | (0.41 | ) | (0.49 | ) | (0.26 | ) | (0.22 | ) | (0.10 | ) | ||||||||||||||||||
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|
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|
|||||||||||||||||||
Transaction fees(a) |
0.01 | 0.01 | 0.02 | 0.01 | 0.01 | 0.03 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
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|
|||||||||||||||||||
Net asset value at end of period |
$ | 16.16 | $ | 18.59 | $ | 16.12 | $ | 19.48 | $ | 16.11 | $ | 16.02 | ||||||||||||||||||
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|
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Market price at end of period(d) |
$ | 15.91 | $ | 18.51 | $ | 16.08 | $ | 19.54 | $ | 16.10 | $ | 15.97 | ||||||||||||||||||
|
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|
|
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|
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|
|||||||||||||||||||
Net Asset Value Total Return(e) | (12.37 | )% | 18.23 | % | (15.11 | )% | 22.72 | % | 2.00 | %(c) | (14.78 | )% | ||||||||||||||||||
Market Price Total Return(e) | (13.35 | )% | 18.03 | % | (15.58 | )% | 23.18 | % | 2.25 | % | (14.50 | )% | ||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 119,550 | $ | 168,210 | $ | 192,660 | $ | 212,377 | $ | 183,668 | $ | 196,268 | ||||||||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||||||||||||
Expenses |
0.90 | %(f) | 0.91 | %(g) | 0.90 | % | 0.90 | % | 0.90 | % | 0.90 | % | ||||||||||||||||||
Net investment income |
0.13 | %(f) | 2.13 | %(b)(g) | 2.01 | % | 1.67 | % | 1.04 | % | 0.68 | % | ||||||||||||||||||
Portfolio turnover rate(h) |
72 | % | 158 | % | 163 | % | 174 | % | 160 | % | 176 | % |
(a) | Based on average shares outstanding. |
(b) | Net Investment income per share and the ratio of net investment income to average net assets include a non-cash taxable distribution received during the year. Net investment income per share and the ratio of net investment income to average net assets excluding the non-cash taxable distribution are $0.24 and 1.39%, respectively. |
(c) | Includes settlement proceeds recorded during the period. Had these settlement proceeds not been recorded Net realized and unrealized gain (loss) on investments per share would have been $0.10 and total return would have been lower. |
(d) | The mean between the last bid and ask prices. |
(e) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(f) | Annualized. |
(g) | Ratios include non-recurring costs associated with a proxy statement of 0.01%. |
(h) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
74 |
|
Financial Highlights(continued)
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF)
Six Months Ended | ||||||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 40.99 | $ | 40.04 | $ | 44.66 | $ | 36.74 | $ | 38.60 | $ | 41.20 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net investment income(a) |
0.46 | 1.45 | 1.34 | 1.20 | 1.09 | 1.16 | ||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(8.49 | ) | 1.10 | (4.56 | ) | 7.98 | (1.82 | ) | (2.65 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total from investment operations |
(8.03 | ) | 2.55 | (3.22 | ) | 9.18 | (0.73 | ) | (1.49 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||||||||||||||
Net investment income |
(0.48 | ) | (1.60 | ) | (1.40 | ) | (1.26 | ) | (1.13 | ) | (1.11 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Transaction fees(a) |
0.00 | (b) | 0.00 | (b) | 0.00 | (b) | - | - | - | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net asset value at end of period |
$ | 32.48 | $ | 40.99 | $ | 40.04 | $ | 44.66 | $ | 36.74 | $ | 38.60 | ||||||||||||||||||||
|
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|
|||||||||||||||||||||
Market price at end of period(c) |
$ | 32.25 | $ | 40.86 | $ | 39.98 | $ | 44.81 | $ | 36.68 | $ | 38.34 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net Asset Value Total Return(d) |
(19.52 | )% | 6.58 | % | (7.45 | )% | 25.38 | % | (1.73 | )% | (3.72 | )% | ||||||||||||||||||||
Market Price Total Return(d) |
(19.84 | )% | 6.41 | % | (7.92 | )% | 25.99 | % | (1.24 | )% | (5.55 | )% | ||||||||||||||||||||
Ratios/Supplemental Data: |
||||||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 1,101,061 | $ | 1,246,076 | $ | 1,275,422 | $ | 1,214,850 | $ | 938,650 | $ | 787,536 | ||||||||||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||||||||||||||
Expenses |
0.45 | %(e) | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.46 | % | ||||||||||||||||||||
Net investment income |
2.41 | %(e) | 3.64 | % | 3.02 | % | 2.95 | % | 3.05 | % | 2.87 | % | ||||||||||||||||||||
Portfolio turnover rate(f) |
9 | % | 15 | % | 10 | % | 13 | % | 14 | % | 12 | % |
(a) | Based on average shares outstanding. |
(b) | Amount represents less than $0.005. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | Annualized. |
(f) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
75 |
|
Financial Highlights(continued)
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN)
Six Months Ended | ||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||
(Unaudited) |
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 30.67 | $ | 29.48 | $ | 33.33 | $ | 27.37 | $ | 26.60 | $ | 26.48 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net investment income(a) |
0.33 | 0.70 | 0.75 | 0.59 | 0.53 | 0.46 | ||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(4.93 | ) | 1.24 | (3.66 | ) | 5.99 | 0.86 | 0.12 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total from investment operations. |
(4.60 | ) | 1.94 | (2.91 | ) | 6.58 | 1.39 | 0.58 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||||||||||
Net investment income |
(0.39 | ) | (0.75 | ) | (0.94 | ) | (0.62 | ) | (0.62 | ) | (0.46 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Transaction fees(a) |
0.00 | (b) | 0.00 | (b) | 0.00 | (b) | - | - | - | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net asset value at end of period |
$ | 25.68 | $ | 30.67 | $ | 29.48 | $ | 33.33 | $ | 27.37 | $ | 26.60 | ||||||||||||||||
|
|
|
|
|
|
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|
|
|
|||||||||||||||||
Market price at end of period(c) |
$ | 25.46 | $ | 30.42 | $ | 29.48 | $ | 33.44 | $ | 27.30 | $ | 26.66 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net Asset Value Total Return(d) |
(14.94 | )% | 6.72 | % | (9.05 | )% | 24.36 | % | 5.37 | % | 2.18 | % | ||||||||||||||||
Market Price Total Return(d) |
(14.98 | )% | 5.85 | % | (9.36 | )% | 25.09 | % | 4.87 | % | 0.01 | % | ||||||||||||||||
Ratios/Supplemental Data: |
||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 306,858 | $ | 328,155 | $ | 291,863 | $ | 206,657 | $ | 162,854 | $ | 143,621 | ||||||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||||||||||
Expenses |
0.49 | %(e) | 0.49 | % | 0.49 | % | 0.49 | % | 0.49 | % | 0.50 | % | ||||||||||||||||
Net investment income |
2.32 | %(e) | 2.36 | % | 2.25 | % | 1.98 | % | 2.01 | % | 1.73 | % | ||||||||||||||||
Portfolio turnover rate(f) |
24 | % | 27 | % | 21 | % | 19 | % | 25 | % | 24 | % |
(a) | Based on average shares outstanding. |
(b) | Amount represents less than $0.005. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | Annualized. |
(f) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
76 |
|
Financial Highlights(continued)
Invesco FTSE RAFI Emerging Markets ETF (PXH)
Six Months Ended | ||||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 20.95 | $ | 20.02 | $ | 21.66 | $ | 18.81 | $ | 15.44 | $ | 20.38 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net investment income(a) |
0.13 | 0.72 | 0.73 | 0.57 | 0.42 | 0.53 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(4.28 | ) | 0.92 | (1.66 | ) | 2.81 | 3.37 | (5.02 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total from investment operations |
(4.15 | ) | 1.64 | (0.93 | ) | 3.38 | 3.79 | (4.49 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||||||||||||
Net investment income |
(0.17 | ) | (0.71 | ) | (0.71 | ) | (0.53 | ) | (0.42 | ) | (0.45 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Transaction fees(a) |
0.00 | (b) | 0.00 | (b) | 0.00 | (b) | - | - | - | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net asset value at end of period |
$ | 16.63 | $ | 20.95 | $ | 20.02 | $ | 21.66 | $ | 18.81 | $ | 15.44 | ||||||||||||||||||
|
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|
|
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|
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|
|
|
|||||||||||||||||||
Market price at end of period(c) |
$ | 16.43 | $ | 20.93 | $ | 20.03 | $ | 21.62 | $ | 18.80 | $ | 15.37 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net Asset Value Total Return(d) |
(19.89 | )% | 8.31 | % | (4.44 | )% | 18.10 | % | 25.08 | % | (22.16 | )% | ||||||||||||||||||
Market Price Total Return(d) |
(20.78 | )% | 8.14 | % | (4.22 | )% | 17.94 | % | 25.57 | % | (22.00 | )% | ||||||||||||||||||
Ratios/Supplemental Data: |
||||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 1,046,338 | $ | 1,277,150 | $ | 1,129,333 | $ | 967,201 | $ | 625,398 | $ | 293,398 | ||||||||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||||||||||||
Expenses, after Waivers |
0.49 | %(e)(f) | 0.49 | %(f) | 0.48 | % | 0.48 | %(f) | 0.48 | % | 0.49 | % | ||||||||||||||||||
Expenses, prior to Waivers |
0.49 | %(e)(f) | 0.49 | %(f) | 0.49 | % | 0.49 | %(f) | 0.49 | % | 0.49 | % | ||||||||||||||||||
Net investment income |
1.36 | %(e) | 3.48 | % | 3.30 | % | 2.84 | % | 2.66 | % | 2.88 | % | ||||||||||||||||||
Portfolio turnover rate(g) |
16 | % | 29 | % | 16 | % | 24 | % | 16 | % | 34 | % |
(a) | Based on average shares outstanding. |
(b) | Amount represents less than $0.005. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | Annualized. |
(f) | In addition to the fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the investment companies in which the Fund invests. Estimated investment companies expenses are not expenses that are incurred directly by the Fund. They are expenses that are incurred directly by the investment companies and are deducted from the value of the investment companies the Fund invests in. The effect of the estimated investment companies expenses that the Fund bears indirectly is included in the Funds total return. |
(g) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
77 |
|
Financial Highlights(continued)
Invesco Global Clean Energy ETF (PBD)
Six Months Ended | ||||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 12.66 | $ | 10.97 | $ | 13.08 | $ | 10.65 | $ | 11.46 | $ | 12.52 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net investment income(a) |
0.09 | 0.21 | 0.18 | 0.23 | 0.20 | 0.13 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
0.85 | 1.72 | (2.07 | ) | 2.39 | (0.80 | )(b) | (1.07 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total from investment operations |
0.94 | 1.93 | (1.89 | ) | 2.62 | (0.60 | ) | (0.94 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||||||||||||
Net investment income |
(0.15 | ) | (0.24 | ) | (0.22 | ) | (0.19 | ) | (0.21 | ) | (0.12 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Transaction fees(a) |
0.00 | (c) | 0.00 | (c) | 0.00 | (c) | - | - | - | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net asset value at end of period |
$ | 13.45 | $ | 12.66 | $ | 10.97 | $ | 13.08 | $ | 10.65 | $ | 11.46 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Market price at end of period(d) |
$ | 13.39 | $ | 12.56 | $ | 10.95 | $ | 13.07 | $ | 10.62 | $ | 11.46 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net Asset Value Total Return(e) |
7.49 | % | 17.86 | % | (14.69 | )% | 24.90 | % | (5.29 | )%(b) | (7.51 | )% | ||||||||||||||||||
Market Price Total Return(e) |
7.86 | % | 17.16 | % | (14.78 | )% | 25.17 | % | (5.56 | )% | (8.10 | )% | ||||||||||||||||||
Ratios/Supplemental Data: |
||||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 56,840 | $ | 49,675 | $ | 49,661 | $ | 60,499 | $ | 56,152 | $ | 66,762 | ||||||||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||||||||||||
Expenses |
0.75 | %(f) | 0.77 | %(g) | 0.75 | % | 0.75 | % | 0.75 | % | 0.77 | % | ||||||||||||||||||
Net investment income |
1.33 | %(f) | 1.74 | %(g) | 1.43 | % | 1.98 | % | 1.83 | % | 1.11 | % | ||||||||||||||||||
Portfolio turnover rate(h) |
26 | % | 59 | % | 46 | % | 40 | % | 57 | % | 51 | % |
(a) | Based on average shares outstanding. |
(b) | Includes settlement proceeds recorded during the period. Had these settlement proceeds not been recorded Net realized and unrealized gain (loss) on investments per share would have been $(0.83) and total return would have been lower. |
(c) | Amount represents less than $0.005. |
(d) | The mean between the last bid and ask prices. |
(e) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(f) | Annualized. |
(g) | Ratios include non-recurring costs associated with a proxy statement of 0.02%. |
(h) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
78 |
|
Financial Highlights(continued)
Invesco Global Water ETF (PIO)
Six Months Ended | ||||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 28.94 | $ | 23.73 | $ | 25.27 | $ | 21.32 | $ | 21.89 | $ | 23.35 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net investment income(a) |
0.09 | 0.38 | 0.45 | 0.28 | 0.34 | 0.29 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(2.05 | ) | 5.25 | (1.54 | ) | 3.95 | (0.60 | ) | (1.45 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total from investment operations. |
(1.96 | ) | 5.63 | (1.09 | ) | 4.23 | (0.26 | ) | (1.16 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||||||||||||
Net investment income |
(0.07 | ) | (0.42 | ) | (0.45 | ) | (0.28 | ) | (0.31 | ) | (0.30 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Transaction fees(a) |
0.00 | (b) | 0.00 | (b) | 0.00 | (b) | - | - | - | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net asset value at end of period |
$ | 26.91 | $ | 28.94 | $ | 23.73 | $ | 25.27 | $ | 21.32 | $ | 21.89 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Market price at end of period(c) |
$ | 26.88 | $ | 28.84 | $ | 23.69 | $ | 25.25 | $ | 21.29 | $ | 21.77 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net Asset Value Total Return(d) |
(6.79 | )% | 23.90 | % | (4.45 | )% | 20.01 | % | (1.14 | )% | (5.03 | )% | ||||||||||||||||||
Market Price Total Return(d) |
(6.57 | )% | 23.68 | % | (4.53 | )% | 20.08 | % | (0.78 | )% | (5.35 | )% | ||||||||||||||||||
Ratios/Supplemental Data: |
||||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 180,296 | $ | 195,314 | $ | 164,916 | $ | 200,862 | $ | 188,665 | $ | 241,832 | ||||||||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||||||||||||
Expenses |
0.75 | %(e) | 0.76 | %(f) | 0.75 | % | 0.75 | % | 0.74 | % | 0.76 | % | ||||||||||||||||||
Net investment income |
0.61 | %(e) | 1.45 | %(f) | 1.77 | % | 1.22 | % | 1.62 | % | 1.27 | % | ||||||||||||||||||
Portfolio turnover rate(g) |
15 | % | 32 | % | 34 | % | 34 | % | 67 | % | 78 | % |
(a) | Based on average shares outstanding. |
(b) | Amount represents less than $0.005. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | Annualized. |
(f) | Ratios include non-recurring costs associated with a proxy statement of 0.01%. |
(g) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
79 |
|
Financial Highlights(continued)
Invesco International BuyBack AchieversTM ETF (IPKW)
Six Months Ended | ||||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 32.20 | $ | 31.00 | $ | 35.31 | $ | 27.94 | $ | 27.02 | $ | 25.05 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net investment income(a) |
0.32 | 0.76 | 0.69 | 0.47 | 0.74 | (b) | 0.44 | |||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(6.23 | ) | 1.38 | (4.28 | ) | 7.28 | 0.89 | 1.82 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total from investment operations |
(5.91 | ) | 2.14 | (3.59 | ) | 7.75 | 1.63 | 2.26 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||||||||||||
Net investment income |
(0.38 | ) | (0.94 | ) | (0.73 | ) | (0.38 | ) | (0.71 | ) | (0.29 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Transaction fees(a) |
0.00 | (c) | 0.00 | (c) | 0.01 | - | - | - | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net asset value at end of period |
$ | 25.91 | $ | 32.20 | $ | 31.00 | $ | 35.31 | $ | 27.94 | $ | 27.02 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Market price at end of period(d) |
$ | 25.78 | $ | 32.05 | $ | 30.96 | $ | 35.47 | $ | 28.02 | $ | 26.96 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net Asset Value Total Return(e) |
(18.21 | )% | 7.10 | % | (10.40 | )% | 28.03 | % | 6.25 | % | 9.04 | % | ||||||||||||||||||
Market Price Total Return(e) |
(18.24 | )% | 6.74 | % | (10.96 | )% | 28.24 | % | 6.78 | % | 7.51 | % | ||||||||||||||||||
Ratios/Supplemental Data: |
||||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 88,107 | $ | 141,692 | $ | 243,373 | $ | 197,735 | $ | 92,202 | $ | 58,099 | ||||||||||||||||||
Ratio to average net assets of: |
||||||||||||||||||||||||||||||
Expenses |
0.55 | %(f) | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | ||||||||||||||||||
Net investment income |
2.12 | %(f) | 2.44 | % | 1.90 | % | 1.47 | % | 2.76 | %(b) | 1.68 | % | ||||||||||||||||||
Portfolio turnover rate(g) |
12 | % | 99 | % | 121 | % | 118 | % | 106 | % | 162 | % |
(a) | Based on average shares outstanding. |
(b) | Net investment income per share and the ratio of net investment income to average net assets include a significant dividend received during the period. Net investment income per share and the ratio of net investment income to average net assets excluding the significant dividend are $0.51 and 1.90%, respectively. |
(c) | Amount represents less than $0.005. |
(d) | The mean between the last bid and ask prices. |
(e) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(f) | Annualized. |
(g) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
|
80 |
|
Financial Highlights(continued)
Invesco MSCI Global Timber ETF (CUT)
Six Months Ended | |||||||||||||||||||||||||||||||||||
April 30, | Five Months Ended | ||||||||||||||||||||||||||||||||||
2020 | Year Ended October 31, | October 31, | Years Ended May 31, | ||||||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||
Per Share Operating Performance: |
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Net asset value at beginning of period |
$ | 27.65 | $ | 27.98 | $ | 33.50 | $ | 27.57 | $ | 23.63 | $ | 26.28 | $ | 25.37 | |||||||||||||||||||||
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Net investment income(a) |
0.28 | 0.72 | 0.20 | 0.63 | 0.47 | 0.67 | 0.61 | ||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(3.82 | ) | (0.23 | ) | (5.72 | ) | 5.80 | 3.99 | (2.96 | ) | 0.99 | ||||||||||||||||||||||||
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Total from investment operations |
(3.54 | ) | 0.49 | (5.52 | ) | 6.43 | 4.46 | (2.29 | ) | 1.60 | |||||||||||||||||||||||||
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Distributions to shareholders from: |
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Net investment income |
(0.77 | ) | (0.82 | ) | - | (0.50 | ) | (0.52 | ) | (0.36 | ) | (0.69 | ) | ||||||||||||||||||||||
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Transaction fees(a) |
0.01 | 0.00 | (b) | 0.00 | (b) | - | - | - | - | ||||||||||||||||||||||||||
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Net asset value at end of period |
$ | 23.35 | $ | 27.65 | $ | 27.98 | $ | 33.50 | $ | 27.57 | $ | 23.63 | $ | 26.28 | |||||||||||||||||||||
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Market price at end of period |
$ | 23.23 | (c) | $ | 27.56 | (c) | $ | 27.94 | (c) | $ | 33.54 | (c) | $ | 27.52 | $ | 23.59 | $ | 26.26 | |||||||||||||||||
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Net Asset Value Total Return(d) |
(13.31 | )% | 2.32 | % | (16.48 | )% | 23.42 | % | 19.09 | % | (8.72 | )% | 6.50 | % | |||||||||||||||||||||
Market Price Total Return(d) |
(13.47 | )% | 2.14 | % | (16.70 | )% | 23.79 | % | |||||||||||||||||||||||||||
Ratios/Supplemental Data: |
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Net assets at end of period (000s omitted) |
$ | 74,720 | $ | 134,093 | $ | 173,463 | $ | 236,190 | $ | 190,203 | $ | 163,060 | $ | 199,709 | |||||||||||||||||||||
Ratio to average net assets of: |
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Expenses, after Waivers |
0.55 | %(e) | 0.56 | %(f) | 0.55 | %(e) | 0.55 | % | 0.57 | % | 0.60 | % | 0.70 | % | |||||||||||||||||||||
Expenses, prior to Waivers |
0.71 | %(e) | 0.68 | %(f) | 0.64 | %(e) | 0.67 | % | 0.70 | % | 0.75 | % | 0.76 | % | |||||||||||||||||||||
Net investment income |
2.13 | %(e) | 2.70 | %(f) | 1.50 | %(e) | 2.02 | % | 1.85 | % | 2.83 | % | 2.44 | % | |||||||||||||||||||||
Portfolio turnover rate(g) |
4 | % | 18 | % | 4 | % | 10 | % | 8 | % | 60 | % | 29 | % |
(a) | Based on average shares outstanding. |
(b) | Amount represents less than $0.005. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | Annualized. |
(f) | Ratios include non-recurring costs associated with a proxy statement of 0.01%. |
(g) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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Financial Highlights(continued)
Invesco S&P Global Water Index ETF (CGW)
Six Months Ended | |||||||||||||||||||||||||||||||||||
April 30, | Two Months Ended | ||||||||||||||||||||||||||||||||||
2020 | Year Ended October 31, | October 31, | Years Ended August 31, | ||||||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||
Per Share Operating Performance: |
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Net asset value at beginning of period |
$ | 39.55 | $ | 32.32 | $ | 35.28 | $ | 33.38 | $ | 30.27 | $ | 26.67 | $ | 29.02 | |||||||||||||||||||||
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Net investment income(a) |
0.16 | 0.64 | 0.04 | 0.59 | 0.61 | 0.54 | 0.48 | ||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(3.41 | ) | 7.26 | (3.00 | ) | 1.92 | 2.97 | 3.51 | (2.33 | ) | |||||||||||||||||||||||||
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Total from investment operations |
(3.25 | ) | 7.90 | (2.96 | ) | 2.51 | 3.58 | 4.05 | (1.85 | ) | |||||||||||||||||||||||||
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Distributions to shareholders from: |
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Net investment income |
(0.61 | ) | (0.67 | ) | - | (0.61 | ) | (0.47 | ) | (0.45 | ) | (0.50 | ) | ||||||||||||||||||||||
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Transaction fees(a) |
0.00 | (b) | 0.00 | (b) | 0.00 | (b) | - | - | - | - | |||||||||||||||||||||||||
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Net asset value at end of period |
$ | 35.69 | $ | 39.55 | $ | 32.32 | $ | 35.28 | $ | 33.38 | $ | 30.27 | $ | 26.67 | |||||||||||||||||||||
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Market price at end of period |
$ | 35.66 | (c) | $ | 39.54 | (c) | $ | 32.27 | (c) | $ | 35.23 | (c) | $ | 33.46 | $ | 30.32 | $ | 26.64 | |||||||||||||||||
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Net Asset Value Total Return(d) |
(8.42 | )% | 25.10 | % | (8.39 | )% | 7.51 | % | 12.09 | % | 15.40 | % | (6.47 | )% | |||||||||||||||||||||
Market Price Total Return(d) |
(8.47 | )% | 25.27 | % | (8.40 | )% | 7.09 | % | |||||||||||||||||||||||||||
Ratios/Supplemental Data: |
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Net assets at end of period (000s omitted) |
$ | 609,538 | $ | 741,918 | $ | 531,298 | $ | 594,105 | $ | 610,253 | $ | 432,244 | $ | 346,709 | |||||||||||||||||||||
Ratio to average net assets of: |
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Expenses |
0.58 | %(e) | 0.59 | % | 0.60 | %(e) | 0.62 | % | 0.63 | % | 0.64 | % | 0.64 | % | |||||||||||||||||||||
Net investment income |
0.85 | %(e) | 1.82 | % | 0.67 | %(e) | 1.71 | % | 1.98 | % | 1.93 | % | 1.69 | % | |||||||||||||||||||||
Portfolio turnover rate(f) |
3 | % | 13 | % | 5 | % | 13 | % | 8 | % | 6 | % | 9 | % |
(a) | Based on average shares outstanding. |
(b) | Amount represents less than $0.005. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | Annualized. |
(f) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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Financial Highlights(continued)
Invesco S&P International Developed Quality ETF (IDHQ)
Six Months Ended | ||||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 24.47 | $ | 21.36 | $ | 23.50 | $ | 19.65 | $ | 20.19 | $ | 19.42 | ||||||||||||||||||
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Net investment income(a) |
0.26 | 0.54 | 0.58 | 0.45 | 0.41 | 0.33 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(1.63 | ) | 3.16 | (2.18 | ) | 3.88 | (0.54 | )(b) | 0.75 | |||||||||||||||||||||
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Total from investment operations |
(1.37 | ) | 3.70 | (1.60 | ) | 4.33 | (0.13 | ) | 1.08 | |||||||||||||||||||||
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Distributions to shareholders from: |
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Net investment income |
(0.26 | ) | (0.59 | ) | (0.54 | ) | (0.48 | ) | (0.41 | ) | (0.31 | ) | ||||||||||||||||||
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Transaction fees(a) |
0.00 | (c) | 0.00 | (c) | 0.00 | (c) | - | - | - | |||||||||||||||||||||
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Net asset value at end of period |
$ | 22.84 | $ | 24.47 | $ | 21.36 | $ | 23.50 | $ | 19.65 | $ | 20.19 | ||||||||||||||||||
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Market price at end of period(d) |
$ | 22.98 | $ | 24.53 | $ | 21.31 | $ | 23.71 | $ | 19.61 | $ | 20.14 | ||||||||||||||||||
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Net Asset Value Total Return(e) |
(5.41 | )% | 17.58 | % | (7.00 | )% | 22.36 | % | (0.62 | )%(b) | 5.60 | % | ||||||||||||||||||
Market Price Total Return(e) |
(5.10 | )% | 18.14 | % | (8.05 | )% | 23.70 | % | (0.59 | )% | 4.42 | % | ||||||||||||||||||
Ratios/Supplemental Data: |
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Net assets at end of period (000s omitted) |
$ | 45,671 | $ | 47,726 | $ | 32,039 | $ | 28,203 | $ | 20,628 | $ | 19,180 | ||||||||||||||||||
Ratio to average net assets of: |
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Expenses |
0.29 | %(f) | 0.31 | %(g) | 0.29 | % | 0.31 | % | 0.45 | % | 0.49 | % | ||||||||||||||||||
Net investment income |
2.19 | %(f) | 2.38 | %(g) | 2.47 | % | 2.10 | % | 2.09 | % | 1.66 | % | ||||||||||||||||||
Portfolio turnover rate(h) |
14 | % | 54 | % | 54 | % | 49 | % | 165 | % | 78 | % |
(a) | Based on average shares outstanding. |
(b) | Includes settlement proceeds recorded during the period. Had these settlement proceeds not been recorded Net realized and unrealized gain (loss) on investments per share would have been $(0.71) and total return would have been lower. |
(c) | Amount represents less than $0.005. |
(d) | The mean between the last bid and ask prices. |
(e) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(f) | Annualized. |
(g) | Ratios include non-recurring costs associated with a proxy statement of 0.02%. |
(h) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. For the year ended October 31, 2016, the portfolio turnover calculation includes the value of securities purchased and sold in the effort to realign the Funds portfolio holdings due to the underlying index change. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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Invesco Exchange-Traded Fund Trust II
April 30, 2020
(Unaudited)
NOTE 1Organization
Invesco Exchange-Traded Fund Trust II (the Trust) was organized as a Massachusetts business trust on October 10, 2006 and is authorized to have multiple series of portfolios. The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act). This report includes the following portfolios:
Full Name |
Short Name | |
Invesco China Technology ETF (CQQQ) | China Technology ETF | |
Invesco DWA Developed Markets Momentum ETF (PIZ) | DWA Developed Markets Momentum ETF | |
Invesco DWA Emerging Markets Momentum ETF (PIE) | DWA Emerging Markets Momentum ETF | |
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF) | FTSE RAFI Developed Markets ex-U.S. ETF | |
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN) | FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF | |
Invesco FTSE RAFI Emerging Markets ETF (PXH) | FTSE RAFI Emerging Markets ETF | |
Invesco Global Clean Energy ETF (PBD) | Global Clean Energy ETF | |
Invesco Global Water ETF (PIO) | Global Water ETF | |
Invesco International BuyBack AchieversTM ETF (IPKW) | International BuyBack AchieversTM ETF | |
Invesco MSCI Global Timber ETF (CUT) | MSCI Global Timber ETF | |
Invesco S&P Global Water Index ETF (CGW) | S&P Global Water Index ETF | |
Invesco S&P International Developed Quality ETF (IDHQ) | S&P International Developed Quality ETF |
Each portfolio (each, a Fund, and collectively, the Funds) represents a separate series of the Trust. The shares of the Funds are referred to herein as Shares or Funds Shares. Each Funds Shares are listed and traded on the following exchanges:
Fund |
Exchange | |
China Technology ETF | NYSE Arca, Inc. | |
DWA Developed Markets Momentum ETF | The Nasdaq Stock Market | |
DWA Emerging Markets Momentum ETF | The Nasdaq Stock Market | |
FTSE RAFI Developed Markets ex-U.S. ETF | NYSE Arca, Inc | |
FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF | NYSE Arca, Inc | |
FTSE RAFI Emerging Markets ETF | NYSE Arca, Inc | |
Global Clean Energy ETF | NYSE Arca, Inc | |
Global Water ETF | The Nasdaq Stock Market | |
International BuyBack AchieversTM ETF | The Nasdaq Stock Market | |
MSCI Global Timber ETF | NYSE Arca, Inc. | |
S&P Global Water Index ETF | NYSE Arca, Inc. | |
S&P International Developed Quality ETF | NYSE Arca, Inc. |
The market price of each Share may differ to some degree from a Funds net asset value (NAV). Unlike conventional mutual funds, each Fund issues and redeems Shares on a continuous basis, at NAV, only in a large specified number of Shares, each called a Creation Unit. Creation Units are issued and redeemed principally in exchange for the deposit or delivery of a basket of securities (Deposit Securities). Except when aggregated in Creation Units by Authorized Participants, the Shares are not individually redeemable securities of the Funds.
