UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORMN-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21265
Invesco Exchange-Traded Fund Trust
(Exact name of registrant as specified in charter)
3500 Lacey Road
Downers Grove, IL 60515
(Address of principal executive offices) (Zip code)
Daniel E. Draper
President
3500 Lacey Road
Downers Grove, IL 60515
(Name and address of agent for service)
Registrant’s telephone number, including area code:800-983-0903
Date of fiscal year end: August 31
Date of reporting period: February 28, 2019
FormN-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 Rule30e-1 under the Investment Company Act of 1940 (17 CFR270.30e-1). The Commission may use the information provided on FormN-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by FormN-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in FormN-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, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
The Registrant’s semi- annual report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940 is as follows:
[NOTE TO FINANCIAL PRINTER:Insert a copy of the report transmitted to stockholders pursuant to Rule30e-1 under the Act (17 CFR270.30e-1)HERE.]
Invesco Semi-Annual Report to Shareholders
February 28, 2019
EEB | Invesco BRIC ETF | |
RYJ | Invesco Raymond James SB-1 Equity ETF |
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s 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.
Trust I August Portfolios | ||||
Schedules of Investments | ||||
3 | ||||
6 | ||||
Statements of Assets and Liabilities | 9 | |||
Statements of Operations | 10 | |||
Statements of Changes in Net Assets | 11 | |||
Financial Highlights | 12 | |||
Notes to Financial Statements | 13 | |||
Fees and Expenses | 23 |
| 2 |
|
February 28, 2019
(Unaudited)
Portfolio Composition | ||||
Sector Breakdown (% of the Fund’s Net Assets) | ||||
Financials | 20.5 | |||
Energy | 20.1 | |||
Consumer Discretionary | 17.4 | |||
Communication Services | 15.9 | |||
Materials | 8.7 | |||
Information Technology | 5.4 | |||
Industrials | 4.3 | |||
Consumer Staples | 3.7 | |||
Utilities | 2.1 | |||
Health Care | 1.2 | |||
Telecommunication Services | 0.6 | |||
Money Market Funds Plus Other Assets Less Liabilities | 0.1 |
Schedule of Investments(a)
Number of Shares | Value | |||||||
Common Stocks & Other Equity Interests—99.9% | ||||||||
Communication Services—15.9% | ||||||||
6,168 | 58.com, Inc. ADR (China)(b) | $ | 449,709 | |||||
3,866 | Autohome, Inc. ADR (China)(b) | 363,597 | ||||||
12,064 | Baidu, Inc. ADR (China)(b) | 1,960,883 | ||||||
9,615 | Bilibili, Inc. ADR (China)(b)(c) | 182,493 | ||||||
7,207 | Bitauto Holdings Ltd. ADR (China)(b) | 140,969 | ||||||
235,667 | China Mobile Ltd. (China) | 2,479,820 | ||||||
906,462 | China Telecom Corp. Ltd., H-Shares (China) | 490,772 | ||||||
386,229 | China Unicom Hong Kong Ltd. (China) | 458,074 | ||||||
295,575 | Dish TV India Ltd. GDR (India)(d) | 155,177 | ||||||
91,316 | Fang Holdings Ltd. ADR (China)(b) | 142,453 | ||||||
10,199 | iQIYI, Inc. ADR (China)(b)(c) | 277,005 | ||||||
8,378 | Mail.Ru Group Ltd. GDR (Russia)(b)(d) | 199,396 | ||||||
36,373 | Mobile TeleSystems PJSC ADR (Russia) | 281,163 | ||||||
10,410 | Momo, Inc. ADR (China)(b) | 345,300 | ||||||
3,935 | NetEase, Inc. ADR (China) | 878,371 | ||||||
22,688 | Rostelecom PJSC ADR (Russia) | 148,833 | ||||||
61,258 | Sistema PJSFC GDR (Russia)(d) | 182,794 | ||||||
24,181 | Sogou, Inc. ADR (China)(b) | 150,648 | ||||||
6,403 | Sohu.com Ltd. ADR (China)(b) | 128,444 | ||||||
12,979 | TIM Participacoes SA ADR (Brazil) | 204,809 | ||||||
58,573 | VEON Ltd. ADR (Russia) | 147,018 | ||||||
4,617 | Weibo Corp. ADR (China)(b)(c) | 333,578 | ||||||
3,721 | YY, Inc. ADR (China)(b) | 262,331 | ||||||
|
| |||||||
10,363,637 | ||||||||
|
| |||||||
Consumer Discretionary—17.4% | ||||||||
38,001 | Alibaba Group Holding Ltd. ADR (China)(b) | 6,955,323 | ||||||
4,021 | Baozun, Inc. ADR (China)(b)(c) | 150,586 |
Number of Shares | Value | |||||||
Common Stocks & Other Equity Interests (continued) | ||||||||
Consumer Discretionary (continued) | ||||||||
22,660 | Ctrip.com International Ltd. ADR (China)(b) | $ | 773,386 | |||||
7,988 | Huazhu Group Ltd. ADR (China) | 280,139 | ||||||
43,930 | JD.com, Inc. ADR (China)(b) | 1,217,300 | ||||||
55,837 | Mahindra & Mahindra Ltd. GDR (India)(d) | 513,700 | ||||||
7,473 | Pinduoduo, Inc. ADR (China)(b)(c) | 223,742 | ||||||
21,571 | TAL Education Group ADR (China)(b) | 767,928 | ||||||
16,577 | Tata Motors Ltd. ADR (India)(b) | 207,213 | ||||||
34,197 | Vipshop Holdings Ltd. ADR (China)(b) | 245,534 | ||||||
|
| |||||||
11,334,851 | ||||||||
|
| |||||||
Consumer Staples—3.7% | ||||||||
235,993 | Ambev SA ADR (Brazil) | 1,069,048 | ||||||
54,643 | BRF SA ADR (Brazil)(b) | 299,444 | ||||||
11,959 | Cia Brasileira de Distribuicao ADR (Brazil) | 295,387 | ||||||
49,170 | Lenta Ltd. GDR (Russia)(b)(d) | 149,968 | ||||||
23,257 | Magnit PJSC GDR (Russia)(d) | 333,971 | ||||||
8,901 | X5 Retail Group NV GDR (Russia)(d) | 225,195 | ||||||
|
| |||||||
2,373,013 | ||||||||
|
| |||||||
Energy—20.1% | ||||||||
1,325,812 | China Petroleum & Chemical Corp., H-Shares (China) | 1,145,125 | ||||||
5,395 | Gazprom Neft PJSC ADR (Russia) | 133,526 | ||||||
294,796 | Gazprom PJSC ADR (Russia) | 1,398,512 | ||||||
18,240 | LUKOIL PJSC ADR (Russia) | 1,517,568 | ||||||
4,780 | Novatek PJSC GDR (Russia)(d) | 828,374 | ||||||
1,181,999 | PetroChina Co. Ltd., H-Shares (China) | 781,494 | ||||||
77,859 | Petroleo Brasileiro SA ADR (Brazil) | 1,223,944 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 3 |
|
Invesco BRIC ETF (EEB)(continued)
February 28, 2019
(Unaudited)
Number of Shares | Value | |||||||
Common Stocks & Other Equity Interests (continued) | ||||||||
Energy (continued) | ||||||||
108,341 | Petroleo Brasileiro SA (Preference Shares) ADR (Brazil) | $ | 1,552,527 | |||||
67,927 | Reliance Industries Ltd. GDR (India)(d) | 2,357,067 | ||||||
75,685 | Rosneft Oil Co. PJSC GDR (Russia)(d) | 453,353 | ||||||
66,528 | Surgutneftegas PJSC ADR (Russia) | 256,399 | ||||||
14,095 | Tatneft PJSC ADR (Russia) | 995,107 | ||||||
29,806 | Ultrapar Participacoes SA ADR (Brazil) | 419,967 | ||||||
|
| |||||||
13,062,963 | ||||||||
|
| |||||||
Financials—20.5% | ||||||||
19,593 | Axis Bank Ltd. GDR (India)(b)(d) | 973,772 | ||||||
159,286 | Banco Bradesco SA ADR (Brazil) | 1,828,603 | ||||||
27,338 | Banco Santander Brasil SA ADR (Brazil) | 327,509 | ||||||
410,219 | China Life Insurance Co. Ltd., H-Shares (China) | 1,128,784 | ||||||
27,391 | HDFC Bank Ltd. ADR (India) | 2,769,778 | ||||||
87,287 | ICICI Bank Ltd. ADR (India) | 860,650 | ||||||
216,258 | Itau Unibanco Holding SA (Preference Shares) ADR (Brazil) | 2,032,825 | ||||||
17,607 | LexinFintech Holdings Ltd. ADR (China)(b) | 205,122 | ||||||
32,890 | PPDAI Group, Inc. ADR (China)(b) | 158,530 | ||||||
27,950 | Qudian, Inc. ADR (China)(b) | 176,085 | ||||||
