Invesco USD High Yield Corporate Bond ESG UCITS ETF Dist

Investment Risks

For complete information on risks, refer to the legal documents. The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested. The creditworthiness of the debt the Fund is exposed to may weaken and result in fluctuations in the value of the Fund. There is no guarantee the issuers of debt will repay the interest and capital on the redemption date. The risk is higher when the Fund is exposed to high yield debt securities. Changes in interest rates will result in fluctuations in the value of the fund. This fund may hold a significant amount of debt instruments which are of lower credit quality. This may result in large fluctuations of the value of the ETF as well as impacting its liquidity under certain circumstances. The Fund intends to invest in securities of issuers that manage their ESG exposures better relative to their peers. This may affect the Fund’s exposure to certain issuers and cause the Fund to forego certain investment opportunities. The Fund may perform differently to other funds, including underperforming other funds that do not seek to invest in securities of issuers based on their ESG ratings.

Product description

The Invesco USD High Yield Corporate Bond ESG UCITS ETF Dist aims to provide the total return performance of the Bloomberg MSCI USD High Yield Liquid Corporate ESG Weighted SRI Bond Index (the “Reference Index”), less the impact of fees. The fund distributes dividends on a quarterly basis.

The Reference Index aims to reflect the performance of USD-denominated high yield, fixed-rate securities issued by corporate issuers adjusted based upon certain environmental, social and governance (“ESG”) metrics, which seek to increase overall exposure to those issuers demonstrating a robust ESG profile.

Securities are excluded that according to the index provider’s exclusionary criteria: 1) have an MSCI ESG rating below BB; 2) are issued by an issuer that does not have an MSCI ESG rating; 3) have faced very severe controversies pertaining to ESG issues (including UN Global Compact violations) over the last three years; 4) are issued by an issuer that does not have an MSCI ESG Controversy Score; 5) are involved in alcohol, adult entertainment, controversial weapons, conventional weapons, fossil fuels, gambling, genetically modified organisms, firearms, nuclear weapons, nuclear power, oil sands, thermal coal, tobacco, unconventional oil and gas; or 6) are issued by emerging market issuers.

Each of the eligible component securities is then assigned an ESG score using MSCI ESG metrics. This ESG Score is then applied to re-weight the eligible securities from their natural weights as a result of the notional size of the bond, to construct the weighting of the Reference Index. Issuers are capped at 5% of the market value of the Reference Index. The Reference Index rebalances monthly.

The portfolio managers aim to achieve the fund’s objective by using portfolio modelling tools and techniques to buy and hold a proportion of the securities that represents the characteristics of the entire Reference Index. The objective of this sampling method is to replicate the Reference Index performance as closely as possible while reducing the costs that would normally be incurred with full replication.

This ETF is passively managed.