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The investment objective of each Fund is to seek to track the investment results (before fees and expenses) of its respective index listed below (each, an Underlying Index):
Fund |
Underlying Index | |
China Technology ETF | FTSE China Incl 25% Technology Capped Index | |
DWA Developed Markets Momentum ETF | Dorsey Wright® Developed Markets Technical Leaders Index | |
DWA Emerging Markets Momentum ETF | Dorsey Wright® Emerging Markets Technical Leaders Index | |
FTSE RAFI Developed Markets ex-U.S. ETF | FTSE RAFITM Developed ex U.S. 1000 Index | |
FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF | FTSE RAFITM Developed ex U.S. Mid-Small 1500 Index | |
FTSE RAFI Emerging Markets ETF | FTSE RAFITM Emerging Index | |
Global Clean Energy ETF | WilderHill New Energy Global Innovation Index | |
Global Water ETF | Nasdaq OMX Global Water IndexSM | |
International BuyBack AchieversTM ETF | Nasdaq International BuyBack AchieversTM Index | |
MSCI Global Timber ETF | MSCI ACWI IMI Timber Select Capped Index | |
S&P Global Water Index ETF | S&P Global Water Index | |
S&P International Developed Quality ETF | S&P Quality Developed ex-U.S. LargeMidCap Index |
NOTE 2Significant Accounting Policies
The following is a summary of the significant accounting policies followed by the Funds in preparation of their financial statements.
Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial ServicesInvestment Companies.
A. | Security Valuation - Securities, including restricted securities, are valued according to the following policies: |
A security listed or traded on an exchange (except convertible securities) is generally valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded or, lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked prices from the exchange on which they are principally traded, or at the final settlement price set by such exchange. Swaps and options not listed on an exchange are valued by an independent source. For purposes of determining NAV per Share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investment companies are valued using such companys NAV per share, unless the shares are exchange-traded, in which case they are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a Fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the London world markets. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that Invesco Capital Management LLC (the Adviser) determines are significant and make the closing price unreliable, a Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value
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will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, the potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value exchange-traded equity securities. The mean between the last bid and asked prices may be used to value debt obligations, including corporate loans, and unlisted equity securities.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith following procedures approved by the Board of Trustees. Issuer-specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
Each Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund investments.
Valuations change in response to many factors, including the historical and prospective earnings of the issuer, the value of the issuers assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or adverse investor sentiment generally and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Other Risks |
ADR and GDR Risk. Certain Funds may invest in American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs). ADRs are certificates that evidence ownership of shares of a foreign issuer and are alternatives to purchasing the underlying foreign securities directly in their national markets and currencies. GDRs are certificates issued by an international bank that generally are traded and denominated in the currencies of countries other than the home country of the issuer of the underlying shares. ADRs and GDRs may be subject to certain of the risks associated with direct investments in the securities of foreign companies, such as currency, political, economic and market risks, because their values depend on the performance of the non-dollar denominated underlying foreign securities. Moreover, ADRs and GDRs may not track the price of the underlying foreign securities on which they are based, and their value may change materially at times when U.S. markets are not open for trading.
Authorized Participant Concentration Risk. Only Authorized Participants (APs) may engage in creation or redemption transactions directly with each Fund. Each Fund has a limited number of institutions that may act as APs, and such APs have no obligation to submit creation or redemption orders. Consequently, there is no assurance that APs will establish or maintain an active trading market for the Shares. This risk may be heightened to the extent that securities held by each Fund are traded outside a collateralized settlement system. In that case, APs may be required to post collateral on certain trades on an agency basis (i.e., on behalf of other market participants), which only a limited number of APs may be able to do. In addition, to the extent that APs exit the business or are unable to proceed with creation and/or redemption orders with respect to each Fund and no other AP is able to step forward to create or redeem Creation Units, this may result in a significantly diminished trading market for Shares, and Shares may be more likely to trade at a premium or discount to each Funds NAV and to face trading halts and/or delisting. Investments in non-U.S. securities, which may have lower trading volumes, may increase this risk.
Currency Risk. Because each Funds NAV is determined in U.S. dollars, a Funds NAV could decline if the currency of a non-U.S. market in which the Fund invests depreciates against the U.S. dollar. Generally, an increase in the value of the U.S. dollar against a foreign currency will reduce the value of a security denominated in that foreign currency, thereby decreasing a Funds overall NAV. Exchange rates may be volatile and may change quickly and unpredictably in response to both global economic developments and economic conditions, causing an adverse impact on the Fund. As a result, investors have the potential for losses regardless of the length of time they intend to hold Shares.
Emerging Markets Risk. The risks of foreign investments are usually much greater for emerging markets. Emerging markets are riskier because they develop unevenly and may never fully develop. They are more likely to experience hyperinflation and currency devaluations, which adversely affect returns of U.S. investors. In addition, the securities markets in many of these countries have far lower trading volumes and less liquidity then developed markets. Because these markets are so small, they may be more likely to suffer sharp and frequent price changes or long term price depression due to adverse publicity, investor perceptions or the transactions of a few large investors. Traditional measures of investments value used in the U.S., such as price to earnings ratios, may not apply to certain small markets, making it more difficult to value their securities.
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Equity Risk. Equity risk is the risk that the value of equity securities, including common stocks, may fall due to both changes in general economic conditions that impact the market as a whole, as well as factors that directly relate to a specific company or its industry. Such general economic conditions include changes in interest rates, periods of market turbulence or instability, or general and prolonged periods of economic decline and cyclical change. It is possible that a drop in the stock market may depress the price of most or all of the common stocks that each Fund holds. In addition, equity risk includes the risk that investor sentiment toward one or more industries will become negative, resulting in those investors exiting their investments in those industries, which could cause a reduction in the value of companies in those industries more broadly. The value of a companys common stock may fall solely because of factors, such as an increase in production costs, that negatively impact other companies in the same region, industry or sector of the market. A companys common stock also may decline significantly in price over a short period of time due to factors specific to that company, including decisions made by its management or lower demand for the companys products or services. For example, an adverse event, such as an unfavorable earnings report or the failure to make anticipated dividend payments, may depress the value of common stock.
Foreign Investment Risk. For certain Funds, investments in the securities of non-U.S. issuers involve risks beyond those associated with investments in U.S. securities. Foreign securities may have relatively low market liquidity, greater market volatility, decreased publicly available information and less reliable financial information about issuers, and inconsistent and potentially less stringent accounting, auditing and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Foreign securities also are subject to risk of expropriation, nationalization, political instability or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. Investments in foreign securities also may be subject to dividend withholding or confiscatory taxes, currency blockage and/or transfer restrictions and higher transactional costs. If a Fund invests in securities denominated in foreign currencies, fluctuations in the value of the U.S. dollar relative to the values of other currencies may adversely affect investments in foreign securities and may negatively impact the Funds returns.
Geographic Concentration Risk. A natural or other disaster could occur in a country or geographic region in which a Fund invests, which could affect the economy or particular business operations of companies in that specific country or geographic region and adversely impact the Funds investments in the affected country or region.
Index Risk. Unlike many investment companies, each Fund does not utilize an investing strategy that seeks returns in excess of its Underlying Index. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its Underlying Index, even if that security generally is underperforming. Additionally, each Fund rebalances its portfolio in accordance with its Underlying Index, and, therefore, any changes to the Underlying Indexs rebalance schedule will result in corresponding changes to each Funds rebalance schedule.
Industry Concentration Risk. In following its methodology, each Funds Underlying Index from time to time may be concentrated to a significant degree in securities of issuers operating in a single industry or industry group. To the extent that each Underlying Index concentrates in the securities of issuers in a particular industry or industry group, the corresponding Fund will also concentrate its investments to approximately the same extent. By concentrating its investments in an industry or industry group, each Fund may face more risks than if it were diversified broadly over numerous industries or industry groups. Such industry-based risks, any of which may adversely affect the companies in which each Fund invests, may include, but are not limited to, legislative or regulatory changes, adverse market conditions and/or increased competition within the industry or industry group. In addition, at times, such industry or industry group may be out of favor and underperform other industries, industry groups or the market as a whole.
Investing in ETFs and Other Investment Companies Risk. Because certain Funds may invest in ETFs and other investment companies, a Funds investment performance may depend on the investment performance of the funds in which it invests. An investment in an investment company is subject to the risks associated with that investment company. Certain Funds will pay indirectly a proportional share of the fees and expenses of the investment companies in which it invests (including costs and fees of the investment companies), while continuing to pay its own management fee to the Adviser. As a result, shareholders will absorb duplicate levels of fees with respect to a Funds investments in other investment companies.
Issuer-Specific Changes Risk. The value of an individual security or particular type of security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole.
Market Risk. Securities in the Underlying Index are subject to market fluctuations. You should anticipate that the value of the Shares will decline more or less, in correlation with any decline in value of the securities in the Underlying Index. Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to each Funds NAV.
Non-Correlation Risk. Each Funds return may not match the return of its corresponding Underlying Index for a number of reasons. For example, each Fund incurs operating expenses not applicable to the Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the Funds securities holdings to reflect changes in the composition of its corresponding Underlying Index. Additionally, a Funds use of a representative sampling approach may cause the Fund not to be as well-correlated with the return of its corresponding Underlying Index as would be the case if the Fund purchased all of the securities in its corresponding Underlying Index in the proportions represented in the Underlying Index. In addition, the
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performance of each Fund and its corresponding Underlying Index may vary due to asset valuation differences and differences between each Funds portfolio and its corresponding Underlying Index resulting from legal restrictions, costs or liquidity constraints.
Non-Diversified Fund Risk. Because China Technology ETF, Global Water ETF, International BuyBack AchieversTM ETF, MSCI Global Timber ETF and S&P Global Water Index ETF are non-diversified and can invest a greater portion of their assets in securities of individual issuers than a diversified fund, changes in the market value of a single investment could cause greater fluctuations in Share price than would occur in a diversified fund. This may increase a Funds volatility and cause the performance of a relatively small number of issuers to have a greater impact on a Funds performance.
Portfolio Turnover Risk. Certain Funds may engage in frequent trading of their respective portfolio securities in connection with the rebalancing or adjustment of their respective Underlying Index. A portfolio turnover rate of 200%, for example, is equivalent to a Fund buying and selling all of its securities two times during the course of a year. A high portfolio turnover rate (such as 100% or more) could result in high brokerage costs for a Fund. While a high portfolio turnover rate can result in an increase in taxable capital gain distributions to a Funds shareholders, the Fund will seek to utilize the in-kind creation and redemption mechanism to minimize realization of capital gains to the extent possible.
REIT Risk. REITs are securities that invest substantially all of their assets in real estate, trade like stocks and may qualify for special tax considerations. In addition to the risks pertaining to real estate investments more generally, such as declining property values or rising interest rates, REITs are subject to additional risks. The value of a REIT can depend on the structure of and cash flow generated by the REIT. REITs whose investments are concentrated in a limited number or type of properties, investments or narrow geographic area are subject to the risks affecting those properties or areas to a greater extent than a REIT with less concentrated investments. Further, failure of a company to qualify as a REIT under federal tax law may have adverse consequences to the REITs shareholders. In addition, REITs may have expenses, including advisory and administration expenses, and a REITs shareholders will incur a proportionate share of those expenses.
Sampling Risk. Certain Funds use of a representative sampling approach may result in the Fund holding a smaller number of securities than are in its respective Underlying Index. As a result, an adverse development to an issuer of securities that the Fund holds could result in a greater decline in NAV than would be the case if the Fund held all of the securities in its Underlying Index. To the extent the assets in the Fund are smaller, these risks will be greater.
Small- and Mid-Capitalization Company Risk. Certain Funds invest in securities of small- and mid- capitalization companies, which involves greater risk than customarily is associated with investing in larger, more established companies. These companies securities may be more volatile and less liquid than those of more established companies. These securities may have returns that vary, sometimes significantly, from the overall securities market. Often small- and mid-capitalization companies and the industries in which they focus are still evolving and, as a result, they may be more sensitive to changing market conditions.
C. | Investment Transactions and Investment Income - Investment transactions are accounted for on a trade date basis. Realized gains and losses from the sale or disposition of securities are computed on the specific identified cost basis. Interest income is recorded on an accrual basis from settlement date. Pay-in-kind interest income and non-cash dividend income received in the form of securities in-lieu of cash are recorded at the fair value of the securities received. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Dividend income from REITs is recorded based on the income included in the distributions received from the REIT investments using published REIT classifications, including some management estimates when actual amounts are not available. Distributions received in excess of this estimated amount are recorded as a reduction of the cost of investments or reclassified to capital gains. The actual amounts of income, return of capital, and capital gains are only determined by each REIT after its fiscal year-end, and may differ from the estimated amounts. Realized gains, dividends and interest received by a Fund may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. |
The Funds may periodically participate in litigation related to each Funds investments. As such, the Funds may receive proceeds from litigation settlements. Any proceeds received are included in the Statements of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statements of Operations and the Statements of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of each Funds NAV and, accordingly, they reduce each Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statements of Operations and the Statements of Changes in Net Assets, or the net investment income per share and the ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between each Fund and the Adviser.
D. | Country Determination - For the purposes of presentation in the Schedules of Investments, the Adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include whether each Funds Underlying Index has made a country determination and may include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total |
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revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
E. | Dividends and Distributions to Shareholders |
Each Fund (except for China Technology ETF, MSCI Global Timber ETF and S&P Global Water Index ETF) declares and pays dividends from net investment income, if any, to its shareholders quarterly and records such dividends on the ex-dividend date. China Technology ETF, MSCI Global Timber ETF and S&P Global Water Index ETF each declares and pays dividends from net investment income, if any, to its shareholders annually and records such dividends on the ex-dividend date. Generally, each Fund distributes net realized taxable capital gains, if any, annually in cash and records them on the ex-dividend date. Such distributions on a tax basis are determined in conformity with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America (GAAP). Distributions in excess of tax basis earnings and profits, if any, are reported in such Funds financial statements as a tax return of capital at fiscal year-end.
F. | Federal Income Taxes - Each Fund intends to comply with the provisions of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), applicable to regulated investment companies and to distribute substantially all of the Funds taxable earnings to its shareholders. As such, the Funds will not be subject to federal income taxes on otherwise taxable income (including net realized gains) that is distributed to the shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
Each Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed each Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing book and tax treatments for in-kind transactions, losses deferred due to wash sales, and passive foreign investment company adjustments, if any.
The Funds file U.S. federal tax returns and tax returns in certain other jurisdictions. Generally, a Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
G. | Expenses - Each Fund (except for MSCI Global Timber ETF and S&P Global Water Index ETF) has agreed to pay an annual unitary management fee to the Adviser. Out of the unitary management fee, the Adviser has agreed to pay for substantially all expenses of the Funds, including the costs of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses. |
MSCI Global Timber ETF and S&P Global Water Index ETF are responsible for all of their expenses, including the investment advisory fees, costs of transfer agency, custody, fund administration, legal, audit and other services, interest, taxes, brokerage commissions and other expenses connected with executions of portfolio transactions, licensing fees related to its respective Underlying Index, any distribution fees or expenses, litigation expenses, fees payable to the Trusts Board members and officers who are not interested persons (as defined in the 1940 Act) of the Trust (the Independent Trustees) or the Adviser, expenses incurred in connection with the Board members services, including travel expenses and legal fees of counsel for the Independent Trustees, acquired fund fees and expenses, if any, and extraordinary expenses.
Expenses of the Trust that are excluded from a Funds unitary management fee (if applicable) and are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that are excluded from each Funds unitary management fee (if applicable) and that are not readily identifiable to a specific Fund are allocated in such a manner as deemed equitable, taking into consideration the nature and type of expense and the relative net assets of each Fund.
To the extent a Fund invests in other investment companies, the expenses shown in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the investment companies in which it invests. The effects of such investment companies expenses are included in the realized and unrealized gain or loss on the investments in the investment companies.
H. | Accounting Estimates - The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements, including estimates and assumptions related to taxation. Actual results could differ from these estimates. In addition, the Funds monitor for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
I. | Indemnifications - Under the Trusts organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. Each Board member who is not an interested person (as defined in the 1940 Act) of the Trust (each, an Independent Trustee) is also indemnified against certain liabilities arising out of the performance of their duties to the Trust pursuant to an Indemnification Agreement between such trustee and the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general |
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indemnification clauses. The Trusts maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. However, based on experience, the Trust believes the risk of loss to be remote. |
J. | Foreign Currency Translations - Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. Each Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statements of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on each Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period-end, resulting from changes in exchange rates. |
Each Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which each Fund invests.
K. | Securities Lending - Each Fund may participate in securities lending and may loan portfolio securities having a market value up to one-third of the Funds total assets. Such loans are secured by cash collateral equal to no less than 102% (105% for international securities) of the market value of the loaned securities determined daily by the securities lending provider. Cash collateral received in connection with these loans is generally invested in an affiliated money market fund and is shown as such on the Schedules of Investments. Each Fund bears the risk of loss with respect to the investment of collateral. It is the policy of these Funds to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. When loaning securities, each Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. Lending securities entails a risk of loss to each Fund if, and to the extent that, the market value of the securities loaned were to increase, and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. The securities loaned are subject to termination at the option of the borrower or each Fund. Upon termination, the borrower will return to each Fund the securities loaned and each Fund will return the collateral. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. Each Fund could experience delays and costs in gaining access to the collateral and the securities may lose value during the delay which could result in potential losses to each Fund. Some of these losses may be indemnified by the lending agent. Each Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. For Funds that participated in securities lending, dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, are included in Securities lending income on the Statements of Operations. The aggregate value of securities out on loan, if any, is shown on the Statements of Assets and Liabilities. |
NOTE 3Investment Advisory Agreements and Other Agreements
The Trust has entered into Investment Advisory Agreements with the Adviser on behalf of each Fund, pursuant to which the Adviser has overall responsibility for the selection and ongoing monitoring of the Funds investments, managing the Funds business affairs and providing certain clerical, bookkeeping and other administrative services.
Pursuant to an Investment Advisory Agreement, each Fund listed below accrues daily and pays monthly to the Adviser an annual unitary management fee. Out of the unitary management fee, the Adviser has agreed to pay for substantially all expenses of the Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if
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any, and other extraordinary expenses. The annual unitary management fee paid by each Fund to the Adviser is equal to a percentage of each Funds average daily net assets as follows:
Unitary Management Fees | ||
(as a % of average daily net assets) | ||
China Technology ETF |
0.70% | |
DWA Developed Markets Momentum ETF |
0.80% | |
DWA Emerging Markets Momentum ETF |
0.90% | |
FTSE RAFI Developed Markets ex-U.S. ETF |
0.45% | |
FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF |
0.49% | |
FTSE RAFI Emerging Markets ETF |
0.49% | |
Global Clean Energy ETF |
0.75% | |
Global Water ETF |
0.75% | |
International BuyBack AchieversTM ETF |
0.55% | |
S&P International Developed Quality ETF |
0.29% |
The Adviser has agreed to waive a portion of its unitary management fee to prevent the expenses (excluding interest expenses, brokerage commissions and other trading expenses, acquired fund fees and expenses, if any, taxes, and litigation expenses and other extraordinary expenses) of China Technology ETF from exceeding such Funds unitary management fee through at least May 18, 2020. Neither the Adviser nor the Trust can discontinue the agreement prior to its expiration.