129,326 | Sberbank of Russia PJSC ADR (Russia) | 1,650,200 | ||||||
20,835 | State Bank of India GDR (India)(b)(c)(d) | 789,646 | ||||||
8,648 | TCS Group Holding PLC GDR (Russia)(d) | 159,988 | ||||||
196,334 | VTB Bank PJSC GDR (Russia)(d) | 231,085 | ||||||
|
| |||||||
13,292,577 | ||||||||
|
| |||||||
Health Care—1.2% | ||||||||
2,659 | BeiGene Ltd. ADR (China)(b) | 364,416 | ||||||
6,362 | Dr Reddy’s Laboratories Ltd. ADR (India) | 239,720 | ||||||
6,941 | Zai Lab Ltd. ADR (China)(b)(c) | 200,040 | ||||||
|
| |||||||
804,176 | ||||||||
|
| |||||||
Industrials—4.3% | ||||||||
6,815 | Azul SA ADR (Brazil)(b) | 202,883 | ||||||
33,566 | BEST, Inc. ADR (China)(b)(c) | 204,753 | ||||||
247,903 | China Eastern Airlines Corp. Ltd., H-Shares (China) | 158,220 | ||||||
218,782 | China Southern Airlines Co. Ltd., H-Shares (China) | 178,653 | ||||||
13,039 | Embraer SA ADR (Brazil) | 267,560 | ||||||
13,600 | GOL Linhas Aereas Inteligentes SA ADR (Brazil)(b) | 191,896 | ||||||
62,062 | Larsen & Toubro Ltd. GDR (India)(d) | 1,124,563 | ||||||
25,005 | ZTO Express Cayman, Inc. ADR (China) | 497,099 | ||||||
|
| |||||||
2,825,627 | ||||||||
|
| |||||||
Information Technology—5.4% | ||||||||
15,591 | 21Vianet Group, Inc. ADR (China)(b) | 147,179 | ||||||
22,009 | Cheetah Mobile, Inc. ADR (China)(b)(c) | 160,666 | ||||||
5,315 | GDS Holdings Ltd. ADR (China)(b)(c) | 176,830 | ||||||
175,722 | Infosys Ltd. ADR (India) | 1,883,740 | ||||||
11,885 | JinkoSolar Holding Co. Ltd. ADR (China)(b)(c) | 244,712 | ||||||
243,197 | Semiconductor Manufacturing International Corp. (China)(b) | 246,301 | ||||||
74,595 | Wipro Ltd. ADR (India) | 417,732 | ||||||
4,077 | WNS Holdings Ltd. ADR (India)(b) | 215,266 | ||||||
|
| |||||||
3,492,426 | ||||||||
|
|
Number of Shares | Value | |||||||
Common Stocks & Other Equity Interests (continued) | ||||||||
Materials—8.7% | ||||||||
432,738 | Aluminum Corp. of China Ltd., H-Shares (China)(b) | $ | 177,510 | |||||
7,729 | Braskem SA ADR (Brazil) | 222,827 | ||||||
64,482 | Cia Siderurgica Nacional SA ADR (Brazil)(b) | 224,397 | ||||||
76,080 | Gerdau SA (Preference Shares) ADR (Brazil) | 308,124 | ||||||
16,281 | Magnitogorsk Iron & Steel Works PJSC GDR (Russia)(d) | 140,993 | ||||||
35,375 | MMC Norilsk Nickel PJSC ADR (Russia) | 757,025 | ||||||
7,938 | Novolipetsk Steel PJSC GDR (Russia)(d) | 189,163 | ||||||
11,335 | PhosAgro PJSC GDR (Russia)(d) | 154,836 | ||||||
3,973 | Polyus PJSC GDR (Russia)(d) | 162,893 | ||||||
15,322 | Severstal PJSC GDR (Russia)(d) | 236,725 | ||||||
327,667 | Sinopec Shanghai Petrochemical Co. Ltd.,H-Shares (China) | 166,133 | ||||||
21,391 | �� | Suzano Papel e Celulose SA ADR (Brazil) | 544,615 | |||||
46,812 | Tata Steel Ltd. GDR (India)(c)(d) | 325,812 | ||||||
141,178 | Vale SA ADR (Brazil) | 1,761,901 | ||||||
29,870 | Vedanta Ltd. ADR (India) | 286,752 | ||||||
|
| |||||||
5,659,706 | ||||||||
|
| |||||||
Telecommunication Services—0.6% | ||||||||
29,070 | Telefonica Brasil SA (Preference Shares) ADR (Brazil) | 362,794 | ||||||
|
| |||||||
Utilities—2.1% | ||||||||
26,472 | Centrais Eletricas Brasileiras SA ADR (Brazil)(b) | 258,896 | ||||||
27,140 | Cia de Saneamento Basico do Estado de Sao Paulo ADR (Brazil) | 282,256 | ||||||
75,002 | Cia Energetica de Minas Gerais ADR (Brazil) | 286,508 | ||||||
17,842 | Cia Paranaense de Energia ADR (Brazil) | 171,640 | ||||||
339,221 | Huaneng Power International, Inc., H-Shares (China) | 209,156 | ||||||
211,538 | RusHydro PJSC ADR (Russia) | 148,288 | ||||||
|
| |||||||
1,356,744 | ||||||||
|
| |||||||
Total Common Stocks & Other Equity Interests (Cost $57,750,189) | 64,928,514 | |||||||
|
| |||||||
Money Market Fund—0.1% | ||||||||
34,576 | Invesco Premier U.S. Government Money Portfolio—Institutional Class, 2.30%(e) (Cost $34,576) | 34,576 | ||||||
|
| |||||||
Total Investments in Securities (excluding investments purchased with cash collateral from securities on loan) (Cost $57,784,765)—100.0% | 64,963,090 | |||||||
|
| |||||||
Investments Purchased with Cash Collateral from Securities on Loan | ||||||||
Money Market Fund—6.3% | ||||||||
4,142,660 | Invesco Government & Agency Portfolio—Institutional Class, 2.30%(e)(f) (Cost $4,142,660) | 4,142,660 | ||||||
|
| |||||||
Total Investments in Securities (Cost $61,927,425)—106.3% | 69,105,750 | |||||||
Other assets less liabilities—(6.3)% | (4,113,999 | ) | ||||||
|
| |||||||
Net Assets—100.0% | $ | 64,991,751 | ||||||
|
|
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 4 |
|
Invesco BRIC ETF (EEB)(continued)
February 28, 2019
(Unaudited)
Investment Abbreviations:
ADR—American Depositary Receipt
GDR—Global Depositary Receipt
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 & Poor’s. |
(b) | Non-income producing security. |
(c) | All or a portion of this security was out on loan at February 28, 2019. |
(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 February 28, 2019 was $9,888,471, which represented 15.21% of the Fund’s Net Assets. |
(e) | The security and the Fund are advised by wholly-owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated. The rate shown is the 7-day SEC standardized yield as of February 28, 2019. |
(f) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 2K. |
This Fund has holdings greater than 10% of net assets in the following countries:
China | 40.6 | % | ||
Brazil | 22.1 | % | ||
India | 20.2 | % | ||
Russia | 17.0 | % |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 5 |
|
Invesco Raymond James SB-1 Equity ETF (RYJ)
February 28, 2019
(Unaudited)
Portfolio Composition | ||||
Sector Breakdown (% of the Fund’s Net Assets) | ||||
Financials | 20.0 | |||
Energy | 18.9 | |||
Health Care | 17.7 | |||
Information Technology | 15.3 | |||
Industrials | 10.3 | |||
Consumer Discretionary | 8.3 | |||
Real Estate | 5.4 | |||
Communication Services | 4.1 | |||
Money Market Fund Plus Other Assets Less Liabilities | 0.0 |
Schedule of Investments(a)
Number of Shares | Value | |||||||
Common Stocks & Other Equity Interests—100.0% | ||||||||
Communication Services—4.1% | ||||||||
2,944 | Charter Communications, Inc., Class A(b) | $ | 1,015,415 | |||||
46,523 | Iridium Communications, Inc.(b) | 990,475 | ||||||
2,860 | Netflix, Inc.(b) | 1,024,166 | ||||||
110,467 | ORBCOMM, Inc.(b) | 778,792 | ||||||
6,964 | Spotify Technology SA(b) | 975,935 | ||||||
14,152 | T-Mobile US, Inc.(b) | 1,021,916 | ||||||
124,643 | WideOpenWest, Inc.(b) | 1,024,565 | ||||||
|
| |||||||
6,831,264 | ||||||||
|
| |||||||
Consumer Discretionary—8.3% | ||||||||
19,169 | Aaron’s, Inc. | 1,040,685 | ||||||
6,031 | Alibaba Group Holding Ltd. ADR (China)(b) | 1,103,854 | ||||||
17,068 | Best Buy Co., Inc. | 1,174,961 | ||||||
11,632 | Dine Brands Global, Inc. | 1,153,894 | ||||||
8,653 | Dollar General Corp. | 1,025,034 | ||||||
12,353 | Hilton Worldwide Holdings, Inc. | 1,026,534 | ||||||
21,032 | Lennar Corp., Class A | 1,009,115 | ||||||
