Prospectus
Invesco
India Exchange-Traded Fund Trust
|
IMVP |
Invesco
India ETF |
NYSE
Arca, Inc. |
The
U.S. Securities and Exchange Commission (“SEC”) has not approved or disapproved
these securities or passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal
offense.
The Invesco
India ETF (the “Fund”) seeks to track the investment results (before fees
and expenses) of the Bloomberg India MVP Index (the “Underlying
Index”).
This table
describes the fees and expenses that you may pay if you buy, hold, and sell
shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and example
below.
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Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the
value
of your investment) | |
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Management
Fees |
% |
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Other
Expenses |
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Total
Annual Fund Operating Expenses |
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The example
assumes that you invest $10,000 in the Fund for the time periods indicated and
then sell all of your Shares at the end of those periods. The example also
assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same. This example does not include brokerage
commissions that investors may pay to buy and sell Shares. Although your actual
costs may be higher or lower, your costs, based on these assumptions, would
be:
|
1
Year |
3
Years |
5
Years |
10
Years |
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$ |
$ |
$ |
$ |
The Fund
generally will invest at least 90% of its total assets in securities that
comprise the Underlying Index, as well as American depositary receipts (“ADRs”)
and global depositary receipts (“GDRs”) that represent securities in the
Underlying Index.
Strictly
in accordance
with its guidelines and mandated procedures, Bloomberg Index Services Limited
(the “Index Provider”) compiles,
maintains and
calculates the Underlying Index, which is comprised of securities of large- and
mid-capitalization companies based in India that exhibit strong fundamental
characteristics for momentum (M), value (V), volatility (V) and profitability
(P), utilizing a factor model developed by Bloomberg Intelligence (an affiliate
of the Index Provider). The Index Provider aims to select the top 15% of
securities in the eligible universe with the strongest momentum, most muted
volatility, inexpensive valuations, and highest profitability.
To
be eligible for inclusion in the Underlying Index, a security must have a
minimum market capitalization of $500 million. In addition, a security must be a
member of the Bloomberg India universe of securities, which generally includes
securities of companies domiciled in India, as such universe is determined by
the Index Provider in connection with the index methodology. Each security in
the eligible universe is then measured by momentum, value, volatility, and
profitability factors, as follows:
■
Momentum –
Securities are measured by both six- and 12-month price Momentum, based on the
total return over the previous six (and 12) months. A higher value indicates a
better Momentum measure.
■
Value –
Securities are measured by EBITDA to Price and Revenue to Price ratios, using
trailing 12-month values for both EBITDA and Revenue. A higher value indicates a
better Value measure.
■
Volatility –
Securities are measured by six-month and 12-month price volatility. A lower
value indicates a better Volatility measure.
■
Profitability
– Securities are measured by both Return on Invested Capital and Return on
Equity. A higher value indicates a better Profitability measure.
Securities
are then grouped by Bloomberg Industry Classification System (BICS)
sector classification. Within each BICS sector, securities are ranked by each
MVP factor, with the highest (or lowest, in the case of volatility) value
receiving a score of 100. An aggregated “MVP Score” is then calculated for each
security by taking the average of each factor score. Securities from each BICS
sector with MVP Scores greater than 85 are included in the Underlying
Index.
The
Underlying Index constituents are equally weighted.
As
of December 31,
2025, the Underlying Index was comprised of 33
constituents
that ranged in market capitalization from $577
billion to
$12.7
trillion.
The
Fund employs a “full replication” methodology in seeking to track the
Underlying Index, meaning that the Fund generally invests in all of the
securities comprising the Underlying Index in proportion to their weightings in
the Underlying Index.
The
Fund is “non-diversified” and therefore is not required to meet certain
diversification requirements under the Investment Company Act of 1940, as
amended (the “1940 Act”).
Principal
Risks of Investing in the Fund
The following
summarizes the principal risks of investing in the Fund.
Market
Risk. Securities
in the Underlying Index are subject to market fluctuations. You should
anticipate that the value of the Shares will decline, more or less, in
correlation with any decline in value of the securities in the Underlying Index.
Additionally, natural or environmental disasters, widespread disease or other
public health issues, war, military conflicts, acts of terrorism, economic
crises or other events could result in increased premiums or discounts to the
Fund’s net asset value (“NAV”). Certain changes in the U.S. economy in
particular, such as when the U.S. economy weakens or when its financial markets
decline, may have a material adverse effect on global financial markets as a
whole, and on the securities to which the Underlying Index has exposure.
Increasingly strained relations between the U.S. and foreign countries,
including as a result of economic sanctions and tariffs, may also adversely
affect U.S. issuers, as well as non-U.S. issuers.