Pursuant to another Investment Advisory Agreement, each of the following Funds accrues daily and pays monthly to the Adviser an annual fee equal to a percentage of its average daily net assets as follows:
Management Fees | ||
(as a % of average daily net assets) | ||
MSCI Global Timber ETF |
0.50% | |
S&P Global Water Index ETF |
0.50% |
The Adviser has contractually agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of each of those Funds (excluding interest expenses, brokerage commissions and other trading expenses, sub-licensing fees, offering costs, taxes, acquired fund fees and expenses, if any, and extraordinary expenses) from exceeding the percentage of the Funds average daily net assets per year (the Expense Cap) shown in the table below through at least August 31, 2022. Neither the Adviser nor the Funds can discontinue the agreement prior to its expiration.
Expense Cap | ||
MSCI Global Timber ETF |
0.55% | |
S&P Global Water Index ETF |
0.63% |
Further, the Adviser agrees to reimburse MSCI Global Timber ETF in the amount equal to the licensing fees that the Fund pays that cause the Funds operating expenses (excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses) to exceed 0.55% of its average daily net assets, through at least December 31, 2020. Through April 6, 2020, the Adviser agreed to reimburse the S&P Global Water Index ETF in the amount equal to the licensing fees that the Fund paid that caused the Funds operating expenses (excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses) to exceed 0.63% of the Funds average daily net assets.
Additionally, through at least August 31, 2022, the Adviser has contractually agreed to waive a portion of each Funds management fee in an amount equal to 100% of the net advisory fees an affiliate of the Adviser receives that are attributable to the Funds investments of otherwise uninvested cash in money market funds managed by that affiliate (excluding investments of cash collateral from securities lending). There is no guarantee that the Adviser will extend the waiver of these fees past that date.
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For the six-month period ended April 30, 2020, the Adviser waived fees and/or paid Fund expenses for each Fund in the following amounts:
China Technology ETF |
$ | 148 | ||
DWA Developed Markets Momentum ETF |
37 | |||
DWA Emerging Markets Momentum ETF |
126 | |||
FTSE RAFI Developed Markets ex-U.S. ETF |
745 | |||
FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF |
465 | |||
FTSE RAFI Emerging Markets ETF |
3,969 | |||
Global Clean Energy ETF |
43 | |||
Global Water ETF |
22 | |||
International BuyBack AchieversTM ETF |
47 | |||
MSCI Global Timber ETF |
89,224 | |||
S&P Global Water Index ETF |
437 | |||
S&P International Developed Quality ETF |
28 |
The fees waived and/or expenses borne by the MSCI Global Timber ETF and S&P Global Water Index ETF, pursuant to the Expense Cap, are subject to recapture by the Adviser up to three years from the date the fees were waived or the expense were incurred, but no recapture payment will be made by the Funds if it would result in the Funds exceeding (i) the Expense Cap or (ii) the expense cap in effect at the time the fees and/or expenses subject to recapture were waived and/or borne by the Adviser.
For the following Fund, the amounts available for potential recapture by the Adviser and the expiration schedule at April 30, 2020 are as follows:
Total | ||||||||||
Potential | ||||||||||
Recapture | Potential Recapture Amounts Expiring | |||||||||
Amounts | 5/31/21 | 10/31/21 | 10/31/22 | 10/31/23 | ||||||
MSCI Global Timber ETF |
$409,529 | $53,954 | $76,595 | $190,541 | $88,439 |
The Trust has entered into a Distribution Agreement with Invesco Distributors, Inc. (the Distributor), which serves as the distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in the Shares. The Fund are not charged any fees pursuant to the Distribution Agreement. The Distributor is an affiliate of the Adviser.
The Adviser has entered into a licensing agreement for each Fund with the following entities (each, a Licensor):
Fund |
Licensor | |
China Technology ETF | FTSE International Ltd. | |
DWA Developed Markets Momentum ETF | Dorsey Wright & Associates, LLC | |
DWA Emerging Markets Momentum ETF | Dorsey Wright & Associates, LLC | |
FTSE RAFI Developed Markets ex-U.S. ETF | FTSE International Ltd. | |
FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF | FTSE International Ltd. | |
FTSE RAFI Emerging Markets ETF | FTSE International Ltd. | |
Global Clean Energy ETF | WilderHill New Energy Finance, LLC | |
Global Water ETF | Nasdaq, Inc. | |
International BuyBack AchieversTM ETF | Nasdaq, Inc. | |
MSCI Global Timber ETF | MSCI, Inc. | |
S&P Global Water Index ETF | S&P Dow Jones Indices LLC | |
S&P International Developed Quality ETF | S&P Dow Jones Indices LLC |
Each Underlying Index name trademark is owned by its respective Licensor. These trademarks have been licensed to the Adviser for use by the Funds. Each Fund is entitled to use its Underlying Index pursuant to the Trusts sub-licensing agreement with the Adviser. The Funds are not sponsored, endorsed, sold or promoted by the Licensors, and the Licensors make no representation regarding the advisability of investing in any of the Funds.
The Trust has entered into service agreements whereby The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian, fund accountant and transfer agent for each Fund.
NOTE 4Security Transactions with Affiliated Funds
Each Fund is permitted to purchase or sell securities from or to certain other affiliated funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by each Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a
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common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price.
For the six-month period ended April 30, 2020, the following Fund engaged in transactions with affiliates as listed below:
Securities Purchases | Securities Sales | Net Realized Gains | ||||
Global Water ETF |
$1,469,586 | $- | $- |
NOTE 5Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect a Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 2020. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
China Technology ETF |
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Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 262,258,462 | $ | 419,097,185 | $ | 0 | $ | 681,355,647 | ||||||||
Money Market Funds |
768,360 | 9,145,803 | - | 9,914,163 | ||||||||||||
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Total Investments |
$ | 263,026,822 | $ | 428,242,988 | $ | 0 | $ | 691,269,810 | ||||||||
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DWA Developed Markets Momentum ETF |
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Investments in Securities |
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Common Stocks & Other Equity Interests |
$ | 133,037,810 | $ | - | $ | - | $ | 133,037,810 | ||||||||
Money Market Funds |
- | 3,914,536 | - | 3,914,536 | ||||||||||||
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|
|
|
|
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|
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Total Investments |
$ | 133,037,810 | $ | 3,914,536 | $ | - | $ | 136,952,346 | ||||||||
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DWA Emerging Markets Momentum ETF |
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Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 23,166,797 | $ | 96,592,437 | $ | - | $ | 119,759,234 | ||||||||
Money Market Funds |
- | 511,084 | - | 511,084 | ||||||||||||
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|
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|
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Total Investments |
$ | 23,166,797 | $ | 97,103,521 | $ | - | $ | 120,270,318 | ||||||||
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FTSE RAFI Developed Markets ex-U.S. ETF |
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Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 1,095,196,361 | $ | 530,473 | $ | 0 | $ | 1,095,726,834 | ||||||||
Money Market Funds |
- | 39,043,325 | - | 39,043,325 | ||||||||||||
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Total Investments |
$ | 1,095,196,361 | $ | 39,573,798 | $ | 0 | $ | 1,134,770,159 | ||||||||
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FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF |
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Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 143,689,297 | $ | 161,493,917 | $ | 10,938 | $ | 305,194,152 | ||||||||
Money Market Funds |
117,680 | 13,887,017 | - | 14,004,697 | ||||||||||||
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Total Investments |
$ | 143,806,977 | $ | 175,380,934 | $ | 10,938 | $ | 319,198,849 | ||||||||
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Level 1 | Level 2 | Level 3 | Total | |||||||||||||
FTSE RAFI Emerging Markets ETF |
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Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 331,193,649 | $ | 689,867,640 | $ | - | $ | 1,021,061,289 | ||||||||
Exchange-Traded Funds |
25,136,356 | - | - | 25,136,356 | ||||||||||||
Money Market Funds |
- | 1,465,406 | - | 1,465,406 | ||||||||||||
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Total Investments |
$ | 356,330,005 | $ | 691,333,046 | $ | - | $ | 1,047,663,051 | ||||||||
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Global Clean Energy ETF |
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Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 56,859,387 | $ | - | $ | - | $ | 56,859,387 | ||||||||
Money Market Funds |
- | 6,885,105 | - | 6,885,105 | ||||||||||||
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Total Investments |
$ | 56,859,387 | $ | 6,885,105 | $ | - | $ | 63,744,492 | ||||||||
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Global Water ETF |
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Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 180,299,164 | $ | - | $ | 56,179 | $ | 180,355,343 | ||||||||
Money Market Funds |
69,566 | 96,110 | - | 165,676 | ||||||||||||
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Total Investments |
$ | 180,368,730 | $ | 96,110 | $ | 56,179 | $ | 180,521,019 | ||||||||
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International BuyBack AchieversTM ETF |
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Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 59,316,691 | $ | 28,809,187 | $ | 0 | $ | 88,125,878 | ||||||||
Money Market Funds |
- | 9,655,196 | - | 9,655,196 | ||||||||||||
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Total Investments |
$ | 59,316,691 | $ | 38,464,383 | $ | 0 | $ | 97,781,074 | ||||||||
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MSCI Global Timber ETF |
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Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 74,690,129 | $ | - | $ | 11,318 | $ | 74,701,447 | ||||||||
Exchange-Traded Funds |
118,326 | - | - | 118,326 | ||||||||||||
Money Market Funds |
60,261 | 1,397,991 | - | 1,458,252 | ||||||||||||
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|
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Total Investments |
$ | 74,868,716 | $ | 1,397,991 | $ | 11,318 | $ | 76,278,025 | ||||||||
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S&P Global Water Index ETF |
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Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 610,083,808 | $ | - | $ | - | $ | 610,083,808 | ||||||||
Money Market Funds |
- | 15,773,015 | - | 15,773,015 | ||||||||||||
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Total Investments |
$ | 610,083,808 | $ | 15,773,015 | $ | - | $ | 625,856,823 | ||||||||
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S&P International Developed Quality ETF |
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Investments in Securities | ||||||||||||||||
Common Stocks & Other Equity Interests |
$ | 45,604,225 | $ | - | $ | - | $ | 45,604,225 | ||||||||
Money Market Funds |
- | 1,420,795 | - | 1,420,795 | ||||||||||||
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|
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Total Investments |
$ | 45,604,225 | $ | 1,420,795 | $ | - | $ | 47,025,020 | ||||||||
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NOTE 6Tax Information
The amount and character of income and gains to be distributed are determined in accordance with federal income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under federal income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforwards are calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforwards actually available for the Funds to utilize. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
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The Funds had capital loss carryforwards as of October 31, 2019, as follows:
No expiration | ||||||||||||
Short-Term | Long-Term | Total* | ||||||||||
China Technology ETF |
$ | 8,494,260 | $ | 88,827,096 | $ | 97,321,356 | ||||||
DWA Developed Markets Momentum ETF |
117,962,174 | - | 117,962,174 | |||||||||
DWA Emerging Markets Momentum ETF |
116,085,941 | - | 116,085,941 | |||||||||
FTSE RAFI Developed Markets ex-U.S. ETF |
145,611 | 79,440,433 | 79,586,044 | |||||||||
FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF |
3,292,611 | 18,532,838 | 21,825,449 | |||||||||
FTSE RAFI Emerging Markets ETF |
6,523,672 | 72,964,423 | 79,488,095 | |||||||||
Global Clean Energy ETF |
11,222,904 | 59,231,583 | 70,454,487 | |||||||||
Global Water ETF |
38,686,941 | 9,592,247 | 48,279,188 | |||||||||
International BuyBack AchieversTM ETF |
45,469,186 | 2,843,201 | 48,312,387 | |||||||||
MSCI Global Timber ETF |
12,438,579 | 9,013,875 | 21,452,454 | |||||||||
S&P Global Water Index ETF |
2,220,590 | 21,529,260 | 23,749,850 | |||||||||
S&P International Developed Quality ETF |
2,965,527 | 1,600,542 | 4,566,069 |
* | Capital loss carryforwards are reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 7Investment Transactions
For the six-month period ended April 30, 2020, the cost of securities purchased and proceeds from sales of securities (other than short-term securities, U.S. Treasury obligations, money market funds and in-kind transactions, if any) were as follows:
Purchases | Sales | |||||||
China Technology ETF |
$ | 127,543,696 | $ | 86,379,553 | ||||
DWA Developed Markets Momentum ETF |
92,288,771 | 93,264,527 | ||||||
DWA Emerging Markets Momentum ETF |
116,721,592 | 129,265,411 | ||||||
FTSE RAFI Developed Markets ex-U.S. ETF |
111,561,923 | 108,561,396 | ||||||
FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF |
74,512,626 | 74,613,779 | ||||||
FTSE RAFI Emerging Markets ETF |
215,251,761 | 194,806,675 | ||||||
Global Clean Energy ETF |
15,005,108 | 14,597,424 | ||||||
Global Water ETF |
28,791,552 | 28,399,575 | ||||||
International BuyBack AchieversTM ETF |
15,562,160 | 18,117,174 | ||||||
MSCI Global Timber ETF |
4,336,497 | 9,714,517 | ||||||
S&P Global Water Index ETF |
19,695,129 | 27,522,463 | ||||||
S&P International Developed Quality ETF |
7,308,517 | 7,042,154 |
For the six-month period ended April 30, 2020, in-kind transactions associated with creations and redemptions were as follows:
Cost of | Value of | |||||||
Securities | Securities | |||||||
Received | Delivered | |||||||
China Technology ETF |
$ | 122,690,306 | $ | 32,128,647 | ||||
DWA Developed Markets Momentum ETF |
11,551,961 | 33,048,348 | ||||||
DWA Emerging Markets Momentum ETF |
15,720,384 | 28,927,234 | ||||||
FTSE RAFI Developed Markets ex-U.S. ETF |
221,821,149 | 108,606,386 | ||||||
FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF |
73,077,496 | 41,272,778 | ||||||
FTSE RAFI Emerging Markets ETF |
75,496,010 | 42,794,070 | ||||||
Global Clean Energy ETF |
5,456,253 | 1,203,809 | ||||||
Global Water ETF |
3,459,889 | 5,525,842 | ||||||
International BuyBack AchieversTM ETF |
4,719,704 | 29,054,199 | ||||||
MSCI Global Timber ETF |
- | 39,512,891 | ||||||
S&P Global Water Index ETF |
12,986,612 | 71,977,869 | ||||||
S&P International Developed Quality ETF |
25,381,873 | 24,418,116 |
Gains (losses) on in-kind transactions are generally not considered taxable gains (losses) for federal income tax purposes.
|
95 |
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As of April 30, 2020, the aggregate cost of investments, including any derivatives, on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end:
Net | ||||||||||||||||
Gross | Gross | Unrealized | ||||||||||||||
Unrealized | Unrealized | Appreciation | ||||||||||||||
Appreciation | (Depreciation) | (Depreciation) | Cost | |||||||||||||
China Technology ETF |
$ | 102,557,884 | $ | (74,261,243 | ) | $ | 28,296,641 | $ | 662,973,169 | |||||||
DWA Developed Markets Momentum ETF |
16,907,391 | (4,494,400 | ) | 12,412,991 | 124,539,355 | |||||||||||
DWA Emerging Markets Momentum ETF |
17,358,971 | (3,358,466 | ) | 14,000,505 | 106,269,813 | |||||||||||
FTSE RAFI Developed Markets ex-U.S. ETF |
78,513,566 | (307,358,535 | ) | (228,844,969 | ) | 1,363,615,128 | ||||||||||
FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF |
27,989,689 | (57,321,303 | ) | (29,331,614 | ) | 348,530,463 | ||||||||||
FTSE RAFI Emerging Markets ETF |
95,897,270 | (272,163,613 | ) | (176,266,343 | ) | 1,223,929,394 | ||||||||||
Global Clean Energy ETF |
13,460,043 | (3,513,959 | ) | 9,946,084 | 53,798,408 | |||||||||||
Global Water ETF |
34,955,623 | (7,395,198 | ) | 27,560,425 | 152,960,594 | |||||||||||
International BuyBack AchieversTM ETF |
4,328,853 | (26,128,550 | ) | (21,799,697 | ) | 119,580,771 | ||||||||||
MSCI Global Timber ETF |
9,469,765 | (16,092,435 | ) | (6,622,670 | ) | 82,900,695 | ||||||||||
S&P Global Water Index ETF |
124,333,156 | (48,463,540 | ) | 75,869,616 | 549,987,207 | |||||||||||
S&P International Developed Quality ETF |
2,214,215 | (5,397,962 | ) | (3,183,747 | ) | 50,208,767 |
NOTE 8Trustees and Officers Fees
Trustees and Officers Fees include amounts accrued by the Funds to pay remuneration to the Independent Trustees and an Officer of the Trust. The Adviser, as a result of each Funds unitary management fee, pays for such compensation for China Technology ETF, DWA Developed Markets Momentum ETF, DWA Emerging Markets Momentum ETF, FTSE RAFI Developed Markets ex-U.S. ETF, FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF, FTSE RAFI Emerging Markets ETF, Global Clean Energy ETF, Global Water ETF, International BuyBack Achievers ETF, and S&P International Developed Quality ETF. The Trustee who is an interested person of the Trust does not receive any Trustees fees.
The Trust has adopted a deferred compensation plan (the Plan). Under the Plan, each Independent Trustee who has executed a Deferred Fee Agreement (a Participating Trustee) may defer receipt of all or a portion of their compensation (Deferral Fees). Such Deferral Fees are deemed to be invested in select Invesco ETFs. The Deferral Fees payable to a Participating Trustee are valued as of the date such Deferral Fees would have been paid to a Participating Trustee. The value increases with contributions or with increases in the value of the Shares selected, and the value decreases with distributions or with declines in the value of the Shares selected. Obligations under the Plan represent unsecured claims against the general assets of the Funds.
NOTE 9Capital
Shares are issued and redeemed by each Fund only in Creation Units of 50,000 Shares, except for S&P Global Water Index ETF, which are issued and redeemed in Creation Units of 80,000 Shares. Only Authorized Participants are permitted to purchase or redeem Creation Units from the Funds. Such transactions are principally permitted in exchange for Deposit Securities, with a balancing cash component to equate the transaction to the NAV per Share of a Fund of the Trust on the transaction date. However, for all Funds, cash in an amount equivalent to the value of certain securities may be substituted, generally when the securities are not available in sufficient quantity for delivery, not eligible for trading by the Authorized Participant or as a result of other market circumstances.
To the extent that the Funds permit transactions in exchange for Deposit Securities, each Fund may issue Shares in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to 105% of the market value of the missing Deposit Securities. In accordance with the Trusts Participant Agreement, Creation Units will be issued to an Authorized Participant, notwithstanding the fact that the corresponding Deposit Securities have not been received in part or in whole, in reliance on the undertaking of the Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking shall be secured by the Authorized Participants delivery and maintenance of collateral consisting of cash in the form of U.S. dollars in immediately available funds having a value (marked-to-market daily) at least equal to 105%, which the Adviser may change from time to time, of the value of the missing Deposit Securities.
Certain transaction fees may be charged by the Funds for creations and redemptions, which are treated as increases in capital.
Transactions in each Funds Shares are disclosed in detail in the Statements of Changes in Net Assets.
NOTE 10Coronavirus (COVID-19) Pandemic
During the first quarter of 2020, the World Health Organization declared COVID-19 to be a public health emergency. COVID-19 has led to increased short-term market volatility and may have adverse long-term effects on U.S. and world economies and markets in general. COVID-19 may adversely impact the value of the Funds investments. Because of the uncertainties on
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valuation, the global economy and business operations, values reflected in these financial statements may materially differ from the value received upon actual sales of those investments.
The extent of the impact on the performance of the Funds and their investments will depend on future developments, including the duration and spread of the COVID-19 outbreak, related restrictions and advisories, and the effects on the financial markets and economy overall, all of which are highly uncertain and cannot be predicted.
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Calculating your ongoing Fund expenses
Example
As a shareholder of Invesco MSCI Global Timber ETF and Invesco S&P Global Water Index ETF, you incur advisory fees and other Fund expenses. As a shareholder of the Invesco China Technology ETF, Invesco DWA Developed Markets Momentum ETF, Invesco DWA Emerging Markets Momentum ETF, Invesco FTSE RAFI Developed Markets ex-U.S. ETF, Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF, Invesco FTSE RAFI Emerging Markets ETF, Invesco Global Clean Energy ETF, Invesco Global Water ETF, Invesco International BuyBack Achievers ETF and Invesco S&P International Developed Quality ETF, you incur a unitary management fee. In addition to the unitary management fee, a shareholder may pay distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2019 through April 30, 2020.
In addition to the fees and expenses which the Invesco FTSE RAFI Emerging Markets ETF (the Portfolio) bears directly, the Portfolio indirectly bears a pro rata share of the fees and expenses of the investment companies in which the Portfolio invests. The amount of fees and expenses incurred indirectly by the Portfolio will vary because the investment companies have varied expenses and fee levels and the Portfolio may own different proportions of the investment companies at different times. Estimated investment companies expenses are not expenses that are incurred directly by the Portfolio. They are expenses that are incurred directly by the investment companies and are deducted from the value of the investment companies the Portfolio invests in. The effect of the estimated investment companies expenses that the Portfolio bears indirectly are included in the Portfolio total returns.
Actual Expenses
The first line in the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading Expenses Paid During the Six-Month Period to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line in the following table provides information about hypothetical account values and hypothetical expenses based on each Funds actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Funds actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as sales charges and brokerage commissions. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, expenses shown in the table do not include the expenses of the underlying funds, which are borne indirectly by a Fund. If transaction costs and indirect expenses were included, your costs would have been higher.