23,230 | Malibu Boats, Inc., Class A(b) | 1,073,458 | ||||||
53,566 | MarineMax, Inc.(b) | 1,051,501 | ||||||
45,018 | MasterCraft Boat Holdings, Inc.(b) | 1,110,594 | ||||||
2,684 | O’Reilly Automotive, Inc.(b) | 998,341 | ||||||
11,851 | Polaris Industries, Inc. | 1,010,061 | ||||||
17,593 | Tempur Sealy International, Inc.(b) | 1,024,089 | ||||||
|
| |||||||
13,802,121 | ||||||||
|
| |||||||
Energy—18.9% | ||||||||
73,173 | Antero Midstream GP LP(c) | 934,419 | ||||||
27,631 | Cactus, Inc., Class A(b) | 1,001,900 | ||||||
81,710 | Carrizo Oil & Gas, Inc.(b) | 897,176 | ||||||
9,156 | Concho Resources, Inc. | 1,007,160 | ||||||
22,879 | Continental Resources, Inc.(b) | 1,020,632 | ||||||
27,758 | Delek US Holdings, Inc. | 982,078 | ||||||
36,112 | Enterprise Products Partners LP | 998,497 |
Number of Shares | Value | |||||||
Common Stocks & Other Equity Interests (continued) | ||||||||
Energy (continued) | ||||||||
66,466 | Green Plains Partners LP | $ | 1,064,121 | |||||
31,885 | Halliburton Co. | 978,551 | ||||||
56,725 | Kimbell Royalty Partners LP | 992,687 | ||||||
53,706 | Kinder Morgan, Inc. | 1,029,007 | ||||||
60,278 | Marathon Oil Corp. | 1,000,615 | ||||||
15,812 | Marathon Petroleum Corp. | 980,502 | ||||||
30,148 | MPLX LP | 999,708 | ||||||
106,689 | Newpark Resources, Inc.(b) | 943,131 | ||||||
39,675 | Nine Energy Service, Inc.(b) | 1,040,278 | ||||||
162,134 | Oasis Petroleum, Inc.(b) | 906,329 | ||||||
15,085 | Occidental Petroleum Corp. | 997,873 | ||||||
15,114 | ONEOK, Inc. | 971,226 | ||||||
55,531 | Parsley Energy, Inc., Class A(b) | 1,007,332 | ||||||
71,896 | Patterson-UTI Energy, Inc. | 953,341 | ||||||
7,287 | Pioneer Natural Resources Co. | 1,027,103 | ||||||
43,204 | Plains All American Pipeline LP | 1,008,381 | ||||||
42,987 | Plains GP Holdings LP, Class A | 996,868 | ||||||
54,910 | ProPetro Holding Corp.(b) | 1,090,513 | ||||||
125,708 | QEP Resources, Inc.(b) | 975,494 | ||||||
224,792 | SRC Energy, Inc.(b) | 1,034,043 | ||||||
22,935 | Targa Resources Corp. | 922,904 | ||||||
28,277 | Viper Energy Partners LP | 930,596 | ||||||
34,468 | Whiting Petroleum Corp.(b)(c) | 839,985 | ||||||
76,832 | WPX Energy, Inc.(b) | 948,107 | ||||||
70,276 | YPF SA ADR (Argentina) | 993,703 | ||||||
|
| |||||||
31,474,260 | ||||||||
|
| |||||||
Financials—20.0% | ||||||||
20,960 | Aflac, Inc. | 1,029,974 | ||||||
26,535 | Allegiance Bancshares, Inc.(b) | 1,015,229 | ||||||
10,831 | Allstate Corp. (The) | 1,022,230 | ||||||
13,286 | American National Bankshares, Inc. | 475,639 | ||||||
73,382 | Ares Commercial Real Estate Corp. REIT | 1,119,809 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 6 |
|
Invesco Raymond James SB-1 Equity ETF (RYJ)(continued)
February 28, 2019
(Unaudited)
Number of Shares | Value | |||||||
Common Stocks & Other Equity Interests (continued) | ||||||||
Financials (continued) | ||||||||
14,902 | Argo Group International Holdings Ltd. | $ | 1,035,838 | |||||
31,494 | Axos Financial, Inc.(b) | 1,016,626 | ||||||
112,766 | Bancorp, Inc. (The)(b) | 1,022,788 | ||||||
163,941 | BGC Partners, Inc., Class A | 1,004,958 | ||||||
51,145 | Cadence BanCorp | 1,022,389 | ||||||
21,697 | Chemical Financial Corp. | 994,374 | ||||||
11,659 | Comerica, Inc. | 1,015,616 | ||||||
47,205 | ConnectOne Bancorp, Inc. | 1,018,212 | ||||||
43,084 | FedNat Holding Co. | 786,283 | ||||||
68,227 | Fidus Investment Corp. | 1,024,087 | ||||||
22,233 | FVCBankcorp, Inc.(b) | 394,636 | ||||||
49,261 | Goldman Sachs BDC, Inc. | 1,026,599 | ||||||
54,330 | Granite Point Mortgage Trust, Inc. REIT | 1,033,357 | ||||||
12,528 | Kemper Corp. | 1,041,077 | ||||||
57,645 | Ladder Capital Corp. REIT | 1,057,786 | ||||||
40,391 | Meta Financial Group, Inc. | 943,130 | ||||||
48,587 | Old Republic International Corp. | 1,013,525 | ||||||
28,670 | Origin Bancorp, Inc. | 1,033,840 | ||||||
24,808 | PacWest Bancorp | 1,017,624 | ||||||
19,852 | Preferred Bank | 1,016,819 | ||||||
14,205 | Progressive Corp. (The) | 1,035,545 | ||||||
62,931 | Regions Financial Corp. | 1,032,068 | ||||||
14,252 | State Street Corp. | 1,024,291 | ||||||
4,105 | SVB Financial Group(b) | 1,014,592 | ||||||
43,607 | TCF Financial Corp. | 998,600 | ||||||
28,488 | Union Bankshares Corp. | 1,013,318 | ||||||
6,018 | Willis Towers Watson PLC | 1,035,216 | ||||||
13,611 | Wintrust Financial Corp. | 1,002,722 | ||||||
20,077 | Zions Bancorp NA | 1,025,935 | ||||||
|
| |||||||
33,364,732 | ||||||||
|
| |||||||
Health Care—17.7% | ||||||||
37,384 | Acadia Healthcare Co., Inc.(b)(c) | 982,825 | ||||||
16,919 | ANI Pharmaceuticals, Inc.(b) | 1,113,101 | ||||||
321,734 | Antares Pharma, Inc.(b)(c) | 1,155,025 | ||||||
4,134 | Becton, Dickinson and Co. | 1,028,498 | ||||||
7,716 | Bluebird Bio, Inc.(b) | 1,197,678 | ||||||
25,668 | Boston Scientific Corp.(b) | 1,029,800 | ||||||
38,316 | CareDx, Inc.(b) | 1,192,394 | ||||||
92,836 | ChemoCentryx, Inc.(b) | 997,987 | ||||||
16,032 | CVS Health Corp. | 927,131 | ||||||
71,298 | Flexion Therapeutics, Inc.(b) | 985,338 | ||||||
50,918 | G1 Therapeutics, Inc.(b) | 939,946 | ||||||
10,190 | Galapagos NV ADR (Belgium)(b) | 994,748 | ||||||
15,371 | Gilead Sciences, Inc. | 999,422 | ||||||
4,069 | ICU Medical, Inc.(b) | 999,998 | ||||||
12,295 | Incyte Corp.(b) | 1,060,198 | ||||||
10,396 | Intercept Pharmaceuticals, Inc.(b)(c) | 1,036,897 | ||||||
276,761 | Ocular Therapeutix, Inc.(b)(c) | 1,231,587 | ||||||
14,708 | Quidel Corp.(b) | 964,257 | ||||||
55,531 | Ra Pharmaceuticals, Inc.(b) | 1,070,082 | ||||||
74,605 | RadNet, Inc.(b) | 1,017,612 | ||||||
22,270 | REGENXBIO, Inc.(b)(c) | 1,152,027 | ||||||
13,943 | Sol-Gel Technologies Ltd. (Israel)(b) | 97,601 | ||||||
20,231 | Spark Therapeutics, Inc.(b) | 2,292,172 | ||||||
3,594 | Teleflex, Inc. | 1,041,685 | ||||||
435,192 | Teligent, Inc.(b)(c) | 687,603 | ||||||
3,820 | UnitedHealth Group, Inc. | 925,280 |
Number of Shares | Value | |||||||
Common Stocks & Other Equity Interests (continued) | ||||||||
Health Care (continued) | ||||||||
117,395 | Viking Therapeutics, Inc.(b)(c) | $ | 987,292 | |||||
94,541 | Voyager Therapeutics, Inc.(b) | 1,418,115 | ||||||
|
| |||||||
29,526,299 | ||||||||
|
| |||||||
Industrials—10.3% | ||||||||
16,254 | Alaska Air Group, Inc. | 1,002,872 | ||||||
29,382 | Casella Waste Systems, Inc., Class A(b) | 1,036,597 | ||||||
75,954 | Construction Partners, Inc., Class A(b) | 938,792 | ||||||
62,587 | Covanta Holding Corp. | 1,062,727 | ||||||
78,953 | Evoqua Water Technologies Corp.(b) | 1,072,182 | ||||||
16,579 | Fastenal Co. | 1,043,482 | ||||||
72,284 | Foundation Building Materials, Inc.(b) | 803,798 | ||||||
12,274 | Genesee & Wyoming, Inc., Class A(b) | 1,006,468 | ||||||
49,713 | GMS, Inc.(b) | 971,889 | ||||||
9,270 | Kansas City Southern | 1,007,093 | ||||||
47,975 | Knoll, Inc. | 1,015,151 | ||||||
110,348 | Mesa Air Group, Inc.(b) | 1,111,204 | ||||||
18,434 | SkyWest, Inc. | 996,173 | ||||||
17,748 | Spirit Airlines, Inc.(b) | 998,325 | ||||||