During
a general downturn in the financial markets, multiple asset classes may
decline in value. When markets perform well, there can be no assurance that
specific investments held by the Underlying Index will rise in
value.
Index
Risk. Unlike many
investment companies, the Fund does not utilize an investing strategy that seeks
returns in excess of its Underlying Index. Therefore, the Fund would not
necessarily buy or sell a security unless that security is added to or removed
from, respectively, its Underlying
1
Index, even
if that security generally is underperforming. Additionally, the Fund generally
rebalances its portfolio in accordance with its Underlying Index, and,
therefore, any changes to its Underlying Index’s rebalance schedule will
typically result in corresponding changes to the Fund’s rebalance
schedule.
Indian
Securities Risk. Investment
in Indian securities involves risks in addition to those associated with
investments in securities of issuers in more developed countries, which may
adversely affect the value of the Fund’s assets. Such heightened risks include,
among others, political and legal uncertainty, greater government control over
the economy, currency fluctuations or blockage and the risk of nationalization
or expropriation of assets. In addition, religious and border disputes persist
in India. Moreover, India has experienced civil unrest and hostilities with
neighboring countries, including Pakistan, and the Indian government has
confronted separatist movements in several Indian states. Additionally, a
natural or other disaster could occur in India that could affect the Indian
economy, causing an adverse impact on the Fund.
The
securities market of India is considered an emerging market that is characterized
by a small number of listed companies that have significantly smaller market
capitalizations, greater price volatility and substantially less liquidity than
companies in more developed markets. These factors, coupled with restrictions on
foreign investment and other factors, limit the supply of securities available
for investment. This will affect the rate at which the Fund is able to invest in
securities of Indian companies, the purchase and sale prices for such
securities, and the timing of purchases and sales. Certain restrictions on
foreign investment may decrease the liquidity of the Fund’s portfolio, subject
the Fund to higher transaction costs, or inhibit the Fund’s ability to track the
Underlying Index. The Fund’s investments in securities of issuers located or
operating in India, as well as its ability to track the Underlying Index, also
may be limited or prevented, at times, due to the limits on foreign ownership
imposed by the Reserve Bank of India (“RBI”) and/or by the Securities and
Exchange Board of India (“SEBI”).
Emerging
Markets Investment Risk. 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. Companies in emerging
market countries generally may be subject to less stringent regulatory,
disclosure, financial reporting, accounting, auditing and recordkeeping
standards than companies in more developed countries. In addition, information
about such companies may be less available and reliable. Emerging markets
usually are subject to greater market volatility, political, social 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, and the ability to bring and enforce
actions, or to obtain information needed to pursue or enforce such actions, may
be limited. 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. Investments in emerging market securities may be
subject to additional transaction costs, delays in settlement procedures,
unexpected market closures, and lack of timely information. In addition, lack of
relevant data and reliable public information, including financial information,
about securities in emerging markets may contribute to incorrect weightings and
data and computational errors when the Index Provider selects securities for
inclusion in the Underlying Index or rebalances the Underlying
Index.
Foreign
Investment Risk. 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, including recordkeeping standards, comparable to those applicable to
domestic issuers. Foreign securities also are subject to the risks of possible
seizure, expropriation, nationalization, political or social instability,
changes in economic or taxation policies or other adverse political or economic
developments (in which the Fund could lose its entire investment in a certain
market) and the difficulty of enforcing obligations in other countries,
including the possible adoption of foreign governmental restrictions such as
exchange controls. Investments in foreign securities also may be subject to
dividend withholding or confiscatory taxes, currency blockage and/or transfer
restrictions and higher transactional costs. To the extent the Fund invests in
securities denominated in foreign currencies, fluctuations in the value of the
U.S. dollar relative to the values of other currencies may adversely affect
investments in foreign securities and may negatively impact the Fund’s returns.
Foreign companies generally may be subject to less stringent regulations than
U.S. companies, including financial reporting requirements and auditing and
accounting controls, and may therefore be more susceptible to fraud or
corruption. There may be less public information available about foreign
companies than U.S. companies, making it difficult to evaluate those foreign
companies.
From
time to time, certain companies in which the Fund invests may operate in,
or have dealings with, countries subject to sanctions or embargoes imposed by
the U.S. government and the United Nations and/or in countries the U.S.
government identified as state sponsors of terrorism. One or more of these
companies may be subject to constraints under U.S. law or regulations that could
negatively affect the company’s performance. Additionally, one or more of these
companies could suffer damage to its reputation if the market identifies it as a
company that invests or deals with countries that the U.S. government identifies
as state sponsors of terrorism or is subject to
sanctions.