Annualized | ||||||||||||||||||||
Beginning | Ending | Expense Ratio | Expenses Paid | |||||||||||||||||
Account Value | Account Value | Based on the | During the | |||||||||||||||||
November 1, 2019 | April 30, 2020 | Six-Month Period | Six-Month Period(1) | |||||||||||||||||
Invesco China Technology ETF (CQQQ) |
||||||||||||||||||||
Actual |
$ | 1,000.00 | $ | 1,091.20 | 0.70 | % | $ | 3.64 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.38 | 0.70 | 3.52 | ||||||||||||||||
Invesco DWA Developed Markets Momentum ETF (PIZ) |
||||||||||||||||||||
Actual |
1,000.00 | 914.60 | 0.80 | 3.81 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,020.89 | 0.80 | 4.02 |
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Calculating your ongoing Fund expenses(continued)
Annualized | ||||||||||||||||||||
Beginning | Ending | Expense Ratio | Expenses Paid | |||||||||||||||||
Account Value | Account Value | Based on the | During the | |||||||||||||||||
November 1, 2019 | April 30, 2020 | Six-Month Period | Six-Month Period(1) | |||||||||||||||||
Invesco DWA Emerging Markets Momentum ETF (PIE) |
||||||||||||||||||||
Actual |
$ | 1,000.00 | $ | 876.30 | 0.90 | % | $ | 4.20 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,020.39 | 0.90 | 4.52 | ||||||||||||||||
Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF) |
||||||||||||||||||||
Actual |
1,000.00 | 804.80 | 0.45 | 2.02 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.63 | 0.45 | 2.26 | ||||||||||||||||
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN) |
||||||||||||||||||||
Actual |
1,000.00 | 850.60 | 0.49 | 2.25 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.43 | 0.49 | 2.46 | ||||||||||||||||
Invesco FTSE RAFI Emerging Markets ETF (PXH) |
||||||||||||||||||||
Actual |
1,000.00 | 801.10 | 0.49 | 2.19 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.43 | 0.49 | 2.46 | ||||||||||||||||
Invesco Global Clean Energy ETF (PBD) |
||||||||||||||||||||
Actual |
1,000.00 | 1,074.90 | 0.75 | 3.87 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.13 | 0.75 | 3.77 | ||||||||||||||||
Invesco Global Water ETF (PIO) |
||||||||||||||||||||
Actual |
1,000.00 | 932.10 | 0.75 | 3.60 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.13 | 0.75 | 3.77 | ||||||||||||||||
Invesco International BuyBack AchieversTM ETF (IPKW) |
||||||||||||||||||||
Actual |
1,000.00 | 817.90 | 0.55 | 2.49 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.13 | 0.55 | 2.77 | ||||||||||||||||
Invesco MSCI Global Timber ETF (CUT) |
||||||||||||||||||||
Actual |
1,000.00 | 866.90 | 0.55 | 2.55 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.13 | 0.55 | 2.77 | ||||||||||||||||
Invesco S&P Global Water Index ETF (CGW) |
||||||||||||||||||||
Actual |
1,000.00 | 915.80 | 0.58 | 2.76 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,021.98 | 0.58 | 2.92 | ||||||||||||||||
Invesco S&P International Developed Quality ETF (IDHQ) |
||||||||||||||||||||
Actual |
1,000.00 | 945.90 | 0.29 | 1.40 | ||||||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,023.42 | 0.29 | 1.46 |
(1) | Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six-month period ended April 30, 2020. Expenses are calculated by multiplying the Funds annualized expense ratio by the average account value for the period, then multiplying the result by 182/366. |
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99 |
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Approval of Investment Advisory and Sub-Advisory Contracts
At a meeting held on April 14, 2020, the Board of Trustees of the Invesco Exchange-Traded Fund Trust II (the Trust), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco Capital Management LLC (the Adviser) and the Trust for the following 71 series (each, a Fund and collectively, the Funds):
Invesco 1-30 Laddered Treasury ETF | Invesco S&P 500® Enhanced Value ETF | |
Invesco California AMT-Free Municipal Bond ETF | Invesco S&P 500® ex-Rate Sensitive Low Volatility ETF | |
Invesco CEF Income Composite ETF | Invesco S&P 500® High Beta ETF | |
Invesco China Technology ETF | Invesco S&P 500® High Dividend Low Volatility ETF | |
Invesco DWA Developed Markets Momentum ETF | Invesco S&P 500® Low Volatility ETF | |
Invesco DWA Emerging Markets Momentum ETF | Invesco S&P 500 Minimum Variance ETF | |
Invesco DWA SmallCap Momentum ETF | Invesco S&P 500® Momentum ETF | |
Invesco Emerging Markets Sovereign Debt ETF | Invesco S&P 500 Revenue ETF | |
Invesco FTSE International Low Beta Equal Weight ETF | Invesco S&P Emerging Markets Low Volatility ETF | |
Invesco FTSE RAFI Developed Markets ex-U.S. ETF | Invesco S&P Emerging Markets Momentum ETF | |
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF |
Invesco S&P International Developed High Dividend Low Volatility ETF | |
Invesco FTSE RAFI Emerging Markets ETF | Invesco S&P International Developed Low Volatility ETF | |
Invesco Fundamental High Yield® Corporate Bond ETF | Invesco S&P International Developed Momentum ETF | |
Invesco Fundamental Investment Grade Corporate Bond ETF | Invesco S&P International Developed Quality ETF | |
Invesco Global Clean Energy ETF | Invesco S&P MidCap 400 Revenue ETF | |
Invesco Global Short Term High Yield Bond ETF | Invesco S&P MidCap Low Volatility ETF | |
Invesco Global Water ETF | Invesco S&P SmallCap 600 Revenue ETF | |
Invesco International BuyBack AchieversTM ETF | Invesco S&P SmallCap Consumer Discretionary ETF | |
Invesco International Corporate Bond ETF | Invesco S&P SmallCap Consumer Staples ETF | |
Invesco KBW Bank ETF | Invesco S&P SmallCap Energy ETF | |
Invesco KBW High Dividend Yield Financial ETF | Invesco S&P SmallCap Financials ETF | |
Invesco KBW Premium Yield Equity REIT ETF | Invesco S&P SmallCap Health Care ETF | |
Invesco KBW Property & Casualty Insurance ETF | Invesco S&P SmallCap High Dividend Low Volatility ETF | |
Invesco KBW Regional Banking ETF | Invesco S&P SmallCap Industrials ETF | |
Invesco National AMT-Free Municipal Bond ETF | Invesco S&P SmallCap Information Technology ETF | |
Invesco New York AMT-Free Municipal Bond ETF | Invesco S&P SmallCap Low Volatility ETF | |
Invesco Preferred ETF | Invesco S&P SmallCap Materials ETF | |
Invesco PureBetaSM 0-5YrUSTIPSETF | Invesco S&P SmallCap Quality ETF | |
Invesco PureBetaSM FTSE Developed ex-North America ETF | Invesco S&P SmallCap Utilities & Communication Services | |
Invesco PureBetaSM FTSE Emerging Markets ETF | ETF | |
Invesco PureBetaSM MSCI USA ETF | Invesco S&P Ultra Dividend Revenue ETF | |
Invesco PureBetaSM MSCI USA Small Cap ETF | Invesco Senior Loan ETF | |
Invesco PureBetaSM US Aggregate Bond ETF | Invesco Taxable Municipal Bond ETF | |
Invesco Russell 1000 Enhanced Equal Weight ETF | Invesco Treasury Collateral ETF | |
Invesco Russell 1000 Equal Weight ETF | Invesco Variable Rate Preferred ETF | |
Invesco Russell 1000 Low Beta Equal Weight ETF | Invesco VRDO Tax-Free Weekly ETF |
Also at the April 14, 2020 meeting, the Board of Trustees of the Trust, including the Independent Trustees, approved the continuation of the Investment Sub-Advisory Agreement between the Adviser and the following seven affiliated sub-advisers for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF (the Sub-Advisory Agreement): Invesco Advisers, Inc.; Invesco Asset Management Deutschland, GmbH; Invesco Asset Management Limited; Invesco Asset Management (Japan) Limited; Invesco Hong Kong Limited; Invesco Senior Secured Management, Inc.; and Invesco Canada Ltd. (each, a Sub-Adviser and collectively, the Sub-Advisers).
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
Investment Advisory Agreement
The Trustees reviewed information from the Adviser describing: (i) the nature, extent and quality of services provided, (ii) the investment performance of each Fund and the Adviser, (iii) the fees paid by the Funds and comparisons to amounts paid by other comparable registered investment companies, (iv) the costs of services provided and estimated profits realized by the Adviser, (v) the extent to which economies of scale may be realized as a Fund grows and whether fee levels reflect any possible economies of scale for the benefit of Fund shareholders, and (vi) any further benefits realized by the Adviser or its affiliates from the Advisers relationship with the Funds.
Nature, Extent and Quality of Services. In evaluating the nature, extent and quality of the Advisers services, the Trustees reviewed information concerning the functions performed by the Adviser for the Funds, information describing the Advisers current organization and staffing, including operational support provided by the Advisers parent organization, Invesco Ltd. (Invesco), and the background and experience of the persons responsible for the day-to-day management of the Funds. The Trustees reviewed matters related to the Advisers execution and/or oversight of execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and their underlying indexes for the one-year, three-year, five-year, ten-year and since-inception periods ended December 31, 2019, as applicable, including reports for each of those periods on the correlation and tracking error between each Funds performance and the performance of its underlying index, as well as the Advisers analysis of the tracking error and correlation between certain Funds and their underlying indexes. In reviewing the tracking error reports, the Trustees considered information provided by Invescos independent performance and risk management group with respect to general expected tracking error ranges. The Trustees also considered that certain Funds were created in connection with the purchases by Invesco of the exchange-traded funds businesses of Guggenheim Capital LLC on April 6, 2018 and Massachusetts Mutual Life Insurance Company (Oppenheimer) on May 24, 2019 (each, a Transaction), and that each such Funds performance prior to the closing of the applicable Transaction is that of its predecessor Guggenheim ETF or Oppenheimer ETF. The Trustees noted that, for each applicable period, the correlation for each Fund, other than the five-year and since-inception periods for Invesco Global Short Term High Yield Bond ETF and the one-year and ten-year periods for Invesco VRDO Tax-Free Weekly ETF, was within the targeted range set forth in the Trusts registration statement. The Trustees reviewed the reasons provided by the Adviser for Invesco Global Short Term High Yield Bond ETFs and Invesco VRDO Tax-Free Weekly ETFs level of correlation to its underlying index, as well as the Advisers expectations for each Funds correlation going forward. The Trustees noted that, for each applicable period, the tracking error for all Funds was within the targeted range set forth in the Trusts registration statement and concluded that each Funds correlation to its underlying index and the tracking error for each Fund were within an acceptable range given that Funds particular circumstances.
The Trustees considered the services provided by the Adviser in its oversight of the Funds administrator, custodian and transfer agent. They noted the significant amount of time, effort and resources that had been devoted to this oversight function.
Based on their review, the Trustees concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Funds net expense ratio and unitary advisory fee. The Trustees noted that the annual advisory fee charged to each Fund, as set forth below, is a unitary advisory fee and that the Adviser pays all other operating expenses of each Fund, including the fees payable to the Sub-Advisers for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF, except that each Fund pays its brokerage expenses, taxes, interest (including, for Invesco Senior Loan ETF, interest expenses associated with its line of credit), litigation expenses and other extraordinary expenses (including acquired fund fees and expenses, if any).
0.04%: |
Invesco PureBetaTM MSCI USA ETF | |
0.05%: |
Invesco PureBetaTM US Aggregate Bond ETF | |
0.06%: |
Invesco PureBetaTM MSCI USA Small Cap ETF | |
0.07%: |
Invesco PureBetaTM 0-5 Yr US TIPS ETF, Invesco PureBetaTM FTSE Developed ex-North America ETF | |
0.08%: |
Invesco Treasury Collateral ETF | |
0.10%: |
Invesco S&P 500 Minimum Variance ETF | |
0.13%: |
Invesco S&P 500 Enhanced Value ETF, Invesco S&P 500 Momentum ETF | |
0.14%: |
Invesco PureBetaTM FTSE Emerging Markets ETF |
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
0.20%: |
Invesco Russell 1000 Equal Weight ETF | |
0.22%: |
Invesco Fundamental Investment Grade Corporate Bond ETF | |
0.25%: |
Invesco 1-30 Laddered Treasury ETF, Invesco S&P 500® ex-Rate Sensitive Low Volatility ETF, Invesco S&P 500® High Beta ETF, Invesco S&P 500® Low Volatility ETF, Invesco S&P MidCap Low Volatility ETF, Invesco S&P SmallCap Low Volatility ETF, Invesco VRDO Tax-Free Weekly ETF | |
0.28%: |
Invesco California AMT-Free Municipal Bond ETF, Invesco National AMT-Free Municipal Bond ETF, Invesco New York AMT-Free Municipal Bond ETF, Invesco Taxable Municipal Bond ETF | |
0.29%: |
Invesco Russell 1000 Enhanced Equal Weight ETF, Invesco S&P International Developed Quality ETF, Invesco S&P SmallCap Consumer Discretionary ETF, Invesco S&P SmallCap Consumer Staples ETF, Invesco S&P SmallCap Energy ETF, Invesco S&P SmallCap Financials ETF, Invesco S&P SmallCap Health Care ETF, Invesco S&P SmallCap Industrials ETF, Invesco S&P SmallCap Information Technology ETF, Invesco S&P SmallCap Materials ETF, Invesco S&P SmallCap Quality ETF, Invesco S&P SmallCap Utilities & Communication Services ETF | |
0.30%: |
Invesco S&P 500® High Dividend Low Volatility ETF, Invesco S&P International Developed High Dividend Low Volatility ETF, Invesco S&P SmallCap High Dividend Low Volatility ETF | |
0.35%: |
Invesco Global Short Term High Yield Bond ETF, Invesco KBW Bank ETF, Invesco KBW High Dividend Yield Financial ETF, Invesco KBW Premium Yield Equity REIT ETF, Invesco KBW Property & Casualty Insurance ETF, Invesco KBW Regional Banking ETF, Invesco Russell 1000 Low Beta Equal Weight ETF, Invesco S&P International Developed Low Volatility ETF, Invesco S&P International Developed Momentum ETF | |
0.39%: |
Invesco S&P 500 Revenue ETF, Invesco S&P MidCap 400 Revenue ETF, Invesco S&P SmallCap 600 Revenue ETF, Invesco S&P Ultra Dividend Revenue ETF | |
0.45%: |
Invesco FTSE International Low Beta Equal Weight ETF, Invesco FTSE RAFI Developed Markets ex-U.S. ETF, Invesco S&P Emerging Markets Low Volatility ETF, Invesco S&P Emerging Markets Momentum ETF | |
0.49%: |
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF, Invesco FTSE RAFI Emerging Markets ETF | |
0.50%: |
Invesco CEF Income Composite ETF, Invesco Emerging Markets Sovereign Debt ETF, Invesco Fundamental High Yield® Corporate Bond ETF, Invesco International Corporate Bond ETF, Invesco Preferred ETF, Invesco Variable Rate Preferred ETF | |
0.55%: |
Invesco International BuyBack AchieversTM ETF | |
0.60%: |
Invesco DWA SmallCap Momentum ETF | |
0.65%: |
Invesco Senior Loan ETF | |
0.70%: |
Invesco China Technology ETF | |
0.75%: |
Invesco Global Clean Energy ETF, Invesco Global Water ETF | |
0.80%: |
Invesco DWA Developed Markets Momentum ETF | |
0.90%: |
Invesco DWA Emerging Markets Momentum ETF |
The Trustees considered that, effective May 1, 2020, the Adviser had agreed to reduce the unitary advisory fee for Invesco S&P Emerging Markets Low Volatility ETF and Invesco S&P Emerging Markets Momentum ETF from 0.45% to 0.29% of average daily net assets, and to reduce the unitary advisory fee for Invesco S&P International Developed Low Volatility ETF and Invesco S&P International Developed Momentum ETF from 0.35% to 0.25% of average daily net assets.
The Trustees compared each Funds net expense ratio to information compiled by the Adviser from Lipper Inc. databases on the net expense ratios of comparable exchange-traded funds (ETFs), open-end (non-ETF) index funds and open-end (non-ETF) actively-managed funds, as applicable. The Trustees noted that the net expense ratios for certain Funds were equal to or lower than the median net expense ratios of their ETF and open-end index peer funds as illustrated in the table below. The Trustees also noted that the net expense ratios for all of the Funds were lower than the median net expense ratios of their open-end actively-managed peer funds. The Trustees noted that a portion of each Funds operating expenses was attributable to a sub-license fee payable out of the unitary advisory fee charged to that Fund.
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
Equal to/Lower | Lower than | |||||
Equal to/Lower | than Open-End | Open-End | ||||
than ETF | Index Fund | Active Fund | ||||
Invesco Fund |
Peer Median | Peer Median* | Peer Median | |||
Invesco 1-30 Laddered Treasury ETF |
X | |||||
Invesco California AMT-Free Municipal Bond ETF |
N/A | X | ||||
Invesco CEF Income Composite ETF |
X | N/A | X | |||
Invesco China Technology ETF |
N/A | X | ||||
Invesco DWA Developed Markets Momentum ETF |
X | |||||
Invesco DWA Emerging Markets Momentum ETF |
X | |||||
Invesco DWA SmallCap Momentum ETF |
X | |||||
Invesco Emerging Markets Sovereign Debt ETF |
X | |||||
Invesco FTSE International Low Beta Equal Weight ETF |
X | X | X | |||
Invesco FTSE RAFI Developed Markets ex-U.S. ETF |
X | X | ||||
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF |
X | X | X | |||
Invesco FTSE RAFI Emerging Markets ETF |
X | X | ||||
Invesco Fundamental High Yield® Corporate Bond ETF |
X | X | ||||
Invesco Fundamental Investment Grade Corporate Bond ETF |
X | |||||
Invesco Global Clean Energy ETF |
N/A | X | ||||
Invesco Global Short Term High Yield Bond ETF |
X | N/A | X | |||
Invesco Global Water ETF |
N/A | X | ||||
Invesco International BuyBack AchieversTM ETF |
X | X | X | |||
Invesco International Corporate Bond ETF |
X | |||||
Invesco KBW Bank ETF |
X | X | ||||
Invesco KBW High Dividend Yield Financial ETF |
X | X | ||||
Invesco KBW Premium Yield Equity REIT ETF |
X | X | ||||
Invesco KBW Property & Casualty Insurance ETF |
X | X | ||||
Invesco KBW Regional Banking ETF |
X | X | ||||
Invesco National AMT-Free Municipal Bond ETF |
X | |||||
Invesco New York AMT-Free Municipal Bond ETF |
N/A | X | ||||
Invesco Preferred ETF |
N/A | X | ||||
Invesco PureBetaTM 0-5 Yr US TIPS ETF |
X | |||||
Invesco PureBetaTM FTSE Developed ex-North America ETF |
X | |||||
Invesco PureBetaTM FTSE Emerging Markets ETF |
X | X | ||||
Invesco PureBetaTM MSCI USA ETF |
X | X | X | |||
Invesco PureBetaTM MSCI USA Small Cap ETF |
X | X | X | |||
Invesco PureBetaTM US Aggregate Bond ETF |
X | X | X | |||
Invesco Russell 1000 Enhanced Equal Weight ETF |
X | X | X | |||
Invesco Russell 1000 Equal Weight ETF |
X | X | X | |||
Invesco Russell 1000 Low Beta Equal Weight ETF |
X | X | ||||
Invesco S&P 500 Enhanced Value ETF |
X | X | X | |||
Invesco S&P 500® ex-Rate Sensitive Low Volatility ETF |
X | X | X | |||
Invesco S&P 500 High Beta ETF |
X | X | X | |||
Invesco S&P 500® High Dividend Low Volatility ETF |
X | X | X | |||
Invesco S&P 500® Low Volatility ETF |
X | X | ||||
Invesco S&P 500 Minimum Variance ETF |
X | X | X | |||
Invesco S&P 500 Momentum ETF |
X | X |
|
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
Equal to/Lower | Lower than | |||||
Equal to/Lower | than Open-End | Open-End | ||||
than ETF | Index Fund | Active Fund | ||||
Invesco Fund |
Peer Median | Peer Median* | Peer Median | |||
Invesco S&P 500 Revenue ETF |
X | X | ||||
Invesco S&P Emerging Markets Low Volatility ETF |
X | X | X | |||
Invesco S&P Emerging Markets Momentum ETF |
X | X | ||||
Invesco S&P International Developed High Dividend Low Volatility ETF |
X | X | ||||
Invesco S&P International Developed Low Volatility ETF |
X | X | ||||
Invesco S&P International Developed Momentum ETF |
X | |||||
Invesco S&P International Developed Quality ETF |
X | X | ||||
Invesco S&P MidCap 400 Revenue ETF |
X | |||||
Invesco S&P MidCap Low Volatility ETF |
X | |||||
Invesco S&P SmallCap 600 Revenue ETF |
X | X | ||||
Invesco S&P SmallCap Consumer Discretionary ETF |
X | X | ||||
Invesco S&P SmallCap Consumer Staples ETF |
X | X | ||||
Invesco S&P SmallCap Energy ETF |
X | X | ||||
Invesco S&P SmallCap Financials ETF |
X | X | ||||
Invesco S&P SmallCap Health Care ETF |
X | X | ||||
Invesco S&P SmallCap High Dividend Low Volatility ETF |
X | X | X | |||
Invesco S&P SmallCap Industrials ETF |
X | X | ||||
Invesco S&P SmallCap Information Technology ETF |
X | X | X | |||
Invesco S&P SmallCap Low Volatility ETF |
X | X | X | |||
Invesco S&P SmallCap Materials ETF |
X | X | ||||
Invesco S&P SmallCap Quality ETF |
X | X | ||||
Invesco S&P SmallCap Utilities & Communication Services ETF |
X | X | X | |||
Invesco S&P Ultra Dividend Revenue ETF |
X | X | ||||
Invesco Senior Loan ETF |
X | X | ||||
Invesco Taxable Municipal Bond ETF |
N/A | X | ||||
Invesco Treasury Collateral ETF |
X | X | ||||
Invesco Variable Rate Preferred ETF |
X | X | ||||
Invesco VRDO Tax-Free Weekly ETF |
N/A | X |
* | The information provided by the Adviser indicated that certain Funds did not have any comparable open-end index fund peers. Those Funds have been designated in this column with an N/A for not available. |
In response to questions from the Independent Trustees, the Adviser provided supplemental information regarding each of Invesco 1-30 Laddered Treasury ETF, Invesco California AMT-Free Municipal Bond ETF, Invesco DWA Developed Markets Momentum ETF, Invesco Emerging Markets Sovereign Debt ETF, Invesco Global Clean Energy ETF, Invesco Global Water ETF, Invesco International Corporate Bond ETF, Invesco National AMT-Free Municipal Bond ETF, Invesco New York AMT-Free Municipal Bond ETF, Invesco Senior Loan ETF and Invesco VRDO Tax-Free Weekly ETFs advisory fees and total expenses and the Lipper peer data. The Adviser explained its view that the advisory fees and total expenses for these Funds are competitive and generally in line with other comparable funds in the marketplace, particularly in light of the level and nature of services provided and the investment management style of the Adviser. The Trustees also considered the Advisers statements regarding its pricing philosophy and the differing pricing philosophy of certain of the peers.
The Trustees noted information, including fee information, provided by the Adviser regarding other investment products to which it provides investment advisory services, including products that have investment strategies comparable to certain of the Funds. The Trustees considered the Advisers explanation of the differences between the services provided to the Funds and to the other investment products it advises, noting the Advisers statement that the management and oversight of the Funds requires substantially more labor and expense.
|
104 |
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
Based on all the information provided, the Board concluded that each Funds unitary advisory fee was reasonable and appropriate in light of the services provided, the nature of the indexes, the distinguishing factors of the Funds, and the administrative, operational and management oversight costs for the Adviser.
In conjunction with their review of the unitary advisory fees, the Trustees considered information provided by the Adviser on the revenues received by the Adviser under the Investment Advisory Agreement for the Funds. The Trustees reviewed information provided by the Adviser on its overall profitability, as well as the estimated profitability to the Adviser from its relationship to each Fund. The Trustees concluded that the overall and estimated profitability to the Adviser was not unreasonable.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. The Trustees reviewed the information provided by the Adviser as to the extent to which economies of scale may be realized as each Fund grows and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees reviewed each Funds asset size and unitary advisory fee. The Trustees noted that any reduction in fixed costs associated with the management of the Funds would be enjoyed by the Adviser, but a unitary advisory fee provides a level of certainty in expenses for the Funds. The Trustees considered whether the unitary advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund, and concluded that the unitary advisory fee was reasonable and appropriate.
Fall-out Benefits. The Trustees considered that the Adviser identified no additional benefits it receives from its relationship with the Funds, and noted that the Adviser does not have any soft-dollar arrangements. The Trustees also considered benefits received by affiliates of the Adviser that may be directly or indirectly attributed to the Advisers relationship with the Funds, including brokerage fees and advisory fees for money market cash management vehicles. The Board concluded that the advisory fee was reasonable, taking into account any ancillary benefits received by affiliates of the Adviser.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Investment Advisory Agreement for each Fund. No single factor was determinative in the Boards analysis.
Investment Sub-Advisory Agreement
As noted above, the Board of Trustees of the Trust, including the Independent Trustees, approved the continuation of the Sub-Advisory Agreement for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF at a meeting held on April 14, 2020. The review process followed by the Board is described in detail above. In connection with the review of the Sub-Advisory Agreement, the Board considered the factors described below, among others.
Nature, Extent and Quality of Services. The Trustees considered the nature, extent and quality of services provided under the Sub-Advisory Agreement. The Board reviewed the qualifications and background of each Sub-Adviser, the services provided or to be provided by each Sub-Adviser, the investment approach of the Sub-Adviser whose investment personnel manage Invesco Senior Loan ETFs and Invesco Treasury Collateral ETFs assets, the experience and skills of the investment personnel responsible for the day-to-day management of the Funds, and the resources made available to such personnel.
Based on their review, the Trustees concluded that the nature, extent and quality of services provided by the Sub-Advisers to Invesco Senior Loan ETF and Invesco Treasury Collateral ETF under the Sub-Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser and the Sub-Advisers on the sub-advisory fee rates under the Sub-Advisory Agreement. The Trustees noted that the sub-advisory fees charged by the Sub-Advisers under the Sub-Advisory Agreement are consistent with the compensation structure used throughout Invesco when Invescos affiliates provide sub-advisory services for funds managed by other Invesco affiliates. The Board considered how the sub-advisory fees relate to the overall advisory fee for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF and noted that the Adviser compensates the Sub-Advisers from its fee.
The Trustees also reviewed the financial statements provided by Invesco Senior Secured Management, Inc., in connection with the March 12, 2020 Board meeting, and Invesco Advisers, Inc., in connection with the April 14, 2020 meeting, and noted the net income generated by each firm. The Trustees noted that the Adviser compensates the Sub-Advisers from its fee and that the Adviser provided profitability information with respect to Invesco Senior Loan ETF and Invesco Treasury Collateral ETF.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. As part of their review of the Investment Advisory Agreement for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF, the Trustees considered the extent to which economies of
|
105 |
|
Approval of Investment Advisory and Sub-Advisory Contracts (continued)
scale may be realized as the Funds grow and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees considered whether the sub-advisory fee rates for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF were reasonable in relation to the asset size of the Funds, and concluded that the flat sub-advisory fee rates were reasonable and appropriate.