6,021 | Union Pacific Corp. | 1,009,722 | ||||||
9,270 | United Parcel Service, Inc., Class B | 1,021,554 | ||||||
12,340 | Waste Connections, Inc. | 1,029,156 | ||||||
|
| |||||||
17,127,185 | ||||||||
|
| |||||||
Information Technology—15.3% | ||||||||
15,912 | Alarm.com Holdings, Inc.(b) | 1,044,305 | ||||||
12,557 | Arrow Electronics, Inc.(b) | 1,000,793 | ||||||
22,915 | Avnet, Inc. | 996,573 | ||||||
21,436 | Bottomline Technologies (DE), Inc.(b) | 1,069,228 | ||||||
62,549 | Carbon Black, Inc.(b) | 818,766 | ||||||
23,587 | EchoStar Corp., Class A(b) | 909,515 | ||||||
18,238 | Envestnet, Inc.(b) | 1,112,700 | ||||||
133,017 | Everi Holdings, Inc.(b) | 1,022,901 | ||||||
19,499 | FLIR Systems, Inc. | 1,003,223 | ||||||
35,138 | GDS Holdings Ltd. ADR (China)(b)(c) | 1,169,041 | ||||||
165,522 | Internap Corp.(b)(c) | 895,474 | ||||||
6,719 | IPG Photonics Corp.(b) | 1,041,647 | ||||||
16,676 | Itron, Inc.(b) | 883,995 | ||||||
21,418 | Lumentum Holdings, Inc.(b) | 1,065,545 | ||||||
9,609 | Microsoft Corp. | 1,076,496 | ||||||
56,352 | MiX Telematics Ltd. ADR (South Africa) | 1,074,069 | ||||||
47,271 | nLight, Inc.(b) | 1,011,127 | ||||||
22,673 | Rapid7, Inc.(b) | 1,043,638 | ||||||
9,909 | RingCentral, Inc., Class A(b) | 1,043,319 | ||||||
6,494 | salesforce.com, Inc.(b) | 1,062,743 | ||||||
4,486 | ServiceNow, Inc.(b) | 1,074,128 | ||||||
17,373 | SS&C Technologies Holdings, Inc. | 1,069,829 | ||||||
114,268 | Switch, Inc., Class A(c) | 986,133 | ||||||
10,105 | SYNNEX Corp. | 991,503 | ||||||
11,656 | Worldpay, Inc., Class A(b) | 1,116,645 | ||||||
|
| |||||||
25,583,336 | ||||||||
|
| |||||||
Real Estate—5.4% | ||||||||
15,957 | Agree Realty Corp. REIT | 1,048,854 | ||||||
45,555 | CareTrust REIT, Inc. REIT | 1,017,699 | ||||||
20,542 | CBRE Group, Inc., Class A(b) | 1,022,170 | ||||||
17,986 | CyrusOne, Inc. REIT | 896,422 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 7 |
|
Invesco Raymond James SB-1 Equity ETF (RYJ)(continued)
February 28, 2019
(Unaudited)
Number of Shares | Value | |||||||
Common Stocks & Other Equity Interests (continued) | ||||||||
Real Estate (continued) | ||||||||
2,386 | Equinix, Inc. REIT | $ | 1,010,471 | |||||
44,320 | Invitation Homes, Inc. REIT | 1,019,360 | ||||||
69,611 | Landmark Infrastructure Partners LP | 990,565 | ||||||
59,649 | Retail Opportunity Investments Corp. REIT | 1,024,173 | ||||||
39,797 | Weyerhaeuser Co. REIT | 990,547 | ||||||
|
| |||||||
9,020,261 | ||||||||
|
| |||||||
Total Investments in Securities (excluding investments purchased with cash collateral from securities on loan) (Cost $153,284,052)—100.0% | 166,729,458 | |||||||
|
| |||||||
Investments Purchased with Cash Collateral from Securities on Loan | ||||||||
Money Market Fund—3.5% | ||||||||
5,890,705 | Invesco Government & Agency Portfolio—Institutional Class, 2.30%(d)(e) (Cost $5,890,705) | 5,890,705 | ||||||
|
| |||||||
Total Investments in Securities (Cost $159,174,757)—103.5% | 172,620,163 | |||||||
Other assets less liabilities—(3.5)% | (5,869,644 | ) | ||||||
|
| |||||||
Net Assets—100.0% | $ | 166,750,519 | ||||||
|
|
Investment Abbreviations:
ADR—American Depositary Receipt
REIT—Real Estate Investment Trust
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 & Poor’s. |
(b) | Non-income producing security. |
(c) | All or a portion of this security was out on loan at February 28, 2019. |
(d) | The security and the Fund are advised by wholly-owned subsidiaries of Invesco Ltd. and are therefore considered to be affiliated. The rate shown is the 7-day SEC standardized yield as of February 28, 2019. |
(e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 2K. |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 8 |
|
Statements of Assets and Liabilities
February 28, 2019
(Unaudited)
Invesco BRIC ETF (EEB) | Invesco Raymond James SB-1 Equity ETF (RYJ) | |||||||
Assets: | ||||||||
Unaffiliated investments in securities, at value(a) | $ | 64,928,514 | $ | 166,729,458 | ||||
Affiliated investments in securities, at value | 4,177,236 | 5,890,705 | ||||||
Cash | 322 | — | ||||||
Receivables: | ||||||||
Dividends | 184,649 | 116,871 | ||||||
Securities lending | 1,676 | 3,298 | ||||||
Foreign tax reclaims | 700 | 6,723 | ||||||
Investments sold | — | 5,132,601 | ||||||
Other assets | 318 | — | ||||||
|
|
|
| |||||
Total Assets | 69,293,415 | 177,879,656 | ||||||
|
|
|
| |||||
Liabilities: | ||||||||
Due to custodian | — | 40,840 | ||||||
Payables: | ||||||||
Collateral upon return of securities loaned | 4,142,660 | 5,890,705 | ||||||
Investments purchased | — | 5,025,667 | ||||||
Accrued advisory fees | 14,192 | 171,925 | ||||||
Accrued trustees’ and officer’s fees | 5,426 | — | ||||||
Accrued expenses | 139,386 | — | ||||||
|
|
|
| |||||
Total Liabilities | 4,301,664 | 11,129,137 | ||||||
|
|
|
| |||||
Net Assets | $ | 64,991,751 | $ | 166,750,519 | ||||
|
|
|
| |||||
Net Assets Consist of: | ||||||||
Shares of beneficial interest | $ | 237,191,165 | $ | 206,080,926 | ||||
Distributable earnings | (172,199,414 | ) | (39,330,407 | ) | ||||
|
|
|
| |||||
Net Assets | $ | 64,991,751 | $ | 166,750,519 | ||||
|
|
|
| |||||
Shares outstanding (unlimited amount authorized, $0.01 par value) | 1,800,800 | 3,822,822 | ||||||
Net asset value | $ | 36.09 | $ | 43.62 | ||||
|
|
|
| |||||
Market price | $ | 36.14 | $ | 43.65 | ||||
|
|
|
| |||||
Unaffiliated investments in securities, at cost | $ | 57,750,189 | $ | 153,284,052 | ||||
|
|
|
| |||||
Affiliated investments in securities, at cost | $ | 4,177,236 | $ | 5,890,705 | ||||
|
|
|
| |||||
(a) Includes securities on loan with an aggregate value of | $ | 2,360,144 | $ | 5,680,410 | ||||
|
|
|
|
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 9 |
|
For the six months ended February 28, 2019
(Unaudited)
Invesco BRIC ETF (EEB) | Invesco Raymond James SB-1 Equity ETF (RYJ) | |||||||
Investment Income: | ||||||||
Unaffiliated dividend income | $ | 596,315 | $ | 1,182,604 | ||||
Affiliated dividend income | 1,610 | 5,459 | ||||||
Securities lending income | 25,113 | 65,290 | ||||||
Foreign withholding tax | (45,406 | ) | (1,752 | ) | ||||
|
|
|
| |||||
Total Income | 577,632 | 1,251,601 | ||||||
|
|
|
| |||||
Expenses: | ||||||||
Advisory fees | 157,160 | 637,938 | ||||||
Professional fees | 17,182 | — | ||||||
Accounting & administration fees | 15,267 | — | ||||||
Sub-licensing fees | 12,573 | — | ||||||
Custodian & transfer agent fees | 8,691 | — | ||||||
Printing | 6,131 | — | ||||||
Listing fee and expenses | 3,489 | — | ||||||
Trustees’ and officer’s fees | 2,250 | — | ||||||
Other | 2,083 | — | ||||||
|
|
|
| |||||
Total Expenses | 224,826 | 637,938 | ||||||
|
|
|
| |||||
Less: Waivers | (23,891 | ) | (458 | ) | ||||
|
|
|
| |||||
Net Expenses | 200,935 | 637,480 | ||||||
|
|
|
| |||||
Net Investment Income | 376,697 | 614,121 | ||||||
|
|
|
| |||||
Realized and Unrealized Gain (Loss): | ||||||||
Net realized gain (loss) from: | ||||||||