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 the Fund
holds. In addition, equity risk includes the risk that investor sentiment toward
one or more industries will become negative, resulting in those investors
exiting their investments in those industries, which could cause a reduction in
the value of companies in those industries more broadly. Equity risk also
includes the risk of large-capitalization companies, which may adapt more slowly
to new competitive challenges or may be more mature and subject to more limited
growth potential, and consequently may underperform other segments of the equity
market or the market as a whole. 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.
Multifactor
Investing Risk. The
Underlying Index seeks to emphasize certain factor exposures to securities
within the eligible index universe, in accordance with the Underlying Index's
methodology. There is no assurance that targeting exposure to such factors will
enhance the Underlying Index's or the Fund’s performance over time, and
targeting exposure to certain factors may detract from performance in some
market environments. There is also no guarantee the Underlying Index will
achieve the specific factor exposures.
2
Momentum
Investing Risk. The momentum
style of investing is subject to the risk that the securities may be more
volatile than the market as a whole, or that the returns on securities that
previously have exhibited price momentum are less than the returns on other
styles of investing. Momentum can turn quickly, and stocks that previously have
exhibited high momentum may not experience continued positive momentum. In
addition, there may be periods when the momentum style of investing is out of
favor and therefore, the investment performance of the Fund may
suffer.
Value
Investing Risk. Value
investing entails the risk that if the market does not recognize that a selected
security is undervalued, the price of that security might not appreciate as
anticipated. Value securities are subject to the risk that their valuations
never improve or that the returns on value securities are lower than returns on
other styles of investing or the overall stock market. Thus, the value of the
Fund’s investments will vary and, at times, may be lower than that of other
types of investments. Value investing has gone in and out of favor during past
market cycles and when value investing is out of favor or when markets are
unstable, value securities may underperform growth securities or the overall
stock market.
Quality
Investing Risk. The quality
style of investing focuses on securities that have low price volatility and that
have high profitability (i.e., high returns on uninvested capital and high
returns on equity) over time. This style of investing is subject to the risk
that securities that have previously been identified with quality
characteristics may not continue to be quality companies and that the returns of
such securities may be less than returns on other styles of investing or the
overall stock market.
Non-Diversified
Fund Risk.
The Fund is
non-diversified and can invest a greater portion of its assets in the
obligations or securities of a small number of issuers or any single issuer than
a diversified fund can. 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 the Fund's volatility and cause the
performance of a relatively small number of issuers to have a greater impact on
the Fund's performance.
ADR
and GDR Risk. ADRs are
certificates that evidence ownership of shares of a foreign issuer and are
alternatives to purchasing the underlying foreign securities directly in their
national markets and currencies. GDRs are certificates issued by an
international bank that generally are traded and denominated in the currencies
of countries other than the home country of the issuer of the underlying shares.
ADRs and GDRs may be subject to certain of the risks associated with direct
investments in the securities of foreign companies, such as currency, political,
economic and market risks, because their values depend on the performance of the
non-dollar denominated underlying foreign securities. Moreover, ADRs and GDRs
may not track the price of the underlying foreign securities on which they are
based, and their value may change materially at times when U.S. markets are not
open for trading.
Industry
Concentration Risk. In following
its methodology, the 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 the Underlying Index concentrates in the
securities of issuers in a particular industry or industry group, the Fund will
also concentrate its investments to approximately the same extent. By
concentrating its investments in an industry or industry group, the Fund may
face more risks than if it were diversified broadly over numerous industries or
industry groups. Such industry-based risks, any of which may adversely affect
the companies in which the Fund invests, may include, but are not limited to,
the following: general economic conditions or cyclical market patterns that
could negatively affect supply and demand in a particular industry; competition
for resources; adverse labor relations; political or world events; obsolescence
of technologies; and increased competition or new product introductions that may
affect the profitability or viability of companies in an industry. In addition,
at times, such industry or industry group may be out of favor and underperform
other industries or the market as a whole.
Currency
Risk.
Substantially all of the income that the Fund receives from investments in
equity securities is in Indian rupees; however, the Fund will compute and
distribute its income in U.S. dollars, and the computation of income will be
made on the date that the Fund earns the income at the foreign exchange rate in
effect on that date. Therefore, if the value of the Indian rupee falls relative
to the U.S. dollar between the earning of the income and the time at which the
Fund converts the rupees to U.S. dollars, the Fund may be required to liquidate
securities to make distributions if it has insufficient cash in U.S. dollars to
meet distribution requirements. Moreover, the Fund may incur costs in connection
with conversions between U.S. dollars and rupees. Because the Fund’s NAV is
determined in U.S. dollars, the Fund’s NAV could decline if the Indian rupee
depreciates against the U.S. dollar, even if the value of its holdings, measured
in rupees, increases.