Fall-out Benefits. The Trustees noted that Invesco Advisers, Inc. receives management fees from money market funds into which the Funds and other Invesco ETFs excess cash and securities lending collateral may be invested, and that the Adviser waives its fees on the excess cash invested under such arrangement in amounts equal to fees received by Invesco Advisers, Inc. on the Funds and other Invesco ETFs excess cash invested in the money market funds. The Trustees noted that the Sub-Advisers had not identified any further benefits that they derived from their relationships with Invesco Senior Loan ETF and Invesco Treasury Collateral ETF and that the Sub-Advisers do not have any soft-dollar arrangements with respect to the Funds. The Board concluded that the sub-advisory fee with respect to each Fund was reasonable, taking into account any ancillary benefits received by the Sub-Advisers.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Sub-Advisory Agreement for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF. No single factor was determinative in the Boards analysis.
|
106 |
|
Approval of Investment Advisory Contracts
At a meeting held on April 14, 2020, the Board of Trustees of the Invesco Exchange-Traded Fund Trust II (the Trust), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco Capital Management LLC (the Adviser) and the Trust for Invesco MSCI Global Timber ETF, Invesco S&P Global Water Index ETF and Invesco Solar ETF (each, a Fund and collectively, the Funds).
The Trustees reviewed information from the Adviser describing: (i) the nature, extent and quality of services provided, (ii) the investment performance of the Funds and the Adviser, (iii) the fees and expenses paid by the Funds and comparisons to amounts paid by other comparable registered investment companies, (iv) the costs of services provided and estimated profits realized by the Adviser, (v) the extent to which economies of scale may be realized as a Fund grows and whether fee levels reflect any possible economies of scale for the benefit of Fund shareholders, and (vi) any further benefits realized by the Adviser or its affiliates from the Advisers relationship with the Funds.
Nature, Extent and Quality of Services. In evaluating the nature, extent and quality of the Advisers services, the Trustees reviewed information concerning the functions performed by the Adviser for the Funds, information describing the Advisers current organization and staffing, including operational support provided by the Advisers parent organization, Invesco Ltd. (Invesco), and the background and experience of the persons responsible for the day-to-day management of the Funds. The Trustees reviewed matters related to the Advisers oversight of execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and their underlying indexes for the one-year, three-year, five-year, ten-year and since-inception periods ended December 31, 2019, as applicable, including reports for each of those periods on the correlation and tracking error between each Funds performance and the performance of its underlying index, as well as the Advisers analysis of the tracking error between certain Funds and their underlying indexes. In reviewing the tracking error reports, the Trustees considered information provided by Invescos independent performance and risk management group with respect to general expected tracking error ranges. The Trustees also considered that the Funds were created in connection with the purchase by Invesco of the exchange-traded funds business of Guggenheim Capital LLC (the Transaction) and that each such Funds performance prior to the closing of the Transaction on April 6, 2018, and on May 18, 2018 for the Invesco Solar ETF, is that of its predecessor Guggenheim ETF. The Trustees noted that, for each applicable period, the correlation and tracking error for each Fund was within the targeted range set forth in the Trusts registration statement and concluded that each Fund was correlated to its underlying index and that the tracking error for each Fund was within an acceptable range given that Funds particular circumstances.
The Trustees considered the services provided by the Adviser in its oversight of the Funds administrator, custodian and transfer agent. They noted the significant amount of time, effort and resources that had been devoted to this oversight function.
Based on their review, the Trustees concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Funds contractual advisory fee, net advisory fee, and gross and net expense ratio. The Trustees noted that the annual contractual advisory fee charged to each Fund is 0.50% of the Funds average daily net assets and that the Adviser has agreed to waive a portion of its contractual advisory fee and/or pay expenses (an Expense Cap) to the extent necessary to prevent the annual operating expenses of each Fund (excluding interest expenses, sub-licensing fees, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses, if applicable, and extraordinary expenses) from exceeding the percentage of that Funds average daily net assets, until at least August 31, 2022, as set forth below:
● | 0.55% for Invesco MSCI Global Timber ETF; |
● | 0.63% for Invesco S&P Global Water Index ETF; and |
● | 0.65% for Invesco Solar ETF. |
The Trustees compared each Funds contractual advisory fee and net expense ratio to information compiled by the Adviser from Lipper Inc. databases on the net advisory fees and net expense ratios of comparable exchange-traded funds (ETFs), open-end (non-ETF) actively-managed funds and open-end (non-ETF) index funds, noting that comparative information for an open-end (non-ETF) index fund was only available for the Invesco MSCI Global Timber ETF. The Trustees noted that each Funds contractual advisory fee was higher than the median net advisory fees of its ETF peer funds and lower than the median net advisory fees of their open-end actively-managed peer funds. The Trustees noted that each Funds net expense ratio was higher than the median net expense ratio of its ETF peers and lower than the median net expense ratio of its open-end actively-managed peer funds. The Trustees noted that a significant component of the non-advisory fee expenses was the sub-license fees paid by the Funds, and noted, with the exception of Invesco S&P
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107 |
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Approval of Investment Advisory Contracts (continued)
Global Water Index ETF, the Adviser has agreed to reimburse the amount equal to the sub-licensing fee paid that causes a Funds annual operating expenses (excluding interest expenses, offering costs, brokerage commissions and other trading expenses, taxes, acquired fund fees and expenses and extraordinary expenses) to exceed the percentage of the Funds average daily net assets as set forth below:
Invesco Fund |
Percentage of Average Daily Net Assets |
Termination Date | ||||||||||||
Invesco MSCI Global Timber ETF | 0.55 | % | December 31, 2020 | |||||||||||
Invesco Solar ETF | 0.70 | % | May 18, 2020 |
The Trustees noted information, including fee information, provided by the Adviser regarding other investment products to which it provides investment advisory services, noting that the Adviser indicated that none of the other investment products have comparable investment strategies to the Funds. The Trustees considered the Advisers explanation of the differences between the services provided to the Funds and to the other investment products it advises, noting the Advisers statement that the management and oversight of the Funds requires substantially more labor and expense.
Based on all the information provided, the Trustees determined that the contractual advisory fee and net expense ratio of each Fund were reasonable and appropriate in light of the services provided, the nature of the indexes, the distinguishing factors of the Funds, and the administrative, operational and management oversight costs for the Adviser.
In conjunction with their review of fees, the Trustees considered information provided by the Adviser on the revenues received by the Adviser under the Investment Advisory Agreement for the Funds, as well as the fees waived and expenses reimbursed by the Adviser for the Funds. The Trustees reviewed information provided by the Adviser on its overall profitability, as well as the estimated profitability to the Adviser from its relationship to each Fund. The Trustees concluded that the overall and estimated profitability to the Adviser was not unreasonable.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. The Trustees reviewed the information provided by the Adviser as to the extent to which economies of scale may be realized as each Fund grows and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees reviewed each Funds asset size, advisory fee, expense ratio and Expense Cap agreed to by the Adviser. The Trustees also noted that the Expense Cap agreement with the Trust provides that the Adviser is entitled to be reimbursed by each Fund for fees waived or expenses absorbed pursuant to the Expense Cap for a period of three years from the date the fee or expense was incurred, provided that no reimbursement would be made that would result in a Fund exceeding its Expense Cap then in effect or in effect at the time the fees and/or expenses subject to reimbursement were waived and/or borne by the Adviser. The Trustees considered whether the advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund, and concluded that the flat advisory fee was reasonable and appropriate.
Fall-out Benefits. The Trustees considered that the Adviser identified no additional benefits it receives from its relationship with the Funds, and noted that the Adviser does not have any soft-dollar arrangements. The Trustees also considered benefits received by affiliates of the Adviser that may be directly or indirectly attributed to the Advisers relationship with the Funds, including brokerage fees and advisory fees for money market cash management vehicles. The Board concluded that the advisory fee was reasonable, taking into account any ancillary benefits received by affiliates of the Adviser.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Investment Advisory Agreement for each Fund. No single factor was determinative in the Boards analysis.
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108 |
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Proxy Voting Policies and Procedures
A description of the Trusts proxy voting policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available, without charge and upon request, by calling (800) 983-0903. This information is also available on the Securities and Exchange Commissions (the Commission) website at www.sec.gov.
Information regarding how each Fund voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, is available, without charge and upon request, by (i) calling (800) 983-0903; or (ii) accessing the Trusts Form N-PX on the Commissions website at www.sec.gov.
Quarterly Portfolios
The Trust files its complete schedule of portfolio holdings for the Funds with the Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Forms N-PORT are available on the Commissions website at www.sec.gov.
Frequency Distribution of Discounts and Premiums
A table showing the number of days the market price of each Funds shares was greater than the Funds net asset value, and the number of days it was less than the Funds net asset value (i.e., premium or discount) for the most recently completed calendar year, and the calendar quarters since that year end (or the life of the Fund, if shorter) may be found at the Funds website at www.invesco.com/ETFs.
©2020 Invesco Capital Management LLC | ||||||
3500 Lacey Road, Suite 700 | ||||||
Downers Grove, IL 60515 | P-PS-SAR-8 | invesco.com/ETFs |
Invesco Semi-Annual Report to Shareholders
April 30, 2020
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PCY
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Invesco Emerging Markets Sovereign Debt ETF
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PGHY
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Invesco Global Short Term High Yield Bond ETF
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PICB | Invesco International Corporate Bond ETF |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you hold accounts through a financial intermediary, you may contact your financial intermediary to enroll in electronic delivery. Please note that not all financial intermediaries may offer this service.
You may elect to receive all future reports in paper free of charge. If you hold accounts through a financial intermediary, you can follow the instructions included with this disclosure, if applicable, or contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Please note that not all financial intermediaries may offer this service. Your election to receive reports in paper will apply to all funds held with your financial intermediary.
2 | ||||
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Liquidity Risk Management Program
The Securities and Exchange Commission (SEC) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the Liquidity Rule) in order to promote effective liquidity risk management throughout the open-end investment company industry, thereby reducing the risk that funds will be unable to meet their redemption obligations and mitigating dilution of the interests of fund shareholders. The Funds have adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the Program). The Program is reasonably designed to assess and manage the Funds liquidity risk, which is the risk that the Funds could not meet redemption requests without significant dilution of remaining investors interests in the Funds. The Board of Trustees of the Funds (the Board) has appointed Invesco Capital Management LLC (Invesco), the Funds investment adviser, as the Programs administrator, and Invesco has delegated oversight of the Program to the Liquidity Risk Management Committee (the Committee), which is composed of senior representatives from relevant business groups at Invesco and its affiliates.
As required by the Liquidity Rule, the Program includes policies and procedures providing for an assessment, no less frequently than annually, of the Funds liquidity risk that takes into account, as relevant to the Funds liquidity risk: (1) each Funds investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Funds during both normal and reasonably foreseeable stressed conditions; (3) each Funds holdings of cash and cash equivalents and any borrowing arrangements; (4) the relationship between the Funds portfolio liquidity and the way in which, and the prices and spreads at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants; and (5) the effect of the composition of baskets on the overall liquidity of each Funds portfolio. The Liquidity Rule also requires the classification of each Funds investments into categories that reflect the assessment of their relative liquidity under current market conditions. Each Fund classifies its investments into one of four categories defined in the Liquidity Rule: Highly Liquid, Moderately Liquid, Less Liquid and Illiquid. Funds that are not invested primarily in Highly Liquid Investments that are assets (cash or investments that are reasonably expected to be convertible into cash within three business days without significantly changing the market value of the investment) are required to establish a Highly Liquid Investment Minimum (HLIM), which is the minimum percentage of net assets that must be invested in Highly Liquid Investments. Funds with HLIMs have procedures for addressing HLIM shortfalls, including reporting to the Board and the SEC (on a non-public basis) as required by the Program and the Liquidity Rule. In addition, a Fund may not acquire an investment if, immediately after the acquisition, over 15% of such Funds net assets would consist of Illiquid Investments that are assets (an investment that cannot reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment). The Liquidity Rule and the Program also require reporting to the Board and the SEC (on a non-public basis) if a Funds holdings of Illiquid Investments exceed 15% of such Funds assets.
At a meeting held on March 12, 2020, the Committee presented a report to the Board that addressed the operation of the Program and assessed the Programs adequacy and effectiveness of implementation (the Report). The Report covered the period from December 1, 2018 through December 31, 2019 (the Program Reporting Period).
The Report stated, in relevant part, that during the Program Reporting Period:
| The Program, as adopted and implemented, remained reasonably designed to assess and manage the Funds liquidity risk and was operated effectively to achieve that goal; |
| Each Funds investment strategy remained appropriate for an open-end fund; |
| Each Fund was able to meet requests for redemption without significant dilution of remaining investors interests in the Fund; |
| The Funds did not breach the 15% limit on Illiquid Investments; and |
| The Funds primarily held Highly Liquid Investments and therefore have not adopted an HLIM. |
3 | ||||
|
| |||
Invesco Emerging Markets Sovereign Debt ETF (PCY)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 | ||||
|
| |||
Invesco Emerging Markets Sovereign Debt ETF (PCY)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 | ||||
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| |||
Invesco Emerging Markets Sovereign Debt ETF (PCY)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $1,762,938,707, which represented 65.61% of the Funds Net Assets. |
(b) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco, Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation |
Realized Gain |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class | $ | 7,086,626 | $ | 146,643,437 | $ | (122,790,529 | ) | $ | - | $ | - | $ | 30,939,534 | $ | 42,265 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 71,589 | 48,270,983 | (48,342,572 | ) | - | - | - | 6,442 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 23,863 | 12,757,354 | (12,782,140 | ) | - | 923 | - | 2,442 | |||||||||||||||||||||||||||
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Total | $ | 7,182,078 | $ | 207,671,774 | $ | (183,915,241 | ) | $ | - | $ | 923 | $ | 30,939,534 | $ | 51,149 | ||||||||||||||||||||
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* | At April 30, 2020, this security was no longer held. |
(c) | The rate shown is the 7-day SEC standardized yield as of April 30, 2020. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 | ||||
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Invesco Emerging Markets Sovereign Debt ETF (PCY)(continued)
April 30, 2020
(Unaudited)
Portfolio Composition | ||||||
Country Breakdown (% of the Funds Net Assets) | ||||||
as of April 30, 2020 | ||||||
China |
3.33 | |||||
Poland |
3.32 | |||||
Croatia |
3.24 | |||||
Hungary |
3.20 | |||||
Chile |
3.19 | |||||
Philippines |
3.17 | |||||
Russia |
3.16 | |||||
Peru |
3.16 | |||||
Panama |
3.11 | |||||
Qatar |
3.10 | |||||
United Arab Emirates |
3.03 | |||||
Indonesia |
2.99 | |||||
Romania |
2.99 | |||||
Jordan |
2.98 | |||||
Turkey |
2.97 | |||||
Kazakhstan |
2.93 | |||||
Saudi Arabia |
2.91 | |||||
Brazil |
2.84 | |||||
Paraguay |
2.84 | |||||
Kenya |
2.81 | |||||
Mongolia |
2.80 | |||||
Egypt |
2.76 | |||||
Colombia |
2.75 | |||||
Bahrain |
2.71 | |||||
Ukraine |
2.69 | |||||
Pakistan |
2.68 | |||||
South Africa |
2.65 | |||||
Mexico |
2.59 | |||||
Costa Rica |
2.53 | |||||
Dominican Republic |
2.50 | |||||
Nigeria |
2.49 | |||||
Oman |
2.49 | |||||
El Salvador |
2.31 | |||||
Sri Lanka |
1.95 | |||||
Angola |
1.40 | |||||
Money Market Funds Plus Other Assets Less Liabilities |
1.43 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 | ||||
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Invesco Global Short Term High Yield Bond ETF (PGHY)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 | ||||
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Invesco Global Short Term High Yield Bond ETF (PGHY)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 | ||||
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Invesco Global Short Term High Yield Bond ETF (PGHY)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
10 | ||||
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Invesco Global Short Term High Yield Bond ETF (PGHY)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
11 | ||||
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Invesco Global Short Term High Yield Bond ETF (PGHY)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
12 | ||||
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Invesco Global Short Term High Yield Bond ETF (PGHY)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
13 | ||||
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Invesco Global Short Term High Yield Bond ETF (PGHY)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
14 | ||||
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Invesco Global Short Term High Yield Bond ETF (PGHY)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
15 | ||||
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Invesco Global Short Term High Yield Bond ETF (PGHY)(continued)
April 30, 2020
(Unaudited)
Notes to Schedule of Investments:
(a) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $112,193,467, which represented 61.61% of the Funds Net Assets. |
(b) | The borrower has filed for protection in federal bankruptcy court. |
(c) | Defaulted security. Currently, the issuer is in default with respect to principal and/or interest payments. The aggregate value of these securities at April 30, 2020 was $79,563, which represented less than 1% of the Funds Net Assets. |
(d) | All or a portion of this security was out on loan at April 30, 2020. |
(e) | Security valued using significant unobservable inputs (Level 3). See Note 4. |
(f) | Acquired as part of the Goodman Networks, Inc. reorganization. |
(g) | All or a portion of this security is Pay-in-Kind. Pay-in-Kind securities pay interest income in the form of securities. |
(h) | Non-income producing security. |
(i) | Acquired as part of the Nine West Holding, Inc. reorganization. |
(j) | Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco, Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six months ended April 30, 2020. |
Value October 31, 2019 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain (Loss) |
Value April 30, 2020 |
Dividend Income | |||||||||||||||||||||||||||||
Investments in Affiliated Money Market Funds: | |||||||||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class | $ | 13,626,659 | $ | 46,137,293 | $ | (55,215,138 | ) | $ | - | $ | - | $ | 4,548,814 | $ | 36,629 | ||||||||||||||||||||
Investments Purchased with Cash Collateral from Securities on Loan: | |||||||||||||||||||||||||||||||||||
Invesco Government & Agency Portfolio, Institutional Class* | 3,425,847 | 13,367,964 | (16,793,811 | ) | - | - | - | 20,072 | |||||||||||||||||||||||||||
Invesco Liquid Assets Portfolio, Institutional Class* | 1,141,882 | 4,648,317 | (5,789,390 | ) | (64 | ) | (745 | ) | - | 7,829 | |||||||||||||||||||||||||
Invesco Private Government Fund | - | 4,364,936 | (2,408,055 | ) | - | - | 1,956,881 | 1 | |||||||||||||||||||||||||||
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Total | $ | 18,194,388 | $ | 68,518,510 | $ | (80,206,394 | ) | $ | (64 | ) | $ | (745 | ) | $ | 6,505,695 | $ | 64,531 | ||||||||||||||||||
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* At April 30, 2020, this security was no longer held.
(k) | The rate shown is the 7-day SEC standardized yield as of April 30, 2020. |
(l) | The rate shown is the 3-day SEC standardized yield as of April 30, 2020. The money market fund commenced operations on April 28, 2020. |
(m) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 2J. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
16 | ||||
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Invesco Global Short Term High Yield Bond ETF (PGHY)(continued)
April 30, 2020
(Unaudited)
Portfolio Composition | ||||||
Sector Breakdown (% of the Funds Net Assets) | ||||||
as of April 30, 2020 | ||||||
Financials |
22.05 | |||||
Sovereign Debt |
9.80 | |||||
Energy |
9.42 | |||||
Consumer Discretionary |
9.21 | |||||
Communication Services |
8.81 | |||||
Materials |
7.79 | |||||
Industrials |
7.71 | |||||
Real Estate |
7.44 | |||||
Information Technology |
4.29 | |||||
Utilities |
3.81 | |||||
Consumer Staples |
3.34 | |||||
Health Care |
2.49 | |||||
Money Market Funds Plus Other Assets Less Liabilities |
3.84 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
17 | ||||
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Invesco International Corporate Bond ETF (PICB)
April 30, 2020
(Unaudited)
Schedule of Investments
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
18 | ||||
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Invesco International Corporate Bond ETF (PICB)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
19 | ||||
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Invesco International Corporate Bond ETF (PICB)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
20 | ||||
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Invesco International Corporate Bond ETF (PICB)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
21 | ||||
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Invesco International Corporate Bond ETF (PICB)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
22 | ||||
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| |||
Invesco International Corporate Bond ETF (PICB)(continued)
April 30, 2020
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
23 | ||||
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Invesco International Corporate Bond ETF (PICB)(continued)
April 30, 2020
(Unaudited)
Investment Abbreviations:
CAD-Canadian Dollar
CHF-Swiss Franc
EUR-Euro
GBP-British Pound Sterling
JPY-Japanese Yen
NOK-Norwegian Krone
SEK-Swedish Krona
Notes to Schedule of Investments:
(a) | Foreign denominated security. Principal amount is denominated in the currency indicated. |
(b) | Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended (the 1933 Act). The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at April 30, 2020 was $85,405,500, which represented 76.36% of the Funds Net Assets. |
Affiliated issuer. The issuer and/or the Fund is a wholly-owned subsidiary of Invesco Ltd., or is affiliated by having an investment adviser that is under common control of Invesco, Ltd. The table below shows the Funds transactions in, and earnings from, its investments in affiliates for the six-month period ended April 30, 2020.
Change in | ||||||||||||||||||||||||||||
Value | Purchases | Proceeds | Unrealized | Realized | Value | Dividend | ||||||||||||||||||||||
October 31, 2019 | at Cost | from Sales | Appreciation | Gain | April 30, 2020 | Income | ||||||||||||||||||||||
Investments in Affiliated Money Market Funds: |
||||||||||||||||||||||||||||
Invesco Premier U.S. Government Money Portfolio, Institutional Class* |
$- | $1,485,614 | $(1,485,614) | $- | $- | $- | $226 |
* | At April 30, 2020, this security was no longer held. |
Portfolio Composition
Sector Breakdown (% of the Funds Net Assets)
as of April 30, 2020
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
24 | ||||
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Statements of Assets and Liabilities
April 30, 2020
Invesco | |||||||||||||||
Invesco Emerging | Global Short Term | Invesco International | |||||||||||||
Markets Sovereign | High Yield Bond | Corporate Bond | |||||||||||||
Debt ETF (PCY) | ETF (PGHY) | ETF (PICB) | |||||||||||||
Assets: | |||||||||||||||
Unaffiliated investments in securities, at value(a) |
$ | 2,648,393,465 | $ | 175,108,566 | $ | 110,467,676 | |||||||||
Affiliated investments in securities, at value |
30,939,534 | 6,505,695 | - | ||||||||||||
Cash |
17,716,727 | - | - | ||||||||||||
Foreign currencies, at value |
- | - | 307,990 | ||||||||||||
Deposits with brokers: |
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Cash segregated as collateral |
11,860,514 | - | - | ||||||||||||
Receivable for: |
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Dividends and interest |
39,277,985 | 3,984,776 | 1,072,653 | ||||||||||||
Securities lending |
102 | 2,863 | - | ||||||||||||
Investments sold |
33,531,305 | 127,488 | 2,132,428 | ||||||||||||
Fund shares sold |
46,570,046 | - | - | ||||||||||||
Foreign tax reclaims |
- | - | 50,658 | ||||||||||||
Investments matured, at value |
- | 1,775,179 | - | ||||||||||||
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Total assets |
2,828,289,678 | 187,504,567 | 114,031,405 | ||||||||||||
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Liabilities: | |||||||||||||||
Due to custodian |
- | 33,503 | 53,199 | ||||||||||||
Due to foreign custodian |
- | 29 | - | ||||||||||||
Payable for: |
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Investments purchased |
126,623,111 | 3,366,988 | 2,085,256 | ||||||||||||
Collateral upon return of securities loaned |
- | 1,956,881 | - | ||||||||||||
Collateral upon receipt of securities in-kind |
11,860,514 | - | - | ||||||||||||
Fund shares repurchased |
1,861,603 | - | - | ||||||||||||
Accrued unitary management fees |
1,075,682 | 53,966 | 44,092 | ||||||||||||
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Total liabilities |
141,420,910 | 5,411,367 | 2,182,547 | ||||||||||||
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Net Assets | $ | 2,686,868,768 | $ | 182,093,200 | $ | 111,848,858 | |||||||||
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Net assets consist of: | |||||||||||||||
Shares of beneficial interest |
$ | 3,427,564,116 | $ | 219,607,393 | $ | 113,216,319 | |||||||||
Distributable earnings (loss) |
(740,695,348 | ) | (37,514,193 | ) | (1,367,461 | ) | |||||||||
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Net Assets | $ | 2,686,868,768 | $ | 182,093,200 | $ | 111,848,858 | |||||||||
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Shares outstanding (unlimited amount authorized, $0.01 par value) |
108,900,000 | 8,850,000 | 4,300,000 | ||||||||||||
Net asset value |
$ | 24.67 | $ | 20.58 | $ | 26.01 | |||||||||
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Market price |
$ | 24.46 | $ | 20.46 | $ | 25.90 | |||||||||
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Unaffiliated investments in securities, at cost |
$ | 2,875,936,938 | $ | 198,321,856 | $ | 111,581,435 | |||||||||
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Affiliated investments in securities, at cost |
$ | 30,939,534 | $ | 6,505,695 | $ | - | |||||||||
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Foreign currencies (due to foreign custodian), at cost |
$ | - | $ | (33 | ) | $ | 302,860 | ||||||||
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Investments matured, at cost |
$ | - | $ | 6,391,902 | $ | - | |||||||||
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(a)Includes securities on loan with an aggregate value of: |
$ | - | $ | 1,875,403 | $ | - | |||||||||
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See accompanying Notes to Financial Statements which are an integral part of the financial statements.