Investment securities | (7,217,032 | ) | (9,392,292 | ) | ||||
In-kind redemptions | 881,660 | 5,926,168 | ||||||
Foreign currencies | (2,028 | ) | — | |||||
|
|
|
| |||||
Net realized gain (loss) | (6,337,400 | ) | (3,466,124 | ) | ||||
|
|
|
| |||||
Net change in unrealized appreciation (depreciation) | 8,773,438 | (18,592,915 | ) | |||||
|
|
|
| |||||
Net realized and unrealized gain (loss) | 2,436,038 | (22,059,039 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | $ | 2,812,735 | $ | (21,444,918 | ) | |||
|
|
|
|
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 10 |
|
Statements of Changes in Net Assets
For the six months ended February 28, 2019 and the year ended August 31, 2018
(Unaudited)
Invesco BRIC ETF (EEB) | Invesco Raymond James SB-1 Equity ETF (RYJ) | |||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income | $ | 376,697 | $ | 1,546,438 | $ | 614,121 | $ | 1,149,260 | ||||||||
Net realized gain (loss) | (6,337,400 | ) | (932,833 | ) | (3,466,124 | ) | 24,357,786 | |||||||||
Net change in unrealized appreciation (depreciation) | 8,773,438 | 440,634 | (18,592,915 | ) | 17,075,286 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 2,812,735 | 1,054,239 | (21,444,918 | ) | 42,582,332 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Distributions to Shareholders from: | ||||||||||||||||
Distributable earnings | (1,731,261 | ) | (1,588,508 | ) | (2,047,360 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Shareholder Transactions: | ||||||||||||||||
Proceeds from shares sold | 1,592,975 | 7,466,289 | 15,349,110 | 81,954,730 | ||||||||||||
Value of shares repurchased | (6,749,902 | ) | (24,294,005 | ) | (25,666,631 | ) | (109,778,150 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from shares transactions | (5,156,927 | ) | (16,827,716 | ) | (10,317,521 | ) | (27,823,420 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Increase (Decrease) in Net Assets | (4,075,453 | ) | (17,361,985 | ) | (33,809,799 | ) | 14,758,912 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net Assets: | ||||||||||||||||
Beginning of period | 69,067,204 | 86,429,189 | 200,560,318 | 185,801,406 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 64,991,751 | $ | 69,067,204 | $ | 166,750,519 | $ | 200,560,318 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Changes in Shares Outstanding: | ||||||||||||||||
Shares sold | 50,000 | 200,000 | 350,000 | 1,800,000 | ||||||||||||
Shares repurchased | (200,000 | ) | (650,000 | ) | (600,000 | ) | (2,450,000 | ) | ||||||||
Shares outstanding, beginning of period | 1,950,800 | 2,400,800 | 4,072,822 | 4,722,822 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Shares outstanding, end of period | 1,800,800 | 1,950,800 | 3,822,822 | 4,072,822 | ||||||||||||
|
|
|
|
|
|
|
|
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
| 11 |
|
Invesco BRIC ETF (EEB)
Six Months Ended February 28, 2019 (Unaudited) | Years Ended August 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net asset value at beginning of period | $ | 35.40 | $ | 36.00 | $ | 28.64 | $ | 24.97 | $ | 37.98 | $ | 31.99 | ||||||||||||
Net investment income(a) | 0.20 | 0.66 | 0.53 | 0.36 | 0.56 | 0.75 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.48 | (0.62 | ) | 7.24 | 3.79 | (12.54 | ) | 6.10 | ||||||||||||||||
Total from investment operations | 1.68 | 0.04 | 7.77 | 4.15 | (11.98 | ) | 6.85 | |||||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net investment income | (0.99 | ) | (0.64 | ) | (0.41 | ) | (0.48 | ) | (1.03 | ) | (0.86 | ) | ||||||||||||
Net asset value at end of period | $ | 36.09 | $ | 35.40 | $ | 36.00 | $ | 28.64 | $ | 24.97 | $ | 37.98 | ||||||||||||
Market price at end of period | $ | 36.14 | (b) | $ | 35.39 | (b) | $ | 36.03 | $ | 28.54 | $ | 24.95 | $ | 37.84 | ||||||||||
Net asset value Total Return(c) | 5.20 | % | 0.01 | % | 27.49 | % | 16.97 | % | (31.90 | )% | 21.68 | % | ||||||||||||
Market Price Total Return(c) | 5.36 | % | (0.10 | )% | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $ | 64,992 | $ | 69,067 | $ | 86,429 | $ | 74,480 | $ | 86,177 | $ | 180,427 | ||||||||||||
Ratio to average net assets of: | ||||||||||||||||||||||||
Expenses, after waivers | 0.64 | %(d) | 0.59 | % | 0.64 | % | 0.64 | % | 0.64 | % | 0.64 | % | ||||||||||||
Expenses, prior to waivers | 0.72 | %(d) | 0.67 | % | 0.75 | % | 0.78 | % | 0.70 | % | 0.66 | % | ||||||||||||
Net investment income, after waivers | 1.20 | %(d) | 1.75 | % | 1.69 | % | 1.41 | % | 1.81 | % | 2.17 | % | ||||||||||||
Portfolio turnover rate(e) | 36 | % | 39 | % | 41 | % | 24 | % | 24 | % | 68 | % |
(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 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. |
Invesco Raymond James SB-1 Equity ETF (RYJ)
Six Months Ended February 28, 2019 (Unaudited) | Years Ended August 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net asset value at beginning of period | $ | 49.24 | $ | 39.34 | $ | 35.99 | $ | 34.24 | $ | 35.26 | $ | 29.06 | ||||||||||||
Net investment income(a) | 0.15 | 0.27 | 0.12 | 0.29 | 0.21 | 0.12 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (5.25 | ) | 9.63 | 3.82 | 1.76 | (1.14 | ) | 6.19 | ||||||||||||||||
Total from investment operations | (5.10 | ) | 9.90 | 3.94 | 2.05 | (0.93 | ) | 6.31 | ||||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net investment income | (0.52 | ) | — | (0.52 | ) | (0.30 | ) | (0.09 | ) | (0.11 | ) | |||||||||||||
Return of capital | — | — | (0.07 | ) | — | — | — | |||||||||||||||||
Total distributions to shareholders | (0.52 | ) | — | (0.59 | ) | (0.30 | ) | (0.09 | ) | (0.11 | ) | |||||||||||||
Net asset value at end of period | $ | 43.62 | $ | 49.24 | $ | 39.34 | $ | 35.99 | $ | 34.24 | $ | 35.26 | ||||||||||||
Market price at end of period | $ | 43.65 | (b) | $ | 49.19 | (b) | $ | 39.32 | $ | 36.01 | $ | 34.19 | $ | 35.28 | ||||||||||
Net asset value Total Return(c) | (10.06 | )% | 25.16 | % | 11.00 | % | 6.08 | % | (2.64 | )% | 21.75 | % | ||||||||||||
Market Price Total Return(c) | (9.91 | )% | 25.10 | % | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $ | 166,751 | $ | 200,560 | $ | 185,801 | $ | 180,784 | $ | 240,495 | $ | 267,054 | ||||||||||||
Ratio to average net assets of: | ||||||||||||||||||||||||
Expenses, after waivers | 0.75 | %(d)(e) | 0.71 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.76 | % | ||||||||||||
Expenses, prior to waivers | 0.75 | %(d)(e) | 0.71 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.76 | % | ||||||||||||
Net investment income, after waivers | 0.72 | %(d) | 0.60 | % | 0.30 | % | 0.87 | % | 0.59 | % | 0.36 | % | ||||||||||||
Portfolio turnover rate(f) | 51 | % | 82 | % | 90 | % | 118 | % | 95 | % | 114 | % |
(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 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) | 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 Fund’s total return. |
(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.