25 | ||||
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For the six months ended April 30, 2020
(Unaudited)
Invesco | |||||||||||||||
Invesco Emerging | Global Short Term | Invesco International | |||||||||||||
Markets Sovereign | High Yield Bond | Corporate Bond | |||||||||||||
Debt ETF (PCY) | ETF (PGHY) | ETF (PICB) | |||||||||||||
Investment income: | |||||||||||||||
Unaffiliated interest income |
$ | 83,968,992 | $ | 6,198,817 | $ | 1,021,585 | |||||||||
Affiliated dividend income |
45,265 | 36,629 | 226 | ||||||||||||
Securities lending income |
1,312 | 32,101 | - | ||||||||||||
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Total investment income |
84,015,569 | 6,267,547 | 1,021,811 | ||||||||||||
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Expenses: | |||||||||||||||
Unitary management fees |
8,202,057 | 387,699 | 275,953 | ||||||||||||
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Less: Waivers |
(6,797 | ) | (5,191 | ) | (39 | ) | |||||||||
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Net expenses |
8,195,260 | 382,508 | 275,914 | ||||||||||||
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Net investment income |
75,820,309 | 5,885,039 | 745,897 | ||||||||||||
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Realized and unrealized gain (loss) from: | |||||||||||||||
Net realized gain (loss) from: |
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Unaffiliated investment securities |
(198,015,049 | ) | (4,151,907 | ) | (201,447 | ) | |||||||||
Affiliated investment securities |
923 | (745 | ) | - | |||||||||||
In-kind redemptions |
1,434,764 | (749,146 | ) | 8,527 | |||||||||||
Foreign currencies |
- | - | (50,529 | ) | |||||||||||
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Net realized gain (loss) |
(196,579,362 | ) | (4,901,798 | ) | (243,449 | ) | |||||||||
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Change in net unrealized appreciation (depreciation) of: |
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Unaffiliated investment securities |
(303,139,100 | ) | (17,794,296 | ) | (3,800,636 | ) | |||||||||
Affiliated investment securities |
- | (64 | ) | - | |||||||||||
Foreign currencies |
- | 1 | (23,324 | ) | |||||||||||
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Change in net unrealized appreciation (depreciation) |
(303,139,100 | ) | (17,794,359 | ) | (3,823,960 | ) | |||||||||
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Net realized and unrealized gain (loss) |
(499,718,462 | ) | (22,696,157 | ) | (4,067,409 | ) | |||||||||
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Net increase (decrease) in net assets resulting from operations |
$ | (423,898,153 | ) | $ | (16,811,118 | ) | $ | (3,321,512 | ) | ||||||
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See accompanying Notes to Financial Statements which are an integral part of the financial statements.
26 | ||||
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(This Page Intentionally Left Blank)
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Statements of Changes in Net Assets
For the six months ended April 30, 2020 and the year ended October 31, 2019
(Unaudited)
Invesco Emerging Markets Sovereign | Invesco Global Short Term High | |||||||||||||||||||
Debt ETF (PCY) | Yield Bond ETF (PGHY) | |||||||||||||||||||
Six Months Ended | Year Ended | Six Months Ended | Year Ended | |||||||||||||||||
April 30, | October 31, | April 30, | October 31, | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Operations: | ||||||||||||||||||||
Net investment income |
$ | 75,820,309 | $ | 175,865,677 | $ | 5,885,039 | $ | 11,522,396 | ||||||||||||
Net realized gain (loss) |
(196,579,362 | ) | (49,242,012 | ) | (4,901,798 | ) | (2,613,544 | ) | ||||||||||||
Change in net unrealized appreciation (depreciation) |
(303,139,100 | ) | 413,622,952 | (17,794,359 | ) | (650,969 | ) | |||||||||||||
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Net increase (decrease) in net assets resulting from operations |
(423,898,153 | ) | 540,246,617 | (16,811,118 | ) | 8,257,883 | ||||||||||||||
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Distributions to Shareholders from: | ||||||||||||||||||||
Distributable earnings |
(83,958,915 | ) | (176,845,023 | ) | (6,106,642 | ) | (11,538,702 | ) | ||||||||||||
Return of capital |
- | - | - | - | ||||||||||||||||
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Total distributions to shareholders |
(83,958,915 | ) | (176,845,023 | ) | (6,106,642 | ) | (11,538,702 | ) | ||||||||||||
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Shareholder Transactions: | ||||||||||||||||||||
Proceeds from shares sold |
355,642,272 | 1,421,704,253 | 12,555,351 | 27,735,589 | ||||||||||||||||
Value of shares repurchased |
(696,303,762 | ) | (1,954,083,096 | ) | (38,021,588 | ) | (10,377,575 | ) | ||||||||||||
Transaction fees |
- | - | - | - | ||||||||||||||||
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Net increase (decrease) in net assets resulting from share transactions |
(340,661,490 | ) | (532,378,843 | ) | (25,466,237 | ) | 17,358,014 | |||||||||||||
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Net increase (decrease) in net assets |
(848,518,558 | ) | (168,977,249 | ) | (48,383,997 | ) | 14,077,195 | |||||||||||||
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Net assets: | ||||||||||||||||||||
Beginning of period |
3,535,387,326 | 3,704,364,575 | 230,477,197 | 216,400,002 | ||||||||||||||||
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End of period |
$ | 2,686,868,768 | $ | 3,535,387,326 | $ | 182,093,200 | $ | 230,477,197 | ||||||||||||
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Changes in Shares Outstanding: | ||||||||||||||||||||
Shares sold |
13,600,000 | 50,200,000 | 550,000 | 1,200,000 | ||||||||||||||||
Shares repurchased |
(26,100,000 | ) | (70,200,000 | ) | (1,800,000 | ) | (450,000 | ) | ||||||||||||
Shares outstanding, beginning of period |
121,400,000 | 141,400,000 | 10,100,000 | 9,350,000 | ||||||||||||||||
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Shares outstanding, end of period |
108,900,000 | 121,400,000 | 8,850,000 | 10,100,000 | ||||||||||||||||
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See accompanying Notes to Financial Statements which are an integral part of the financial statements.
28 | ||||
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Invesco International Corporate | ||||||||
Bond ETF (PICB) | ||||||||
Six Months Ended | Year Ended | |||||||
April 30, | October 31, | |||||||
2020 | 2019 | |||||||
$ | 745,897 | $ | 1,741,353 | |||||
(243,449 | ) | (1,001,104 | ) | |||||
(3,823,960 | ) | 8,263,168 | ||||||
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(3,321,512 | ) | 9,003,417 | ||||||
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(767,747 | ) | (1,050,715 | ) | |||||
- | (702,713 | ) | ||||||
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(767,747 | ) | (1,753,428 | ) | |||||
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5,399,375 | 2,597,030 | |||||||
(1,339,036 | ) | (16,941,838 | ) | |||||
- | 3,257 | |||||||
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4,060,339 | (14,341,551 | ) | ||||||
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(28,920 | ) | (7,091,562 | ) | |||||
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111,877,778 | 118,969,340 | |||||||
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$ | 111,848,858 | $ | 111,877,778 | |||||
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200,000 | 100,000 | |||||||
(50,000 | ) | (650,000 | ) | |||||
4,150,000 | 4,700,000 | |||||||
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4,300,000 | 4,150,000 | |||||||
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29 | ||||
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Invesco Emerging Markets Sovereign Debt ETF (PCY)
Six Months Ended | ||||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: |
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Net asset value at beginning of period |
$ | 29.12 | $ | 26.20 | $ | 29.62 | $ | 29.81 | $ | 28.08 | $ | 29.03 | ||||||||||||||||||
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Net investment income(a) |
0.65 | 1.41 | 1.26 | 1.45 | 1.46 | 1.48 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(4.38 | ) | 2.93 | (3.42 | ) | (0.17 | ) | 1.74 | (0.97 | ) | ||||||||||||||||||||
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Total from investment operations |
(3.73 | ) | 4.34 | (2.16 | ) | 1.28 | 3.20 | 0.51 | ||||||||||||||||||||||
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Distributions to shareholders from: |
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Net investment income |
(0.72 | ) | (1.42 | ) | (1.26 | ) | (1.46 | ) | (1.47 | ) | (1.46 | ) | ||||||||||||||||||
Return of capital |
- | - | - | (0.01 | ) | - | - | |||||||||||||||||||||||
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Total distributions |
(0.72 | ) | (1.42 | ) | (1.26 | ) | (1.47 | ) | (1.47 | ) | (1.46 | ) | ||||||||||||||||||
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Net asset value at end of period |
$ | 24.67 | $ | 29.12 | $ | 26.20 | $ | 29.62 | $ | 29.81 | $ | 28.08 | ||||||||||||||||||
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Market price at end of period(b) |
$ | 24.46 | $ | 29.13 | $ | 26.13 | $ | 29.62 | $ | 29.70 | $ | 28.02 | ||||||||||||||||||
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Net Asset Value Total Return(c) |
(13.00 | )% | 16.91 | % | (7.42 | )% | 4.49 | % | 11.79 | % | 1.87 | % | ||||||||||||||||||
Market Price Total Return(c) |
(13.77 | )% | 17.28 | % | (7.66 | )% | 4.88 | % | 11.61 | % | 1.49 | % | ||||||||||||||||||
Ratios/Supplemental Data: |
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Net assets at end of period (000s omitted) |
$ | 2,686,869 | $ | 3,535,387 | $ | 3,704,365 | $ | 4,970,710 | $ | 4,125,597 | $ | 2,653,385 | ||||||||||||||||||
Ratio to average net assets of: |
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Expenses |
0.50 | %(d) | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||||||||
Net investment income |
4.62 | %(d) | 5.03 | % | 4.51 | % | 4.98 | % | 5.06 | % | 5.25 | % | ||||||||||||||||||
Portfolio turnover rate(e) |
19 | % | 28 | % | 54 | % | 30 | % | 30 | % | 27 | % |
(a) | Based on average shares outstanding. |
(b) | The mean between the last bid and ask prices. |
(c) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(d) | Annualized. |
(e) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
30 | ||||
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Financial Highlights(continued)
Invesco Global Short Term High Yield Bond ETF (PGHY)
Six Months Ended | ||||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: |
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Net asset value at beginning of period |
$ | 22.82 | $ | 23.14 | $ | 24.14 | $ | 24.16 | $ | 23.50 | $ | 24.12 | ||||||||||||||||||
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Net investment income(a) |
0.59 | 1.20 | 1.24 | 1.34 | 1.51 | 1.04 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(2.21 | ) | (0.32 | ) | (1.00 | ) | 0.02 | 0.59 | (0.62 | ) | ||||||||||||||||||||
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Total from investment operations |
(1.62 | ) | 0.88 | 0.24 | 1.36 | 2.10 | 0.42 | |||||||||||||||||||||||
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Distributions to shareholders from: |
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Net investment income |
(0.62 | ) | (1.20 | ) | (1.24 | ) | (1.37 | ) | (1.42 | ) | (1.03 | ) | ||||||||||||||||||
Return of capital |
- | - | - | (0.01 | ) | (0.02 | ) | (0.01 | ) | |||||||||||||||||||||
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Total distributions |
(0.62 | ) | (1.20 | ) | (1.24 | ) | (1.38 | ) | (1.44 | ) | (1.04 | ) | ||||||||||||||||||
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Net asset value at end of period |
$ | 20.58 | $ | 22.82 | $ | 23.14 | $ | 24.14 | $ | 24.16 | $ | 23.50 | ||||||||||||||||||
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Market price at end of period(b) |
$ | 20.46 | $ | 22.81 | $ | 23.03 | $ | 24.19 | $ | 24.23 | $ | 23.37 | ||||||||||||||||||
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Net Asset Value Total Return(c) |
(7.24 | )% | 3.90 | % | 1.05 | % | 5.76 | % | 9.27 | % | 1.83 | % | ||||||||||||||||||
Market Price Total Return(c) |
(7.71 | )% | 4.36 | % | 0.36 | % | 5.66 | % | 10.17 | % | 1.61 | % | ||||||||||||||||||
Ratios/Supplemental Data: |
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Net assets at end of period (000s omitted) |
$ | 182,093 | $ | 230,477 | $ | 216,400 | $ | 222,093 | $ | 68,862 | $ | 27,029 | ||||||||||||||||||
Ratio to average net assets of: |
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Expenses |
0.35 | %(d) | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | ||||||||||||||||||
Net investment income |
5.31 | %(d) | 5.21 | % | 5.25 | % | 5.52 | % | 6.43 | % | 4.43 | % | ||||||||||||||||||
Portfolio turnover rate(e) |
28 | % | 57 | % | 42 | % | 38 | % | 53 | % | 50 | % |
(a) | Based on average shares outstanding. |
(b) | The mean between the last bid and ask prices. |
(c) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(d) | Annualized. |
(e) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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Financial Highlights(continued)
Invesco International Corporate Bond ETF (PICB)
Six Months Ended | ||||||||||||||||||||||||||||||
April 30, | ||||||||||||||||||||||||||||||
2020 | Years Ended October 31, | |||||||||||||||||||||||||||||
(Unaudited) | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||||||||
Net asset value at beginning of period |
$ | 26.96 | $ | 25.31 | $ | 26.88 | $ | 25.08 | $ | 25.95 | $ | 28.77 | ||||||||||||||||||
Net investment income(a) |
0.18 | 0.39 | 0.43 | 0.42 | 0.55 | 0.62 | ||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(0.95 | ) | 1.65 | (1.57 | ) | 1.80 | (0.86 | ) | (2.82 | ) | ||||||||||||||||||||
Total from investment operations |
(0.77 | ) | 2.04 | (1.14 | ) | 2.22 | (0.31 | ) | (2.20 | ) | ||||||||||||||||||||
Distributions to shareholders from: |
||||||||||||||||||||||||||||||
Net investment income |
(0.18 | ) | (0.23 | ) | (0.43 | ) | (0.23 | ) | - | (0.03 | ) | |||||||||||||||||||
Return of capital |
- | (0.16 | ) | - | (0.19 | ) | (0.56 | ) | (0.59 | ) | ||||||||||||||||||||
Total distributions |
(0.18 | ) | (0.39 | ) | (0.43 | ) | (0.42 | ) | (0.56 | ) | (0.62 | ) | ||||||||||||||||||
Transaction fees |
- | 0.00 | (b) | - | 0.00 | (b) | 0.00 | (b) | 0.00 | (b) | ||||||||||||||||||||
Net asset value at end of period |
$ | 26.01 | $ | 26.96 | $ | 25.31 | $ | 26.88 | $ | 25.08 | $ | 25.95 | ||||||||||||||||||
Market price at end of period(c) |
$ | 25.90 | $ | 26.84 | $ | 25.28 | $ | 26.89 | $ | 25.02 | $ | 25.89 | ||||||||||||||||||
Net Asset Value Total Return(d) | (2.85 | )% | 8.12 | % | (4.31 | )% | 8.95 | % | (1.26 | )% | (7.73 | )% | ||||||||||||||||||
Market Price Total Return(d) | (2.83 | )% | 7.77 | % | (4.46 | )% | 9.25 | % | (1.26 | )% | (7.94 | )% | ||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||
Net assets at end of period (000s omitted) |
$ | 111,849 | $ | 111,878 | $ | 118,969 | $ | 159,963 | $ | 160,539 | $ | 189,454 | ||||||||||||||||||
Ratio to average net assets of: |
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Expenses |
0.50 | %(e) | 0.51 | %(f) | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||||||||
Net investment income |
1.35 | %(e) | 1.49 | %(f) | 1.58 | % | 1.62 | % | 2.12 | % | 2.29 | % | ||||||||||||||||||
Portfolio turnover rate(g) |
7 | % | 23 | % | 12 | % | 14 | % | 24 | % | 13 | % |
(a) | Based on average shares outstanding. |
(b) | Amount represents less than $0.005. |
(c) | The mean between the last bid and ask prices. |
(d) | Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Market price total return is calculated assuming an initial investment made at the market price at the beginning of the period, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. Total investment returns calculated for a period of less than one year are not annualized. |
(e) | Annualized. |
(f) | Ratios include non-recurring costs associated with a proxy statement of 0.01%. |
(g) | Portfolio turnover rate is not annualized for periods less than one year, if applicable, and does not include securities received or delivered from processing creations or redemptions. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
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Invesco Exchange-Traded Fund Trust II
April 30, 2020
(Unaudited)
NOTE 1Organization
Invesco Exchange-Traded Fund Trust II (the Trust) was organized as a Massachusetts business trust on October 10, 2006 and is authorized to have multiple series of portfolios. The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act). This report includes the following portfolios:
Full Name | Short Name | |
Invesco Emerging Markets Sovereign Debt ETF (PCY) | Emerging Markets Sovereign Debt ETF | |
Invesco Global Short Term High Yield Bond ETF (PGHY) | Global Short Term High Yield Bond ETF | |
Invesco International Corporate Bond ETF (PICB) | International Corporate Bond ETF |
Each portfolio (each, a Fund, and collectively, the Funds) represents a separate series of the Trust. The shares of the Funds are referred to herein as Shares or Funds Shares. Each Funds Shares are listed and traded on NYSE Arca, Inc.
The market price of each Share may differ to some degree from a Funds net asset value (NAV). Unlike conventional mutual funds, each Fund issues and redeems Shares on a continuous basis, at NAV, only in a large specified number of Shares, each called a Creation Unit. Creation Units of each Fund are issued and redeemed principally in exchange for the deposit or delivery of a basket of securities (Deposit Securities). Except when aggregated in Creation Units by Authorized Participants, the Shares are not individually redeemable securities of the Funds.
The investment objective of each Fund is to seek to track the investment results (before fees and expenses) of its respective index listed below (each, an Underlying Index):
Fund | Underlying Index | |
Emerging Markets Sovereign Debt ETF | DBIQ Emerging Market USD Liquid Balanced Index | |
Global Short Term High Yield Bond ETF | DB Global Short Maturity High Yield Bond Index | |
International Corporate Bond ETF | S&P International Corporate Bond Index® |
NOTE 2Significant Accounting Policies
The following is a summary of the significant accounting policies followed by the Funds in preparation of their financial statements.
Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial ServicesInvestment Companies.
A. | Security Valuation - Securities, including restricted securities, are valued according to the following policies: |
A security listed or traded on an exchange (except convertible securities) is generally valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded or, lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and asked prices from the exchange on which they are principally traded, or at the final settlement price set by such exchange. Swaps and options not listed on an exchange are valued by an independent source. For purposes of determining NAV per Share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investment companies are valued using such companys NAV per share, unless the shares are exchange-traded, in which case they are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Securities with a demand feature exercisable within one to seven days are valued at par. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a Fund may hold or transact in the same
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securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the London world markets. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that Invesco Capital Management LLC (the Adviser) determines are significant and make the closing price unreliable, a Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, the potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value exchange-traded equity securities. The mean between the last bid and asked prices may be used to value debt obligations, including corporate loans, and unlisted equity securities.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith following procedures approved by the Board of Trustees. Issuer-specific events, market trends, bid/asked quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
Each Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain Fund investments.
Valuations change in response to many factors, including the historical and prospective earnings of the issuer, the value of the issuers assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or adverse investor sentiment generally and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Other Risks |
Authorized Participant Concentration Risk. Only Authorized Participants (APs) may engage in creation or redemption transactions directly with each Fund. Each Fund has a limited number of institutions that may act as APs, and such APs have no obligation to submit creation or redemption orders. Consequently, there is no assurance that APs will establish or maintain an active trading market for the Shares. This risk may be heightened to the extent that securities held by each Fund are traded outside a collateralized settlement system. In that case, APs may be required to post collateral on certain trades on an agency basis (i.e., on behalf of other market participants), which only a limited number of APs may be able to do. In addition, to the extent that APs exit the business or are unable to proceed with creation and/or redemption orders with respect to each Fund and no other AP is able to step forward to create or redeem Creation Units, this may result in a significantly diminished trading market for Shares, and Shares may be more likely to trade at a premium or discount to each Funds NAV and to face trading halts and/or delisting. Investments in non-U.S. securities, which may have lower trading volumes, may increase this risk.
Call Risk. If interest rates fall, it is possible that issuers of callable securities with high interest coupons will call (or prepay) their bonds before their maturity date. If an issuer exercises such a call during a period of declining interest rates, a Fund may have to replace such called security with a lower yielding security. If that were to happen, such Funds net investment income could fall.
Changing Global Fixed-Income Market Conditions Risk. The current historically low interest rate environment was created in part by the Federal Reserve Board (FRB) and certain foreign central banks keeping the federal funds and equivalent foreign rates at, near or below zero. The tapering in 2015 of the FRBs quantitative easing program, combined with the FRBs changes to the target range for the Federal Funds Rate (and continued possible fluctuations in equivalent foreign rates) may
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expose fixed-income markets to heightened volatility and reduced liquidity for certain fixed-income investments, particularly those with longer maturities, although it is difficult to predict the impact of this rate increase and any future rate increases on various markets. In addition, decreases in fixed-income dealer market-making capacity may also potentially lead to heightened volatility and reduced liquidity in the fixed-income markets. As a result, the value of the Funds investments and share price may decline. Changes in central bank policies could also result in higher than normal shareholder redemptions, which could potentially increase portfolio turnover rate and each Funds transaction costs.
Fixed-Income Securities Risk. Fixed-income securities are subject to interest rate risk and credit risk. Interest rate risk refers to fluctuations in the value of a fixed-income security resulting from changes in the general level of interest rates. When the general level of interest rates goes up, the prices of most fixed-income securities go down. When the general level of interest rates goes down, the prices of most fixed-income securities go up. Fixed-income securities with longer maturities typically are more sensitive to changes in interest rates, making them more volatile than securities with shorter maturities. Credit risk refers to the possibility that the issuer of a security will be unable and/or unwilling to make timely interest payments and/or repay the principal on its debt. Debt instruments are subject to varying degrees of credit risk, which may be reflected in credit ratings. There is a possibility that the credit rating of a fixed-income security may be downgraded after purchase, which may adversely affect the value of the security.
Foreign Fixed-Income Investment Risk. Investments in fixed-income securities of non-U.S. issuers are subject to the same risks as other debt securities, notably credit risk, market risk, interest rate risk and liquidity risk, while also facing risks beyond those associated with investments in U.S. securities. For example, foreign securities may have relatively low market liquidity, greater market volatility, decreased publicly available information, and less reliable financial information about issuers, and inconsistent and potentially less stringent accounting, auditing and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Foreign securities also are subject to the risks of expropriation, nationalization, political instability or other adverse political or economic developments and the difficulty of enforcing obligations in other countries. Investments in foreign securities also may be subject to dividend withholding or confiscatory taxes, currency blockage and/or transfer restrictions and higher transactional costs.
Geographic Concentration Risk. A natural or other disaster could occur in a country or geographic region in which a Fund invests, which could affect the economy or particular business operations of companies in that specific country or geographic region and adversely impact the Funds investments in the affected country or region.
Index Risk. Unlike many investment companies, each Fund does not utilize an investing strategy that seeks returns in excess of its Underlying Index. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its Underlying Index, even if that security generally is underperforming. Additionally, each Fund rebalances its portfolio in accordance with its Underlying Index, and, therefore, any changes to the Underlying Indexs rebalance schedule will result in corresponding changes to each Funds rebalance schedule.
Industry Concentration Risk. In following its methodology, each Funds Underlying Index from time to time may be concentrated to a significant degree in securities of issuers operating in a single industry or industry group. To the extent that each Underlying Index concentrates in the securities of issuers in a particular industry or industry group, the corresponding Fund will also concentrate its investments to approximately the same extent. By concentrating its investments in an industry or industry group, each Fund may face more risks than if it were diversified broadly over numerous industries or industry groups. Such industry-based risks, any of which may adversely affect the companies in which each Fund invests, may include, but are not limited to, legislative or regulatory changes, adverse market conditions and/or increased competition within the industry or industry group. In addition, at times, such industry or industry group may be out of favor and underperform other industries, industry groups or the market as a whole.
Liquidity Risk. For certain Funds, liquidity risk exists when a particular investment is difficult to purchase or sell. If the Fund invests in illiquid securities or current portfolio securities become illiquid, it may reduce the returns of the Fund because the Fund may be unable to sell the illiquid securities at an advantageous time or price.
Market Risk. Securities in the Underlying Index are subject to market fluctuations. You should anticipate that the value of the Shares will decline more or less, in correlation with any decline in value of the securities in the Underlying Index. Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to each Funds NAV.
Non-Correlation Risk. Each Funds return may not match the return of its corresponding Underlying Index for a number of reasons. For example, each Fund incurs operating expenses not applicable to the Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the Funds securities holdings to reflect changes in the composition of its corresponding Underlying Index. Additionally, a Funds use of a representative sampling approach may cause the Fund not to be as well-correlated with the return of its corresponding Underlying Index as would be the case if the Fund purchased all of the securities in its corresponding Underlying Index in the proportions represented in the Underlying Index. In addition, the performance of each Fund and its corresponding Underlying Index may vary due to asset valuation differences and differences between each Funds portfolio and its corresponding Underlying Index resulting from legal restrictions, costs or liquidity constraints.
Non-Investment Grade Securities Risk. Certain Funds invest in non-investment grade securities. Non-investment grade securities and unrated securities of comparable credit quality are considered speculative and are subject to the increased risk
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of an issuers inability to meet principal and interest payment obligations. These securities may be subject to greater price volatility due to such factors as specific corporate developments, interest rate sensitivity, negative perceptions of the non-investment grade securities markets generally, real or perceived adverse economic and competitive industry conditions and less secondary market liquidity. If the issuer of non-investment grade securities defaults, a Fund may incur additional expenses to seek recovery.
Sampling Risk. Certain Funds use of a representative sampling approach may result in the Fund holding a smaller number of securities than are in its respective Underlying Index. As a result, an adverse development to an issuer of securities that the Fund holds could result in a greater decline in NAV than would be the case if the Fund held all of the securities in its Underlying Index. To the extent the assets in the Fund are smaller, these risks will be greater.
Valuation Risk. Financial information related to securities of non-U.S. issuers may be less reliable than information related to securities of U.S. issuers, which may make it difficult to obtain a current price for a non-U.S. security held by a Fund. In certain circumstances, market quotations may not be readily available for some Fund securities, and those securities may be fair valued. The value established for a security through fair valuation may be different from what would be produced if the security had been valued using market quotations. Fund securities that are valued using techniques other than market quotations, including fair valued securities, may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. In addition, there is no assurance that a Fund could sell a portfolio security for the value established for it at any time, and it is possible that a Fund would incur a loss because a security is sold at a discount to its established value.
C. | Investment Transactions and Investment Income - Investment transactions are accounted for on a trade date basis. Realized gains and losses from the sale or disposition of securities are computed on the specific identified cost basis. Interest income is recorded on an accrual basis from settlement date. Pay-in-kind interest income and non-cash dividend income received in the form of securities in-lieu of cash are recorded at the fair value of the securities received. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Realized gains, dividends and interest received by a Fund may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. |
The Funds may periodically participate in litigation related to each Funds investments. As such, the Funds may receive proceeds from litigation settlements. Any proceeds received are included in the Statements of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statements of Operations and the Statements of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of each Funds NAV and, accordingly, they reduce each Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statements of Operations and the Statements of Changes in Net Assets, or the net investment income per share and the ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between each Fund and the Adviser.
D. | Country Determination - For the purposes of presentation in the Schedules of Investments, the Adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include whether each Funds Underlying Index has made a country determination and may include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
E. | Dividends and Distributions to Shareholders - Each Fund declares and pays dividends from net investment income, if any, to its shareholders monthly and records such dividends on the ex-dividend date. Generally, each Fund distributes net realized taxable capital gains, if any, annually in cash and records them on the ex-dividend date. Such distributions on a tax basis are determined in conformity with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America (GAAP). Distributions in excess of tax basis earnings and profits, if any, are reported in each Funds financial statements as a tax return of capital at fiscal year-end. |
F. | Federal Income Taxes - Each Fund intends to comply with the provisions of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), applicable to regulated investment companies and to distribute substantially all of the Funds taxable earnings to its shareholders. As such, the Funds will not be subject to federal income taxes on otherwise taxable income (including net realized gains) that is distributed to the shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
Each Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed each Funds uncertain tax positions and concluded that no liability for unrecognized tax
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benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing book and tax treatments for in-kind transactions, losses deferred due to wash sales, and passive foreign investment company adjustments, if any.
The Funds file U.S. federal tax returns and tax returns in certain other jurisdictions. Generally, a Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
G. | Expenses - Each Fund has agreed to pay an annual unitary management fee to the Adviser. Out of the unitary management fee, the Adviser has agreed to pay for substantially all expenses of the Funds, including the costs of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses. |
Expenses of the Trust that are excluded from a Funds unitary management fee and are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust that are excluded from a Funds unitary management fee and are not readily identifiable to a specific Fund are allocated in such a manner as deemed equitable, taking into consideration the nature and type of expense and the relative net assets of each Fund.
To the extent a Fund invests in other investment companies, the expenses shown in the accompanying financial statements reflect the expenses of the Fund and do not include any expenses of the investment companies in which it invests. The effects of such investment companies expenses are included in the realized and unrealized gain or loss on the investments in the investment companies.
H. | Accounting Estimates - The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements, including estimates and assumptions related to taxation. Actual results could differ from these estimates. In addition, the Funds monitor for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
I. | Indemnifications - Under the Trusts organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. Each Board member who is not an interested person (as defined in the 1940 Act) of the Trust (each, an Independent Trustee) is also indemnified against certain liabilities arising out of the performance of their duties to the Trust pursuant to an Indemnification Agreement between such trustee and the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trusts maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. However, based on experience, the Trust believes the risk of loss to be remote. |
J. | Securities Lending - Each Fund may participate in securities lending and may loan portfolio securities having a market value up to one-third of the Funds total assets. Such loans are secured by cash collateral equal to no less than 102% (105% for international securities) of the market value of the loaned securities determined daily by the securities lending provider. Cash collateral received in connection with these loans is generally invested in an affiliated money market fund and is shown as such on the Schedules of Investments. Each Fund bears the risk of loss with respect to the investment of collateral. It is the policy of these Funds to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. When loaning securities, each Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. Lending securities entails a risk of loss to each Fund if, and to the extent that, the market value of the securities loaned were to increase, and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. The securities loaned are subject to termination at the option of the borrower or each Fund. Upon termination, the borrower will return to each Fund the securities loaned and each Fund will return the collateral. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. Each Fund could experience delays and costs in gaining access to the collateral and the securities may lose value during the delay which could result in potential losses to each Fund. Some of these losses may be indemnified by the lending agent. Each Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. For Funds that participated in securities lending, dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, are included in Securities lending income on the Statements of Operations. The aggregate value of securities out on loan, if any, is shown on the Statements of Assets and Liabilities. |
K. | Foreign Currency Translations - Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. Each Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of |
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securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statements of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on each Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period-end, resulting from changes in exchange rates.
Each Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which each Fund invests.
NOTE 3Investment Advisory Agreement and Other Agreements
The Trust has entered into an Investment Advisory Agreement with the Adviser on behalf of each Fund, pursuant to which the Adviser has overall responsibility for the selection and ongoing monitoring of the Funds investments, managing the Funds business affairs and providing certain clerical, bookkeeping and other administrative services.
Pursuant to the Investment Advisory Agreement, each Fund accrues daily and pays monthly to the Adviser an annual unitary management fee equal to a percentage of its average daily net assets. Out of the unitary management fee, the Adviser has agreed to pay for substantially all expenses of the Funds, including the cost of transfer agency, custody, fund administration, legal, audit and other services, except for advisory fees, distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses. The annual unitary management fee paid by each Fund to the Adviser is equal to a percentage of each Funds average daily net assets as follows:
Unitary Management Fees (as a % of average daily net assets) | ||
Emerging Markets Sovereign Debt ETF |
0.50% | |
Global Short Term High Yield Bond ETF |
0.35% | |
International Corporate Bond ETF |
0.50% |
Further, through at least August 31, 2022, the Adviser has contractually agreed to waive a portion of each Funds management fee in an amount equal to 100% of the net advisory fees an affiliate of the Adviser receives that are attributable to the Funds investments of otherwise uninvested cash in money market funds managed by that affiliate (excluding investments of cash collateral from securities lending). There is no guarantee that the Adviser will extend the waiver of these fees past that date.
For the six-month period ended April 30, 2020, the Adviser waived fees for each Fund in the following amounts:
Emerging Markets Sovereign Debt ETF |
$ | 6,797 | ||
Global Short Term High Yield Bond ETF |
5,191 | |||
International Corporate Bond ETF |
39 |
The Trust has entered into a Distribution Agreement with Invesco Distributors, Inc. (the Distributor), which serves as the distributor of Creation Units for each Fund. The Distributor does not maintain a secondary market in the Shares. The Funds are not charged any fees pursuant to the Distribution Agreement. The Distributor is an affiliate of the Adviser.
The Adviser has entered into a licensing agreement for each Fund with the following entities (each, a Licensor):
Fund |
Licensor | |
Emerging Markets Sovereign Debt ETF |
Deutsche Bank Securities Inc. | |
Global Short Term High Yield Bond ETF |
Deutsche Bank Securities Inc. | |
International Corporate Bond ETF |
S&P Dow Jones Indices LLC |
Each Underlying Index name trademark is owned by its respective Licensor. These trademarks have been licensed to the Adviser for use by the Funds. Each Fund is entitled to use its Underlying Index pursuant to the Trusts sub-licensing agreement with the Adviser. The Funds are not sponsored, endorsed, sold or promoted by the Licensors, and the Licensors make no representation regarding the advisability of investing in any of the Funds.
The Trust has entered into service agreements whereby The Bank of New York Mellon, a wholly-owned subsidiary of The Bank of New York Mellon Corporation, serves as the administrator, custodian, fund accountant and transfer agent for each Fund.
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NOTE 4Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 |
Prices are determined using quoted prices in an active market for identical assets. | |
Level 2 |
Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. | |
Level 3 |
Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect a Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
Except for the Funds listed below, as of April 30, 2020, all of the securities in International Corporate Bond ETF were valued based on Level 2 inputs (see the Schedules of Investments for security categories). The following is a summary of the tiered valuation input levels, as of April 30, 2020. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Emerging Markets Sovereign Debt ETF |
||||||||||||||||||||
Investments in Securities |
||||||||||||||||||||
U.S. Dollar Denominated Bonds & Notes |
$ | - | $ | 2,648,393,465 | $ | - | $ | 2,648,393,465 | ||||||||||||
Money Market Funds |
30,939,534 | - | - | 30,939,534 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Investments |
$ | 30,939,534 | $ | 2,648,393,465 | $ | - | $ | 2,679,332,999 | ||||||||||||
|
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|
|
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|
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Global Short Term High Yield Bond ETF |
||||||||||||||||||||
Investments in Securities |
||||||||||||||||||||
U.S. Dollar Denominated Bonds & Notes |
$ | - | $ | 174,687,239 | $ | 13,907 | $ | 174,701,146 | ||||||||||||
Common Stocks & Other Equity Interests |
230,444 | - | 176,976 | 407,420 | ||||||||||||||||
Money Market Funds |
4,548,814 | 1,956,881 | - | 6,505,695 | ||||||||||||||||
Investments Matured |
- | 997,475 | 777,704 | 1,775,179 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total Investments |
$ | 4,779,258 | $ | 177,641,595 | $ | 968,587 | $ | 183,389,440 | ||||||||||||
|
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|
|
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NOTE 5Tax Information
The amount and character of income and gains to be distributed are determined in accordance with federal income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under federal income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforwards are calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforwards actually available for the Funds to utilize. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Funds had capital loss carryforwards as of October 31, 2019, as follows:
No expiration | ||||||||||||
Short-Term | Long-Term | Total* | ||||||||||
Emerging Markets Sovereign Debt ETF |
$ | 39,490,544 | $ | 262,863,448 | $ | 302,353,992 | ||||||
Global Short Term High Yield Bond ETF |
1,104,862 | 3,451,280 | 4,556,142 | |||||||||
International Corporate Bond ETF |
- | - | - |
* | Capital loss carryforwards are reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
39 | ||||
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NOTE 6Investment Transactions
For the six-month period ended April 30, 2020, the cost of securities purchased and proceeds from sales of securities (other than short-term securities, U.S. Treasury obligations, money market funds and in-kind transactions, if any) were as follows:
Purchases | Sales | |||||||
Emerging Markets Sovereign Debt ETF |
$ | 649,215,997 | $ | 626,760,903 | ||||
Global Short Term High Yield Bond ETF |
58,825,669 | 56,189,489 | ||||||
International Corporate Bond ETF |
8,552,046 | 8,233,102 |
For the six-month period ended April 30, 2020, in-kind transactions associated with creations and redemptions were as follows:
Cost of Securities Received |
Value of Securities Delivered |
|||||||
Emerging Markets Sovereign Debt ETF |
$ | 307,449,824 | $ | 666,875,376 | ||||
Global Short Term High Yield Bond ETF |
7,495,459 | 23,486,443 | ||||||
International Corporate Bond ETF |
5,276,494 | 1,332,466 |
Gains (losses) on in-kind transactions are generally not considered taxable gains (losses) for federal income tax purposes.
As of April 30, 2020, the aggregate cost of investments, including any derivatives, on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end:
Gross |
Gross Unrealized (Depreciation) |
Net Unrealized Appreciation (Depreciation) |
Cost | ||||||||||||||
Emerging Markets Sovereign Debt ETF |
$67,089,201 | $ | (300,712,589 | ) | $ | (233,623,388 | ) | $ | 2,912,956,387 | ||||||||
Global Short Term High Yield Bond ETF |
545,333 | (28,381,951 | ) | (27,836,618 | ) | 211,226,058 | |||||||||||
International Corporate Bond ETF |
2,445,798 | (3,559,557 | ) | (1,113,759 | ) | 111,581,435 |
NOTE 7Trustees and Officers Fees
Trustees and Officers Fees include amounts accrued by the Funds to pay remuneration to the Independent Trustees and an Officer of the Trust. The Adviser, as a result of each Funds unitary management fee, pays for such compensation for the Funds. The Trustee who is an interested person of the Trust does not receive any Trustees fees.
The Trust has adopted a deferred compensation plan (the Plan). Under the Plan, each Independent Trustee who has executed a Deferred Fee Agreement (a Participating Trustee) may defer receipt of all or a portion of their compensation (Deferral Fees). Such Deferral Fees are deemed to be invested in select Invesco ETFs. The Deferral Fees payable to a Participating Trustee are valued as of the date such Deferral Fees would have been paid to a Participating Trustee. The value increases with contributions or with increases in the value of the Shares selected, and the value decreases with distributions or with declines in the value of the Shares selected. Obligations under the Plan represent unsecured claims against the general assets of the Funds.
NOTE 8Capital
Shares are issued and redeemed by each Fund only in Creation Units of 50,000 Shares (100,000 Shares for Emerging Markets Sovereign Debt ETF). Only Authorized Participants are permitted to purchase or redeem Creation Units from the Funds. Such transactions are principally permitted in exchange for Deposit Securities, with a balancing cash component to equate the transaction to the NAV per Share of a Fund of the Trust on the transaction date. However, for such Funds, cash in an amount equivalent to the value of certain securities may be substituted, generally when the securities are not available in sufficient quantity for delivery, not eligible for trading by the Authorized Participant or as a result of other market circumstances.
To the extent that the Funds permit transactions in exchange for Deposit Securities, each Fund may issue Shares in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit with the Trust cash at least equal to 105% of the market value of the missing Deposit Securities. In accordance with the Trusts Participant Agreement, Creation Units will be issued to an Authorized Participant, notwithstanding the fact that the corresponding Deposit Securities have not been received in part or in whole, in reliance on the undertaking of the Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking shall be secured by the Authorized Participants delivery and maintenance of collateral consisting of cash in the form of U.S. dollars in immediately available funds having a value (marked-to-market daily) at least equal to 105%, which the Adviser may change from time to time, of the value of the missing Deposit Securities.
Certain transaction fees may be charged by the Funds for creations and redemptions, which are treated as increases in capital.
Transactions in each Funds Shares are disclosed in detail in the Statements of Changes in Net Assets.
40 | ||||
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NOTE 9Coronavirus (COVID-19) Pandemic
During the first quarter of 2020, the World Health Organization declared COVID-19 to be a public health emergency. COVID-19 has led to increased short-term market volatility and may have adverse long-term effects on U.S. and world economies and markets in general. COVID-19 may adversely impact the value of the Funds investments. Because of the uncertainties on valuation, the global economy and business operations, values reflected in these financial statements may materially differ from the value received upon actual sales of those investments.
The extent of the impact on the performance of the Funds and their investments will depend on future developments, including the duration and spread of the COVID-19 outbreak, related restrictions and advisories, and the effects on the financial markets and economy overall, all of which are highly uncertain and cannot be predicted.
41 | ||||
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Calculating your ongoing Fund expenses
Example
As a shareholder of a Fund of the Invesco Exchange-Traded Fund Trust II, you incur a unitary management fee. In addition to the unitary management fee, a shareholder may pay distribution fees, if any, brokerage expenses, taxes, interest, litigation expenses, acquired fund fees and expenses, if any, and other extraordinary expenses. The expense examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2019 through April 30, 2020.
Actual Expenses
The first line in the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading Expenses Paid During the Six-Month Period to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line in the following table provides information about hypothetical account values and hypothetical expenses based on each Funds actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Funds actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as sales charges and brokerage commissions. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, expenses shown in the table do not include the expenses of the underlying funds, which are borne indirectly by a Fund. If transaction costs and indirect expenses were included, your costs would have been higher.
Annualized | ||||||||||||||||
Beginning | Ending | Expense Ratio | Expenses Paid | |||||||||||||
Account Value | Account Value | Based on the | During the | |||||||||||||
November 1, 2019 | April 30, 2020 | Six-Month Period | Six-Month Period(1) | |||||||||||||
Invesco Emerging Markets Sovereign Debt ETF (PCY) |
||||||||||||||||
Actual |
$ | 1,000.00 | $ | 870.00 | 0.50 | % | $ | 2.32 | ||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.38 | 0.50 | 2.51 | ||||||||||||
Invesco Global Short Term High Yield Bond ETF (PGHY) |
||||||||||||||||
Actual |
1,000.00 | 927.60 | 0.35 | 1.68 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,023.12 | 0.35 | 1.76 | ||||||||||||
Invesco International Corporate Bond ETF (PICB) |
||||||||||||||||
Actual |
1,000.00 | 971.50 | 0.50 | 2.45 | ||||||||||||
Hypothetical (5% return before expenses) |
1,000.00 | 1,022.38 | 0.50 | 2.51 |
(1) | Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six-month period ended April 30, 2020. Expenses are calculated by multiplying the Funds annualized expense ratio by the average account value for the period, then multiplying the result by 182/366. |
42 | ||||
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Approval of Investment Advisory and Sub-Advisory Contracts
At a meeting held on April 14, 2020, the Board of Trustees of the Invesco Exchange-Traded Fund Trust II (the Trust), including the Independent Trustees, approved the continuation of the Investment Advisory Agreement between Invesco Capital Management LLC (the Adviser) and the Trust for the following 71 series (each, a Fund and collectively, the Funds):
Invesco 1-30 Laddered Treasury ETF |
Invesco S&P 500® Enhanced Value ETF | |
Invesco California AMT-Free Municipal Bond ETF |
Invesco S&P 500® ex-Rate Sensitive Low Volatility ETF | |
Invesco CEF Income Composite ETF |
Invesco S&P 500® High Beta ETF | |
Invesco China Technology ETF |
Invesco S&P 500® High Dividend Low Volatility ETF | |
Invesco DWA Developed Markets Momentum ETF |
Invesco S&P 500® Low Volatility ETF | |
Invesco DWA Emerging Markets Momentum ETF |
Invesco S&P 500 Minimum Variance ETF | |
Invesco DWA SmallCap Momentum ETF |
Invesco S&P 500® Momentum ETF | |
Invesco Emerging Markets Sovereign Debt ETF |
Invesco S&P 500 Revenue ETF | |
Invesco FTSE International Low Beta Equal Weight ETF |
Invesco S&P Emerging Markets Low Volatility ETF | |
Invesco FTSE RAFI Developed Markets ex-U.S. ETF |
Invesco S&P Emerging Markets Momentum ETF | |
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF Invesco FTSE RAFI Emerging Markets ETF |
Invesco S&P International Developed High Dividend Low Volatility ETF | |
Invesco Fundamental High Yield® Corporate Bond ETF |
Invesco S&P International Developed Low Volatility ETF | |
Invesco Fundamental Investment Grade Corporate Bond ETF |
Invesco S&P International Developed Momentum ETF | |
Invesco Global Clean Energy ETF |
Invesco S&P International Developed Quality ETF | |
Invesco Global Short Term High Yield Bond ETF |
Invesco S&P MidCap 400 Revenue ETF | |
Invesco Global Water ETF |
Invesco S&P MidCap Low Volatility ETF | |
Invesco International BuyBack AchieversTM ETF |
Invesco S&P SmallCap 600 Revenue ETF | |
Invesco International Corporate Bond ETF |
Invesco S&P SmallCap Consumer Discretionary ETF | |
Invesco KBW Bank ETF |
Invesco S&P SmallCap Consumer Staples ETF | |
Invesco KBW High Dividend Yield Financial ETF |
Invesco S&P SmallCap Energy ETF | |
Invesco KBW Premium Yield Equity REIT ETF |
Invesco S&P SmallCap Financials ETF | |
Invesco KBW Property & Casualty Insurance ETF |
Invesco S&P SmallCap Health Care ETF | |
Invesco KBW Regional Banking ETF |
Invesco S&P SmallCap High Dividend Low Volatility ETF | |
Invesco National AMT-Free Municipal Bond ETF |
Invesco S&P SmallCap Industrials ETF | |
Invesco New York AMT-Free Municipal Bond ETF |
Invesco S&P SmallCap Information Technology ETF | |
Invesco Preferred ETF |
Invesco S&P SmallCap Low Volatility ETF | |
Invesco PureBetaSM 0-5YrUSTIPSETF |
Invesco S&P SmallCap Materials ETF | |
Invesco PureBetaSM FTSE Developed ex-North America ETF |
Invesco S&P SmallCap Quality ETF | |
Invesco PureBetaSM FTSE Emerging Markets ETF |
Invesco S&P SmallCap Utilities & Communication Services ETF | |
Invesco PureBetaSM MSCI USA ETF |
Invesco S&P Ultra Dividend Revenue ETF | |
Invesco PureBetaSM MSCI USA Small Cap ETF |
Invesco Senior Loan ETF | |
Invesco PureBetaSM US Aggregate Bond ETF |
Invesco Taxable Municipal Bond ETF | |
Invesco Russell 1000 Enhanced Equal Weight ETF |
Invesco Treasury Collateral ETF | |
Invesco Russell 1000 Equal Weight ETF |
Invesco Variable Rate Preferred ETF | |
Invesco Russell 1000 Low Beta Equal Weight ETF |
Invesco VRDO Tax-Free Weekly ETF |
Also at the April 14, 2020 meeting, the Board of Trustees of the Trust, including the Independent Trustees, approved the continuation of the Investment Sub-Advisory Agreement between the Adviser and the following seven affiliated sub-advisers for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF (the Sub-Advisory Agreement): Invesco Advisers, Inc.; Invesco Asset Management Deutschland, GmbH; Invesco Asset Management Limited; Invesco Asset Management (Japan) Limited; Invesco Hong Kong Limited; Invesco Senior Secured Management, Inc.; and Invesco Canada Ltd. (each, a Sub-Adviser and collectively, the Sub-Advisers).
43 | ||||
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
Investment Advisory Agreement
The Trustees reviewed information from the Adviser describing: (i) the nature, extent and quality of services provided, (ii) the investment performance of each Fund and the Adviser, (iii) the fees paid by the Funds and comparisons to amounts paid by other comparable registered investment companies, (iv) the costs of services provided and estimated profits realized by the Adviser, (v) the extent to which economies of scale may be realized as a Fund grows and whether fee levels reflect any possible economies of scale for the benefit of Fund shareholders, and (vi) any further benefits realized by the Adviser or its affiliates from the Advisers relationship with the Funds.