| 12 |
|
Invesco Exchange-Traded Fund Trust
February 28, 2019
(Unaudited)
Note 1—Organization
Invesco Exchange-Traded Fund Trust (the “Trust”) was organized as a Massachusetts business trust on June 9, 2000 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 BRIC ETF (EEB) | “BRIC ETF” | |
Invesco Raymond James SB-1 Equity ETF (RYJ) | “Raymond James SB-1 Equity 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 “Fund’s Shares.” Each Fund’s Shares are listed and traded on NYSE Arca, Inc.
Effective April 30, 2019, each Fund’s fiscal year-end will change from August 31 to April 30.
The market price of each Share may differ to some degree from a Fund’s 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 | |
BRIC ETF | BNY Mellon BRIC Select DR Index | |
Raymond James SB-1 Equity ETF | Raymond James SB-1 Equity Index |
Note 2—Significant 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 Services—Investment 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 company’s 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
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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 (“ADRs”) and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, 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 security’s 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 issuer’s assets, general economic conditions, interest rates, investor perceptions 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 those APs will establish or maintain an active trading market for the Shares. This risk may be heightened to the extent that securities underlying 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, which may be more likely to trade at a premium or discount to each Fund’s net asset value (“NAV”) and possibly face trading halts and/or delisting. This risk may be heightened for a Fund if it invests in non-U.S. securities, which may have lower trading volumes.
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 particular industries will become negative. The value of a company’s 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 company’s 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 company’s 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.
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Non-Correlation Risk.Each Fund’s return may not match the return of its Underlying Index for a number of reasons. For example, each Fund incurs operating expenses not applicable to its Underlying Index, and incurs costs in buying and selling securities, especially when rebalancing the Fund’s securities holdings to reflect changes in the composition of the Underlying Index. In addition, the performance of each Fund and its Underlying Index may vary due to asset valuation differences and differences between each Fund’s portfolio and its Underlying Index resulting from legal restrictions, costs or liquidity constraints.
Industry Concentration Risk.In following its methodology, each Fund’s 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 faces 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.
Non-Diversified Fund Risk.Each Fund is non-diversified and can invest a greater portion of its assets in securities of individual issuers than diversified funds. As a result, 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 Fund’s volatility and cause the performance of a relatively small number of issuers to have a greater impact on a Fund’s performance.
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.
Small- and Mid-Capitalization Securities Risk. For Raymond James SB-1 Equity ETF, investing in securities of small- and 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. 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.
Index Risk. Unlike many investment companies, the Funds do not utilize investing strategies that seek returns in excess of their Underlying Indexes. Therefore, a Fund would not necessarily buy or sell a security unless that security is added or removed, respectively, from its respective Underlying Index, even if that security generally is underperforming.
Emerging Markets Investment Risk.For BRIC ETF, 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.
REIT Risk.For Raymond James SB-1 Equity ETF, REITs are subject to risks inherent in the direct ownership of real estate. These risks include, but are not limited to, a possible lack of mortgage funds and associated interest rate risks, overbuilding, property vacancies, increases in property taxes and operating expenses, changes in zoning laws, losses due to environmental damages and changes in neighborhood values and appeal to purchasers. REITs may be affected by changes in the values of the underlying properties that they own or operate and could fail to qualify for favorable tax or regulatory treatment. REITs also are dependent upon specialized management skills, and their investments may be concentrated in relatively few properties, or in a small geographic area or a single property type. REITs rely heavily on cash flows and a variety of economic and other factors may adversely affect a lessee’s ability to meet its obligations to a REIT. Should a lessee default on their loan, the REIT may experience delays in enforcing its rights as a lessor and may incur substantial costs associated in protecting its investments.
Investments in BDCs Risk. For Raymond James SB-1 Equity ETF, the 1940 Act imposes certain restraints upon the operations of a business development company (“BDC”). For example, BDCs are required to invest at least 70% of their total assets primarily in
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securities of private companies or thinly traded U.S. public companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. Additionally, a BDC may incur indebtedness only in amounts such that the BDC’s asset coverage equals at least 200% after such incurrence. These limitations on asset mix and leverage may prohibit the way that the BDC raises capital. BDCs generally invest in less mature private companies, which involve greater risk than well established, publicly-traded companies
Master Limited Partnership (“MLP”) Risk. For Raymond James SB-1 Equity ETF, an MLP is an entity that is classified as a partnership under the Internal Revenue Code of 1986, as amended, and whose partnership interests or “units” are traded on securities exchanges like shares of corporate stock. An investment in MLPs involves risks that differ from a similar investment in equity securities, such as common stock, of a corporation. Investments in MLP units are subject to certain risks inherent in the structure of MLPs, including (i) tax risks, (ii) the limited ability to elect or remove management or the general partner or managing member, (iii) limited voting rights and (iv) conflicts of interest between the general partner or managing member and its affiliates and the limited partners or members.
ADR and GDR Risk.ADRs are certificates that evidence ownership of shares of a foreign issuer and are alternatives to purchasing directly underlying foreign securities in their national markets and currencies. Global depositary receipts (“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. 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.
Currency Risk.For BRIC ETF, because the Fund’s NAV is determined in U.S. dollars, the Fund’s 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 the Fund’s 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.
Foreign Investment Risk. For BRIC ETF, 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 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. As the Fund may invest 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 Fund’s returns.
C. 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 Fund’s 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 issuer’s 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.
D. Repurchase Agreements
The Funds may enter into repurchase agreements with financial institutions. In a repurchase agreement, a Fund buys a security and the seller simultaneously agrees to repurchase the security on a specified future date at an agreed-upon price. The repurchase price reflects an agreed-upon interest rate during the time the Fund’s money is invested in the security. Because the security constitutes collateral for the repurchase obligation, a repurchase agreement can be considered a collateralized loan. The Funds follow certain procedures designed to minimize the risks inherent in such agreements. These procedures include effecting repurchase transactions only with large, well-capitalized and well-established financial institutions whose condition will be continually monitored. In addition, the value of the collateral underlying the repurchase agreement will always be at least equal to the repurchase price, including any accrued interest earned on the repurchase agreement. In the event of a default or bankruptcy by a selling financial institution, the Funds will seek to liquidate such collateral. However, the exercising of the Funds right to liquidate such collateral could involve certain costs or delays and, to the extent that proceeds from any sale upon a default of the obligation to repurchase were less than the repurchase price, the Funds could suffer a loss. It is the current policy of the Funds not to invest in repurchase agreements that do not mature within seven days if
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any such investment, together with any other illiquid assets held by the Funds, amounts to more than 15% of a Fund’s net assets. The investments of the Funds in repurchase agreements, at times, may be substantial when, in the view of the Adviser, liquidity or other considerations so warrant.
E. Foreign Currency Translations
The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income, and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Funds. Foreign investments may also subject the Funds to foreign government exchange restrictions, expropriation, taxation, or other political, social or economic developments, all of which could affect the market and/or credit risk of the investments.
The Funds do not isolate that portion of the results of operations resulting from changes in the foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Reported net realized foreign exchange gains and losses arise from sales of foreign currencies and currency gains or losses realized between the trade and settlement dates on investment transactions. Net unrealized exchange gains and losses arise from changes in the fair values of assets and liabilities other than investments in securities at the fiscal period end, resulting from changes in exchange rates.
F. Investment Transactions and Investment Income
Security transactions are recorded on the trade date for financial reporting purposes. Realized gains and losses from securities transactions are recorded using the identified cost basis. Dividend income is recorded on the ex-dividend date, net of applicable taxes withheld by foreign countries. Taxable non-cash dividends are recorded as dividend income. Interest income, including amortization of premiums and accretion of discounts, is accrued on a daily basis. 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.
The Funds may periodically participate in litigation related to each Fund’s 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 Fund’s NAV and, accordingly, they reduce each Fund’s 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.
G. Dividends and Distributions to Shareholders
The Funds intend to pay substantially all of their net investment income to shareholders, if any, to its shareholders annually. In addition, the Funds intend to distribute any capital gains to shareholders as capital gain dividends at least annually. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Distributions in excess of tax basis earnings and profits, if any, are reported in such Fund’s financial statements as a tax return of capital at fiscal year-end.
H. Federal Income Taxes
Each Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to 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 Fund’s 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.
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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.
I. Expenses
Expenses of the Trust that are directly identifiable to a specific Fund are applied to that Fund. Expenses of the Trust 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.
BRIC ETF is responsible for all of its expenses, including the investment advisory fees, cost of transfer agency, custody, fund administration, legal, audit and other services, interest, taxes, brokerage commissions and other expenses connected with executions of portfolio transactions, sub-licensing fees related to its Underlying Index, any distribution fees or expenses, litigation expenses, fees payable to the Trust’s Board members who are not “interested persons” (as defined in the 1940 Act) of the Trust or the Adviser (the “Independent Trustees”), 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.
Raymond James SB-1 Equity 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 Fund, 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, acquired fund fees and expenses, if any, litigation expenses and other extraordinary expenses.
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.
J. 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.
K. Securities Lending
During the six-months period ended February 28, 2019, each Fund participated in securities lending. Each Fund loaned portfolio securities having a market value up to one-third of each Fund’s 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. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to Counterparties, are included inSecurities lending incomeon the Statements of Operations. The aggregate value of securities out on loan, if any, is shown on the Statements of Assets and Liabilities.
L. Distributions from Distributable Earnings
In accordance with the Securities and Exchange Commission’s issuance of Disclosure Update and Simplification, the Funds have presented the total, rather than the components of distributions to shareholders, except for tax return of capital distributions, if any, in the Statements of Changes in Net Assets.
For the period ended August 31, 2018, distributions from distributable earnings consisted of distributions from net investment income.
Note 3—Investment Advisory Agreement 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 Fund’s investments, managing the Fund’s business affairs and providing certain clerical, bookkeeping and other administrative services.
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Pursuant to an Investment Advisory Agreement, BRIC ETF accrues daily and pays monthly to the Adviser an annual fee equal to 0.50% of its average daily net assets.
The Adviser has agreed to waive fees and/or pay Fund expenses to the extent necessary to prevent the operating expenses of BRIC ETF (excluding interest expenses, brokerage commissions and other trading expenses, sub-licensing fees, offering costs, taxes, acquired fund fees and expenses, if applicable, and extraordinary expenses) from exceeding 0.60% of the Fund’s average daily net assets per year through at least May 18, 2020. Neither the Advisor nor the Fund can discontinue the agreement prior to its expiration.
Further, the Adviser agrees to reimburse BRIC ETF in the amount equal to the licensing fees that the Fund pays that cause the Fund’s operating expenses (excluding interest expenses, brokerage commissions and other trading expenses, offering costs, taxes, acquired fund fees and expenses and extraordinary expenses) to exceed 0.64% through at least May 18, 2020.
Pursuant to another Investment Advisory Agreement, Raymond James SB-1 Equity ETF accrues daily and pays monthly to the Adviser, as compensation for its services, an annual unitary management fee equal to 0.75% of its average daily net assets. Out of the unitary management fee, the Adviser has agreed to pay for substantially all expenses of Raymond James SB-1 Equity ETF, 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, acquired fund fees and expenses, if any, litigation expenses and other extraordinary expenses.
The Adviser also has agreed to waive a portion of the unitary management fee for Raymond James SB-1 Equity ETF through at least May 18, 2020 to prevent the Fund’s operating 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) from exceeding 0.75%. Neither the Adviser nor the Fund can discontinue the agreement prior to its expiration.
Additionally, through at least August 31, 2020, the Adviser has contractually agreed to waive a portion of each Fund’s management fee in an amount equal to 100% of the net advisory fees an affiliate of the Adviser receives that are attributable to certain of the Fund’s investment in money market funds managed by that affiliate (excluding investment 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 February 28, 2019, the Adviser waived fees in the following amounts:
BRIC ETF | $ | 23,891 | ||
Raymond James SB-1 Equity ETF | 458 |
The fees waived and/or expenses borne by the Adviser for BRIC ETF are subject to recapture by the Adviser up to three years from the date the fees were waived or the expenses were incurred, but no recapture payment will be made by the Fund if it would result in the Fund 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.
The amounts available for potential recapture by the Adviser for BRIC ETF and the expiration schedule at February 28, 2019 are as follows:
Total Potential Recapture Amounts | Potential Recapture Amounts Expiring | |||||||||||||||||||
8/31/19 | 8/31/20 | 8/31/21 | 2/28/2022 | |||||||||||||||||
BRIC ETF | $ | 59,065 | $ | — | $ | — | $ | 35,300 | $ | 23,765 |
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 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.
The Adviser has entered into licensing agreements on behalf of each Fund with the following entities (each a “Licensor”):
Fund | Licensor | |
BRIC ETF | The Bank of New York Mellon | |
Raymond James SB-1 Equity ETF | Raymond James Research Services, LLC |
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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 Trust’s 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.
Note 4—Additional 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 investment’s 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 the Fund’s 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. |
As of February 28, 2019, all of the securities in each Fund were valued based on Level 1 inputs (see the Schedules of Investments for security categories). 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.
Note 5—Tax 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. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. 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 following table presents available capital loss carryforwards and expiration dates for each Fund as of August 31, 2018:
Post-effective/no expiration | ||||||||||||||||
Expires in 2019 | Short-Term | Long-Term | Total* | |||||||||||||
BRIC ETF | $ | 8,921,151 | $ | 926,938 | $ | 162,204,902 | $ | 172,052,991 | ||||||||
Raymond James SB-1 Equity ETF | 2,213,777 | 27,300,717 | 10,846,819 | 40,361,313 |
* | Capital loss carryforwards as of the date listed above is 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 7—Investment Transactions
For the six-month period ended February 28, 2019, 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 | |||||||
BRIC ETF | $ | 23,156,554 | $ | 24,422,352 | ||||
Raymond James SB-1 Equity ETF | 89,270,452 | 89,497,000 |
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For the six-month period ended February 28, 2019, in-kind transactions associated with creations and redemptions were as follows:
Cost of Securities Received | Value of Securities Delivered | |||||||
BRIC ETF | $ | 1,588,127 | $ | 6,740,330 | ||||
Raymond James SB-1 Equity ETF | 15,288,720 | 26,511,271 |
Gains (losses) on in-kind transactions are generally not considered taxable gains (losses) for federal income tax purposes.
At February 28, 2019, 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 | |||||||||||||
BRIC ETF | $ | 13,130,116 | $ | (7,091,621 | ) | $ | 6,038,495 | $ | 63,067,255 | |||||||
Raymond James SB-1 Equity ETF | 22,556,904 | (16,147,351 | ) | 6,409,553 | 166,210,610 |
Note 8—Trustees’ and Officer’s Fees
Trustees’ and Officer’s Fees include amounts accrued by each Fund to pay remuneration to the Independent Trustees and an Officer of the Trust. The Adviser, as a result of the unitary management fee, pays for such compensation for Raymond James SB-1 Equity 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 his compensation (“Deferral Fees”). Such Deferral Fees are deemed to be invested in select Invesco Funds. The Deferral Fees payable to a Participating Trustee are valued as of the date such Deferral Fees would have been paid to the 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 9—Capital
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 generally in exchange for Deposit Securities. 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 Trust’s Participating 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 Participant’s 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 Fund’s Shares are disclosed in detail in the Statements of Changes in Net Assets.
Note 10—Indemnifications
Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. Each Independent Trustee is also indemnified against certain liabilities arising out of the performance of his 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 Trust’s 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.
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Note 11—Subsequent Event
S&P Opco LLC, a subsidiary of S&P Dow Jones Indices LLC (“S&P DJI”), has agreed to acquire certain assets of The Bank of New York Mellon’s ADR Index Business. Accordingly, effective Monday, April 1, 2019, S&P DJI will become the index provider for Invesco BRIC ETF’s Underlying Index and the Underlying Index will be renamed as follows:
Current Underlying Index Name | New Underlying Index Name | |
BNY Mellon BRIC Select DR Index | S&P/BNY Mellon BRIC Select DR Index (USD) |
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As a shareholder of Invesco BRIC ETF, you incur advisory fees and other Fund expenses. As a shareholder of the Invesco Raymond James SB-1 Equity ETF, you incur a unitary management fee. In addition to the unitary management fee, a shareholder of the Invesco Raymond James SB-1 Equity ETF may pay distribution fees, if any, brokerage expenses, taxes, interest, acquired fund fees and expenses, if any, litigation expenses 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 through thesix-month period ended February 28, 2019.