Nature, Extent and Quality of Services. In evaluating the nature, extent and quality of the Advisers services, the Trustees reviewed information concerning the functions performed by the Adviser for the Funds, information describing the Advisers current organization and staffing, including operational support provided by the Advisers parent organization, Invesco Ltd. (Invesco), and the background and experience of the persons responsible for the day-to-day management of the Funds. The Trustees reviewed matters related to the Advisers execution and/or oversight of execution of portfolio transactions on behalf of the Funds. The Trustees also reviewed information on the performance of the Funds and their underlying indexes for the one-year, three-year, five-year, ten-year and since-inception periods ended December 31, 2019, as applicable, including reports for each of those periods on the correlation and tracking error between each Funds performance and the performance of its underlying index, as well as the Advisers analysis of the tracking error and correlation between certain Funds and their underlying indexes. In reviewing the tracking error reports, the Trustees considered information provided by Invescos independent performance and risk management group with respect to general expected tracking error ranges. The Trustees also considered that certain Funds were created in connection with the purchases by Invesco of the exchange-traded funds businesses of Guggenheim Capital LLC on April 6, 2018 and Massachusetts Mutual Life Insurance Company (Oppenheimer) on May 24, 2019 (each, a Transaction), and that each such Funds performance prior to the closing of the applicable Transaction is that of its predecessor Guggenheim ETF or Oppenheimer ETF. The Trustees noted that, for each applicable period, the correlation for each Fund, other than the five-year and since-inception periods for Invesco Global Short Term High Yield Bond ETF and the one-year and ten-year periods for Invesco VRDO Tax-Free Weekly ETF, was within the targeted range set forth in the Trusts registration statement. The Trustees reviewed the reasons provided by the Adviser for Invesco Global Short Term High Yield Bond ETFs and Invesco VRDO Tax-Free Weekly ETFs level of correlation to its underlying index, as well as the Advisers expectations for each Funds correlation going forward. The Trustees noted that, for each applicable period, the tracking error for all Funds was within the targeted range set forth in the Trusts registration statement and concluded that each Funds correlation to its underlying index and the tracking error for each Fund were within an acceptable range given that Funds particular circumstances.
The Trustees considered the services provided by the Adviser in its oversight of the Funds administrator, custodian and transfer agent. They noted the significant amount of time, effort and resources that had been devoted to this oversight function.
Based on their review, the Trustees concluded that the nature, extent and quality of services provided by the Adviser to the Funds under the Investment Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser on each Funds net expense ratio and unitary advisory fee. The Trustees noted that the annual advisory fee charged to each Fund, as set forth below, is a unitary advisory fee and that the Adviser pays all other operating expenses of each Fund, including the fees payable to the Sub-Advisers for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF, except that each Fund pays its brokerage expenses, taxes, interest (including, for Invesco Senior Loan ETF, interest expenses associated with its line of credit), litigation expenses and other extraordinary expenses (including acquired fund fees and expenses, if any).
0.04%: |
Invesco PureBetaTM MSCI USA ETF | |
0.05%: |
Invesco PureBetaTM US Aggregate Bond ETF | |
0.06%: |
Invesco PureBetaTM MSCI USA Small Cap ETF | |
0.07%: |
Invesco PureBetaTM 0-5 Yr US TIPS ETF, Invesco PureBetaTM FTSE Developed ex-North America ETF | |
0.08%: |
Invesco Treasury Collateral ETF | |
0.10%: |
Invesco S&P 500 Minimum Variance ETF | |
0.13%: |
Invesco S&P 500 Enhanced Value ETF, Invesco S&P 500 Momentum ETF | |
0.14%: |
Invesco PureBetaTM FTSE Emerging Markets ETF |
44 | ||||
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Approval of Investment Advisory and Sub-Advisory Contracts (continued)
0.20%: |
Invesco Russell 1000 Equal Weight ETF | |
0.22%: |
Invesco Fundamental Investment Grade Corporate Bond ETF | |
0.25%: |
Invesco 1-30 Laddered Treasury ETF, Invesco S&P 500® ex-Rate Sensitive Low Volatility ETF, Invesco S&P 500® High Beta ETF, Invesco S&P 500® Low Volatility ETF, Invesco S&P MidCap Low Volatility ETF, Invesco S&P SmallCap Low Volatility ETF, Invesco VRDO Tax-Free Weekly ETF | |
0.28%: |
Invesco California AMT-Free Municipal Bond ETF, Invesco National AMT-Free Municipal Bond ETF, Invesco New York AMT-Free Municipal Bond ETF, Invesco Taxable Municipal Bond ETF | |
0.29%: |
Invesco Russell 1000 Enhanced Equal Weight ETF, Invesco S&P International Developed Quality ETF, Invesco S&P SmallCap Consumer Discretionary ETF, Invesco S&P SmallCap Consumer Staples ETF, Invesco S&P SmallCap Energy ETF, Invesco S&P SmallCap Financials ETF, Invesco S&P SmallCap Health Care ETF, Invesco S&P SmallCap Industrials ETF, Invesco S&P SmallCap Information Technology ETF, Invesco S&P SmallCap Materials ETF, Invesco S&P SmallCap Quality ETF, Invesco S&P SmallCap Utilities & Communication Services ETF | |
0.30%: |
Invesco S&P 500® High Dividend Low Volatility ETF, Invesco S&P International Developed High Dividend Low Volatility ETF, Invesco S&P SmallCap High Dividend Low Volatility ETF | |
0.35%: |
Invesco Global Short Term High Yield Bond ETF, Invesco KBW Bank ETF, Invesco KBW High Dividend Yield Financial ETF, Invesco KBW Premium Yield Equity REIT ETF, Invesco KBW Property & Casualty Insurance ETF, Invesco KBW Regional Banking ETF, Invesco Russell 1000 Low Beta Equal Weight ETF, Invesco S&P International Developed Low Volatility ETF, Invesco S&P International Developed Momentum ETF | |
0.39%: |
Invesco S&P 500 Revenue ETF, Invesco S&P MidCap 400 Revenue ETF, Invesco S&P SmallCap 600 Revenue ETF, Invesco S&P Ultra Dividend Revenue ETF | |
0.45%: |
Invesco FTSE International Low Beta Equal Weight ETF, Invesco FTSE RAFI Developed Markets ex-U.S. ETF, Invesco S&P Emerging Markets Low Volatility ETF, Invesco S&P Emerging Markets Momentum ETF | |
0.49%: |
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF, Invesco FTSE RAFI Emerging Markets ETF | |
0.50%: |
Invesco CEF Income Composite ETF, Invesco Emerging Markets Sovereign Debt ETF, Invesco Fundamental High Yield® Corporate Bond ETF, Invesco International Corporate Bond ETF, Invesco Preferred ETF, Invesco Variable Rate Preferred ETF | |
0.55%: |
Invesco International BuyBack AchieversTM ETF | |
0.60%: |
Invesco DWA SmallCap Momentum ETF | |
0.65%: |
Invesco Senior Loan ETF | |
0.70%: |
Invesco China Technology ETF | |
0.75%: |
Invesco Global Clean Energy ETF, Invesco Global Water ETF | |
0.80%: |
Invesco DWA Developed Markets Momentum ETF | |
0.90%: |
Invesco DWA Emerging Markets Momentum ETF |
The Trustees considered that, effective May 1, 2020, the Adviser had agreed to reduce the unitary advisory fee for Invesco S&P Emerging Markets Low Volatility ETF and Invesco S&P Emerging Markets Momentum ETF from 0.45% to 0.29% of average daily net assets, and to reduce the unitary advisory fee for Invesco S&P International Developed Low Volatility ETF and Invesco S&P International Developed Momentum ETF from 0.35% to 0.25% of average daily net assets.
The Trustees compared each Funds net expense ratio to information compiled by the Adviser from Lipper Inc. databases on the net expense ratios of comparable exchange-traded funds (ETFs), open-end (non-ETF) index funds and open-end (non-ETF) actively-managed funds, as applicable. The Trustees noted that the net expense ratios for certain Funds were equal to or lower than the median net expense ratios of their ETF and open-end index peer funds as illustrated in the table below. The Trustees also noted that the net expense ratios for all of the Funds were lower than the median net expense ratios of their open-end actively-managed peer funds. The
.
45 | ||||
|
| |||
Approval of Investment Advisory and Sub-Advisory Contracts (continued)
Trustees noted that a portion of each Funds operating expenses was attributable to a sub-license fee payable out of the unitary advisory fee charged to that Fund.
Equal to/Lower | Lower than | |||||
Equal to/Lower | than Open-End | Open-End | ||||
than ETF | Index Fund | Active Fund | ||||
Invesco Fund | Peer Median |
Peer Median* |
Peer Median | |||
Invesco 1-30 Laddered Treasury ETF |
X | |||||
Invesco California AMT-Free Municipal Bond ETF |
N/A | X | ||||
Invesco CEF Income Composite ETF |
X | N/A | X | |||
Invesco China Technology ETF |
N/A | X | ||||
Invesco DWA Developed Markets Momentum ETF |
X | |||||
Invesco DWA Emerging Markets Momentum ETF |
X | |||||
Invesco DWA SmallCap Momentum ETF |
X | |||||
Invesco Emerging Markets Sovereign Debt ETF |
X | |||||
Invesco FTSE International Low Beta Equal Weight ETF |
X | X | X | |||
Invesco FTSE RAFI Developed Markets ex-U.S. ETF |
X | X | ||||
Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF |
X | X | X | |||
Invesco FTSE RAFI Emerging Markets ETF |
X | X | ||||
Invesco Fundamental High Yield® Corporate Bond ETF |
X | X | ||||
Invesco Fundamental Investment Grade Corporate Bond ETF |
X | |||||
Invesco Global Clean Energy ETF |
N/A | X | ||||
Invesco Global Short Term High Yield Bond ETF |
X | N/A | X | |||
Invesco Global Water ETF |
N/A | X | ||||
Invesco International BuyBack AchieversTM ETF |
X | X | X | |||
Invesco International Corporate Bond ETF |
X | |||||
Invesco KBW Bank ETF |
X | X | ||||
Invesco KBW High Dividend Yield Financial ETF |
X | X | ||||
Invesco KBW Premium Yield Equity REIT ETF |
X | X | ||||
Invesco KBW Property & Casualty Insurance ETF |
X | X | ||||
Invesco KBW Regional Banking ETF |
X | X | ||||
Invesco National AMT-Free Municipal Bond ETF |
X | |||||
Invesco New York AMT-Free Municipal Bond ETF |
N/A | X | ||||
Invesco Preferred ETF |
N/A | X | ||||
Invesco PureBetaTM 0-5 Yr US TIPS ETF |
X | |||||
Invesco PureBetaTM FTSE Developed ex-North America ETF |
X | |||||
Invesco PureBetaTM FTSE Emerging Markets ETF |
X | X | ||||
Invesco PureBetaTM MSCI USA ETF |
X | X | X | |||
Invesco PureBetaTM MSCI USA Small Cap ETF |
X | X | X | |||
Invesco PureBetaTM US Aggregate Bond ETF |
X | X | X | |||
Invesco Russell 1000 Enhanced Equal Weight ETF |
X | X | X | |||
Invesco Russell 1000 Equal Weight ETF |
X | X | X | |||
Invesco Russell 1000 Low Beta Equal Weight ETF |
X | X | ||||
Invesco S&P 500 Enhanced Value ETF |
X | X | X | |||
Invesco S&P 500® ex-Rate Sensitive Low Volatility ETF |
X | X | X | |||
Invesco S&P 500 High Beta ETF |
X | X | X | |||
Invesco S&P 500® High Dividend Low Volatility ETF |
X | X | X |
46 | ||||
|
| |||
Approval of Investment Advisory and Sub-Advisory Contracts (continued)
Equal to/Lower | Lower than | |||||
Equal to/Lower | than Open-End | Open-End | ||||
than ETF | Index Fund | Active Fund | ||||
Invesco Fund | Peer Median |
Peer Median* |
Peer Median | |||
Invesco S&P 500® Low Volatility ETF |
X | X | ||||
Invesco S&P 500 Minimum Variance ETF |
X | X | X | |||
Invesco S&P 500 Momentum ETF |
X | X | ||||
Invesco S&P 500 Revenue ETF |
X | X | ||||
Invesco S&P Emerging Markets Low Volatility ETF |
X | X | X | |||
Invesco S&P Emerging Markets Momentum ETF |
X | X | ||||
Invesco S&P International Developed High Dividend Low Volatility ETF |
X | X | ||||
Invesco S&P International Developed Low Volatility ETF |
X | X | ||||
Invesco S&P International Developed Momentum ETF |
X | |||||
Invesco S&P International Developed Quality ETF |
X | X | ||||
Invesco S&P MidCap 400 Revenue ETF |
X | |||||
Invesco S&P MidCap Low Volatility ETF |
X | |||||
Invesco S&P SmallCap 600 Revenue ETF |
X | X | ||||
Invesco S&P SmallCap Consumer Discretionary ETF |
X | X | ||||
Invesco S&P SmallCap Consumer Staples ETF |
X | X | ||||
Invesco S&P SmallCap Energy ETF |
X | X | ||||
Invesco S&P SmallCap Financials ETF |
X | X | ||||
Invesco S&P SmallCap Health Care ETF |
X | X | ||||
Invesco S&P SmallCap High Dividend Low Volatility ETF |
X | X | X | |||
Invesco S&P SmallCap Industrials ETF |
X | X | ||||
Invesco S&P SmallCap Information Technology ETF |
X | X | X | |||
Invesco S&P SmallCap Low Volatility ETF |
X | X | X | |||
Invesco S&P SmallCap Materials ETF |
X | X | ||||
Invesco S&P SmallCap Quality ETF |
X | X | ||||
Invesco S&P SmallCap Utilities & Communication Services ETF |
X | X | X | |||
Invesco S&P Ultra Dividend Revenue ETF |
X | X | ||||
Invesco Senior Loan ETF |
X | X | ||||
Invesco Taxable Municipal Bond ETF |
N/A | X | ||||
Invesco Treasury Collateral ETF |
X | X | ||||
Invesco Variable Rate Preferred ETF |
X | X | ||||
Invesco VRDO Tax-Free Weekly ETF |
N/A | X |
* | The information provided by the Adviser indicated that certain Funds did not have any comparable open-end index fund peers. Those Funds have been designated in this column with an N/A for not available. |
In response to questions from the Independent Trustees, the Adviser provided supplemental information regarding each of Invesco 1-30 Laddered Treasury ETF, Invesco California AMT-Free Municipal Bond ETF, Invesco DWA Developed Markets Momentum ETF, Invesco Emerging Markets Sovereign Debt ETF, Invesco Global Clean Energy ETF, Invesco Global Water ETF, Invesco International Corporate Bond ETF, Invesco National AMT-Free Municipal Bond ETF, Invesco New York AMT-Free Municipal Bond ETF, Invesco Senior Loan ETF and Invesco VRDO Tax-Free Weekly ETFs advisory fees and total expenses and the Lipper peer data. The Adviser explained its view that the advisory fees and total expenses for these Funds are competitive and generally in line with other comparable funds in the marketplace, particularly in light of the level and nature of services provided and the investment management style of the Adviser. The Trustees also considered the Advisers statements regarding its pricing philosophy and the differing pricing philosophy of certain of the peers.
47 | ||||
|
| |||
Approval of Investment Advisory and Sub-Advisory Contracts (continued)
The Trustees noted information, including fee information, provided by the Adviser regarding other investment products to which it provides investment advisory services, including products that have investment strategies comparable to certain of the Funds. The Trustees considered the Advisers explanation of the differences between the services provided to the Funds and to the other investment products it advises, noting the Advisers statement that the management and oversight of the Funds requires substantially more labor and expense.
Based on all the information provided, the Board concluded that each Funds unitary advisory fee was reasonable and appropriate in light of the services provided, the nature of the indexes, the distinguishing factors of the Funds, and the administrative, operational and management oversight costs for the Adviser.
In conjunction with their review of the unitary advisory fees, the Trustees considered information provided by the Adviser on the revenues received by the Adviser under the Investment Advisory Agreement for the Funds. The Trustees reviewed information provided by the Adviser on its overall profitability, as well as the estimated profitability to the Adviser from its relationship to each Fund. The Trustees concluded that the overall and estimated profitability to the Adviser was not unreasonable.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. The Trustees reviewed the information provided by the Adviser as to the extent to which economies of scale may be realized as each Fund grows and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees reviewed each Funds asset size and unitary advisory fee. The Trustees noted that any reduction in fixed costs associated with the management of the Funds would be enjoyed by the Adviser, but a unitary advisory fee provides a level of certainty in expenses for the Funds. The Trustees considered whether the unitary advisory fee rate for each Fund was reasonable in relation to the asset size of that Fund, and concluded that the unitary advisory fee was reasonable and appropriate.
Fall-out Benefits. The Trustees considered that the Adviser identified no additional benefits it receives from its relationship with the Funds, and noted that the Adviser does not have any soft-dollar arrangements. The Trustees also considered benefits received by affiliates of the Adviser that may be directly or indirectly attributed to the Advisers relationship with the Funds, including brokerage fees and advisory fees for money market cash management vehicles. The Board concluded that the advisory fee was reasonable, taking into account any ancillary benefits received by affiliates of the Adviser.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Investment Advisory Agreement for each Fund. No single factor was determinative in the Boards analysis.
Investment Sub-Advisory Agreement
As noted above, the Board of Trustees of the Trust, including the Independent Trustees, approved the continuation of the Sub-Advisory Agreement for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF at a meeting held on April 14, 2020. The review process followed by the Board is described in detail above. In connection with the review of the Sub-Advisory Agreement, the Board considered the factors described below, among others.
Nature, Extent and Quality of Services. The Trustees considered the nature, extent and quality of services provided under the Sub-Advisory Agreement. The Board reviewed the qualifications and background of each Sub-Adviser, the services provided or to be provided by each Sub-Adviser, the investment approach of the Sub-Adviser whose investment personnel manage Invesco Senior Loan ETFs and Invesco Treasury Collateral ETFs assets, the experience and skills of the investment personnel responsible for the day-to-day management of the Funds, and the resources made available to such personnel.
Based on their review, the Trustees concluded that the nature, extent and quality of services provided by the Sub-Advisers to Invesco Senior Loan ETF and Invesco Treasury Collateral ETF under the Sub-Advisory Agreement were appropriate and reasonable.
Fees, Expenses and Profitability. The Trustees reviewed and discussed the information provided by the Adviser and the Sub-Advisers on the sub-advisory fee rates under the Sub-Advisory Agreement. The Trustees noted that the sub-advisory fees charged by the Sub-Advisers under the Sub-Advisory Agreement are consistent with the compensation structure used throughout Invesco when Invescos affiliates provide sub-advisory services for funds managed by other Invesco affiliates. The Board considered how the sub-advisory fees relate to the overall advisory fee for each of Invesco Senior Loan ETF and Invesco Treasury Collateral ETF and noted that the Adviser compensates the Sub-Advisers from its fee.
48 | ||||
|
| |||
Approval of Investment Advisory and Sub-Advisory Contracts (continued)
The Trustees also reviewed the financial statements provided by Invesco Senior Secured Management, Inc., in connection with the March 12, 2020 Board meeting, and Invesco Advisers, Inc., in connection with the April 14, 2020 meeting, and noted the net income generated by each firm. The Trustees noted that the Adviser compensates the Sub-Advisers from its fee and that the Adviser provided profitability information with respect to Invesco Senior Loan ETF and Invesco Treasury Collateral ETF.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. As part of their review of the Investment Advisory Agreement for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF, the Trustees considered the extent to which economies of scale may be realized as the Funds grow and whether fee levels reflect economies of scale for the benefit of shareholders. The Trustees considered whether the sub-advisory fee rates for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF were reasonable in relation to the asset size of the Funds, and concluded that the flat sub-advisory fee rates were reasonable and appropriate.
Fall-out Benefits. The Trustees noted that Invesco Advisers, Inc. receives management fees from money market funds into which the Funds and other Invesco ETFs excess cash and securities lending collateral may be invested, and that the Adviser waives its fees on the excess cash invested under such arrangement in amounts equal to fees received by Invesco Advisers, Inc. on the Funds and other Invesco ETFs excess cash invested in the money market funds. The Trustees noted that the Sub-Advisers had not identified any further benefits that they derived from their relationships with Invesco Senior Loan ETF and Invesco Treasury Collateral ETF and that the Sub-Advisers do not have any soft-dollar arrangements with respect to the Funds. The Board concluded that the sub-advisory fee with respect to each Fund was reasonable, taking into account any ancillary benefits received by the Sub-Advisers.
Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, determined to approve the continuation of the Sub-Advisory Agreement for Invesco Senior Loan ETF and Invesco Treasury Collateral ETF. No single factor was determinative in the Boards analysis.
49 | ||||
|
| |||
(This Page Intentionally Left Blank)
Proxy Voting Policies and Procedures
A description of the Trusts proxy voting policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available, without charge and upon request, by calling (800) 983-0903. This information is also available on the Securities and Exchange Commissions (the Commission) website at www.sec.gov.
Information regarding how each Fund voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, is available, without charge and upon request, by (i) calling (800) 983-0903; or (ii) accessing the Trusts Form N-PX on the Commissions website at www.sec.gov.
Quarterly Portfolios
The Trust files its complete schedule of portfolio holdings for the Funds with the Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Forms N-PORT are available on the Commissions website at www.sec.gov.
Frequency Distribution of Discounts and Premiums
A table showing the number of days the market price of each Funds shares was greater than the Funds net asset value, and the number of days it was less than the Funds net asset value (i.e., premium or discount) for the most recently completed calendar year, and the calendar quarters since that year end (or the life of the Fund, if shorter) may be found at the Funds website at www.invesco.com/ETFs.
©2020 Invesco Capital Management LLC 3500 Lacey Road, Suite 700 Downers Grove, IL 60515 |
P-PS-SAR-9 | invesco.com/ETFs |
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
(a) | The Schedules of Investments are included as a part of the report to shareholders filed under Item 1 of this Form N-CSR. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the Board that would require disclosure herein.
Item 11. Controls and Procedures.
(a) | Based on their evaluation of the Registrants disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report, the Registrants President (principal executive officer) and Treasurer (principal financial officer) have concluded that such disclosure controls and procedures are effective. |
(b) | There were no changes in the registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable.
Item 13. Exhibits.
(a)(1) | Not applicable. |
(a)(2) |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Invesco Exchange-Traded Fund Trust II
By: /s/ Anna Paglia
Name: Anna Paglia
Title: President
Date: July 6, 2020
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: /s/ Anna Paglia
Name: Anna Paglia
Title: President
Date: July 6, 2020
By: /s/ Kelli Gallegos
Name: Kelli Gallegos
Title: Treasurer
Date: July 6, 2020
Exhibit 99.CERT
EXHIBIT (a)(2)
CERTIFICATIONS PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Anna Paglia, certify that:
1. | I have reviewed this report on Form N-CSR of Invesco Exchange-Traded Fund Trust II; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The Registrants other certifying officer and I have disclosed to the Registrants auditors and the audit committee of the Registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrants ability to record, process, summarize, and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal control over financial reporting |
Date: July 6, 2020 | /s/ Anna Paglia | |||||
Anna Paglia | ||||||
President |
Exhibit 99.CERT
EXHIBIT (a)(2)
CERTIFICATIONS PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Kelli Gallegos, certify that:
1. | I have reviewed this report on Form N-CSR of Invesco Exchange-Traded Fund Trust II; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The Registrants other certifying officer and I have disclosed to the Registrants auditors and the audit committee of the Registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrants ability to record, process, summarize, and report financial information; and |
(a) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal control over financial reporting. |
Date: July 6, 2020 | /s/ Kelli Gallegos | |||||
Kelli Gallegos | ||||||
Treasurer |
Exhibit 99.906CERT
EXHIBIT (b)
CERTIFICATIONS PURSUANT TO RULE 30A-2(B) UNDER THE 1940 ACT AND
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the report of Invesco Exchange-Traded Fund Trust II (the Registrant) on Form N-CSR for the period ended April 30, 2020 (the Report), each of the undersigned officers of the Registrant hereby certifies, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to SS. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Dated: July 6, 2020 |
/s/ Anna Paglia |
Name:Anna Paglia |
Title: President |
Dated: July 6, 2020 |
/s/ Kelli Gallegos |
Name: Kelli Gallegos |
Title: Treasurer |
This certification is being furnished solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Report or as a separate disclosure document.
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