In addition to the fees and expenses which the Invesco Raymond James SB-1 Equity 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 Portfolio’s 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 theSix-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 Fund’s actual expense ratio and an assumed annualized rate of return of 5% per year before expenses, which is not the Fund’s 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, if these transaction costs and indirect expenses were included, your costs would have been higher.
Beginning Account Value September 1, 2018 | Ending Account Value February 28, 2019 | Annualized Expense Ratio Based on the Six-Month Period | Expenses Paid During the Six-Month Period(1) | |||||||||||||
Invesco BRIC ETF (EEB) | ||||||||||||||||
Actual | $ | 1,000.00 | $ | 1,051.95 | 0.64 | % | $ | 3.26 | ||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.62 | 0.64 | 3.21 | ||||||||||||
Invesco Raymond James SB-1 Equity ETF (RYJ) | ||||||||||||||||
Actual | 1,000.00 | 899.40 | 0.75 | 3.53 | ||||||||||||
Hypothetical (5% return before expenses) | 1,000.00 | 1,021.08 | 0.75 | 3.76 |
(1) | Expenses are calculated using the annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for thesix-month period ended February 28, 2019. Expenses are calculated by multiplying the Fund’s annualized expense ratio by the average account value for the period, then multiplying the result by 181/365. |
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Proxy Voting Policies and Procedures
A description of the Trust’s 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 Commission’s (“Commission”) website atwww.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 also available, without charge and upon request, by (i) calling(800) 983-0903; or (ii) accessing the Trust’sForm N-PX on the Commission’s website atwww.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 onForm N-Q (or any successor Form). The Trust’sForms N-Q (or any successor Form) are available on the Commission’s website atwww.sec.gov.
Frequency Distribution of Discounts and Premiums
A table showing the number of days the market price of each Fund’s shares was greater than the Fund’s net asset value, and the number of days it was less than the Fund’s 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 Fund’s website atwww.invesco.com/ETFs.
©2019 Invesco Capital Management LLC 3500 Lacey Road, Suite 700 Downers Grove, IL 60515 | P-TRST1-SAR-4 | 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.
PricewaterhouseCoopers LLP (“PwC”) informed the Audit Committee of the Board (the “Audit Committee”) that it has identified an issue related to its independence under Rule2-01(c)(1)(ii)(A) of RegulationS-X (referred to as the “Loan Rule”). The Loan Rule prohibits accounting firms, such as PwC, from being deemed independent if they have certain financial relationships with their audit clients or certain affiliates of those clients. The Registrant is required under various securities laws to have its financial statements audited by an independent accounting firm.
The Loan Rule specifically provides that an accounting firm would not be independent if it receives a loan from a lender that is a record or beneficial owner of more than ten percent of an audit client’s equity securities. For purposes of the Loan Rule, audit clients include the Registrant as well as all registered investment companies advised by the Adviser and its affiliates, including other subsidiaries of the Adviser’s parent company, Invesco Ltd. (collectively, the “Invesco Fund Complex”). PwC informed the Audit Committee it has relationships with lenders who hold, as record owner, more than ten percent of the shares of certain funds within the Invesco Fund Complex. These relationships call into question PwC’s independence under the Loan Rule with respect to those funds, as well as all other funds in the Invesco Fund Complex.
On June 20, 2016, the SEC Staff issued a“no-action” letter to another mutual fund complex (see Fidelity Management & Research Company et al.,No-Action Letter) related to the audit independence issue described above. In that letter, the SEC confirmed that it would not recommend enforcement action against a fund that relied on audit services performed by an audit firm that was not in compliance with the Loan Rule in certain specified circumstances. On May 2, 2018, the SEC proposed amendments to the Loan Rule that, if adopted as proposed, would address many of the issues that led to the issuance of theno-action letter.
In an August 18, 2016 letter, and in subsequent communications, PwC affirmed to the Audit Committee that, as of the date of the letter and the subsequent communications, respectively, PwC is an independent accountant with respect to the Registrant within the meaning of PCAOB Rule 3520. In its letter and in its subsequent communications , PwC also informed the Audit Committee that, after evaluating the facts and circumstances and the applicable independence rules, PwC has concluded that with regard to its compliance with the independence criteria set forth in the rules and regulations of the SEC related to the Loan Rule, it believes that it remains objective and impartial despite matters that may ultimately be
determined to be inconsistent with these criteria and therefore it can continue to serve as the Registrant’s registered public accounting firm. PwC has advised the Audit Committee that this conclusion is based in part on the following considerations: (1) the lenders to PwC have no influence over any fund, or other entity within the Invesco Fund Complex, or its investment adviser; (2) none of the officers or trustees of the Invesco Fund Complex whose shares are owned by PwC lenders are associated with those lenders; (3) PwC understands that the shares held by PwC lenders are held for the benefit of and on behalf of its policy owners/end investors; (4) investments in funds such as the Invesco Fund Complex funds are passive; (5) the PwC lenders are part of various syndicates of unrelated lenders; (6) there have been no changes to the loans in question since the origination of each respective note; (7) the debts are in good standing and no lender has the right to take action against PwC, as borrower, in connection with the financings; (8) the debt balances with each lender are immaterial to PwC and to each lender; and (9) the PwC audit engagement team has no involvement in PwC’s treasury function and PwC’s treasury function has no oversight of or ability to influence the PwC audit engagement team. In addition, PwC has communicated that the lending relationships appear to be consistent with the lending relationships described in theno-action letter and that they are not aware of other relationships that would be implicated by the Loan Rule. In addition to relying on PwC’s August 18, 2016 letter and subsequent communications regarding its independence, the Registrant intends to rely upon theno-action letter.
If in the future the independence of PwC is called into question under the Loan Rule by circumstances that are not addressed in the SEC’sno-action letter, the Registrant may need to take other action in order for the Registrant’s filings with the SEC containing financial statements to be deemed compliant with applicable securities laws. Such additional actions could result in additional costs, impair the ability of the Registrant to issue new shares or have other material adverse effects on the Registrant. The SECno-action relief was initially set to expire 18 months from issuance, but has been extended by the SEC without an expiration date, except that theno-action letter will be withdrawn upon the effectiveness of any amendments to the Loan Rule designed to address the concerns expressed in the letter.
PwC advised the Registrant’s Audit Committee that PwC had identified additional two matters for consideration under the SEC’s auditor independence rules. PwC stated that a PwC Manager and a PwC Senior Manager each held financial interests in investment companies within the Invesco Fund Complex that were inconsistent with the requirements ofRule 2-01(c)(1) of RegulationS-X.
PwC advised the Audit Committee that it believes its objectivity and impartiality had not been adversely affected by these matters as they related to the audit of the Registrant. In reaching this conclusion, PwC noted, among other things, that during the time of its audit, the engagement team was not aware of the investments, neither individual was in the chain of command of the audit or the audit partners of Invesco or the Registrant, the services each individual provided were not relied upon by the audit engagement team with respect to the audit of the Registrant and the investments were not material to the net worth of either individual or their immediate family members.
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 FormN-CSR. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures forClosed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers ofClosed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities byClosed-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 Registrant’s disclosure controls and procedures (as defined in Rule30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report, the Registrant’s 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 Registrant’s internal control over financial reporting (as defined in Rule30a-3(d) under the Investment Company Act of 1940) that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12. | Disclosure of Securities Lending Activities forClosed-End Management |
Investment Companies.
Not applicable.
Item 13. Exhibits.
(a)(1) | Not applicable. | |
(a)(2) | Certifications of the Registrant’s President and Treasurer pursuant to Rule30a-2(a) under the Investment Company Act of 1940 and Section 302 of the Sarbanes-Oxley Act of 2002 are attached as Exhibit 99.CERT. | |
(a)(3) | Not applicable. | |
(a)(4) | Not applicable. | |
(b) | Certifications of the Registrant’s President and Treasurer pursuant to Rule30a-2(b) under the Investment Company Act of 1940 and Section 906 of the Sarbanes-Oxley Act of 2002 are attached as Exhibit 99.906CERT. |
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
By: /s/ Daniel E. Draper |
Name: | Daniel E. Draper | |
Title: | President | |
Date: | 5/6/2019 |
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/ Daniel E. Draper |
Name: | Daniel E. Draper | |
Title: | President | |
Date: | 5/6/2019 |
By: | /s/ Kelli Gallegos |
Name: | Kelli Gallegos | |
Title: | Treasurer | |
Date: | 5/6/2019 |