Mid-Capitalization
Companies Risk. Investing in
securities of mid-capitalization companies typically involves greater risk than
is associated with investing in securities of larger, more established
companies. Mid-capitalization companies’ securities may be more volatile and
less liquid than those of larger, more established companies and may have
returns that vary, sometimes significantly, from the overall securities market.
Mid-capitalization companies may have less experienced management, more limited
product and market diversification, and fewer financial resources compared to
larger capitalization companies. Often mid-capitalization companies and the
industries in which they focus are still evolving and, as a result, they may be
more sensitive to changing market
conditions.
Regulatory
Risk. The Fund is
registered as a foreign portfolio investor (“FPI”) with SEBI in order to have
the ability to make and dispose of investments in Indian securities. There can
be no assurance that the Fund will qualify or continue to qualify as an FPI
under the SEBI (FPI) Regulations, 2019, (“FPI Regulations”) or that the Indian
regulatory authorities will continue to grant such registrations, and the loss
of such registrations could adversely impact the ability of the Fund to make and
dispose of investments in India. Investments by FPIs in Indian securities are
also subject to certain limits, disclosure requirements and restrictions under
applicable law, and the application of such limits and restrictions could
adversely impact the ability of the Fund to make investments in
India.
Tax
Risk. The Fund
intends to elect to “pass-through” to the Fund’s shareholders—as a deduction or
credit—the amount of foreign taxes paid by the Fund. The taxes passed-through to
shareholders are included in each shareholder’s income. Certain shareholders,
including some non-U.S. shareholders, are not entitled to the benefit of a
deduction or credit with respect to foreign taxes paid by the Fund. Other
foreign taxes, such as transfer taxes, may be imposed on the Fund, but would not
give rise to a credit or be eligible to be passed through to
shareholders.
Indian
tax law provides for certain provisions (“Indirect Transfer Provisions”)
for the levy of capital gains tax on income arising through the transfer of
shares in a company organized outside of India that derives, directly or
indirectly, its value substantially from assets located in India, subject to
certain exceptions. India has clarified that dividends declared and paid by a
foreign company in respect of shares which derive their value substantially from
assets situated in India would not be taxable in India by virtue of the Indirect
Transfer Provisions.
The
transfer of the Shares could be taxable in India if Shares derive their value,
directly or indirectly, substantially from assets located in India. In a case
where all the assets owned by the Fund are not located in India, the taxation of
gains will be on a proportional basis to be determined as per prescribed
rules.
Issuer-Specific
Changes Risk.
The
performance of the Fund depends on the performance of individual securities to
which the Fund has exposure. The value of an individual security or particular
type of security may be more volatile than the market as a whole and may perform
worse than the market as a whole, causing the value of the Fund’s securities to
decline.
3
Valuation
Risk.
The price the
Fund could receive upon the sale of a portfolio investment may differ from the
Fund’s valuation of the investment, particularly for investments that trade in
thin or volatile markets or that are valued using a fair valuation methodology.
Financial information related to securities of non-U.S. issuers may be less
reliable than information related to securities of U.S. issuers, which may make
it difficult to obtain a current price for a non-U.S. security held by the Fund.
When market quotations are not readily available for Fund investments, those
investments are fair valued by the Adviser. There are multiple methods that can
be used to fair value a portfolio investment and such methods may involve more
subjectivity than the use of market quotations. The value established for an
investment through fair valuation may be different from what would be produced
if the investment had been valued using market quotations. In addition, there is
no assurance that the Fund could sell a portfolio investment at any time for the
value ascribed to it for purposes of calculating the Fund’s net asset value, and
it is possible that the Fund could incur a loss because an investment is sold at
a discount to its ascribed value. The ability to value investments may also be
impacted by technological issues and/or errors by pricing services or other
third-party service providers.
Valuation
Time Risk. Because
foreign exchanges may be open on days when the Fund does not price its Shares,
the value of the non-U.S. securities in the Fund’s portfolio may change on days
when investors will not be able to purchase or sell the Fund’s Shares. As a
result, trading spreads and the resulting premium or discount on the Fund’s
Shares may widen, and, therefore, increase the difference between the market
price of the Fund’s Shares and the NAV of such
Shares.
Cash
Transaction Risk.
Most
exchange-traded funds (“ETFs”) generally make in-kind redemptions to avoid being
taxed at the fund level on gains on the distributed portfolio securities.
However, unlike most ETFs, the Fund currently intends to effect redemptions for
cash, rather than in-kind, because of the nature of the Fund’s investments. As
such, the Fund may be required to sell portfolio securities to obtain the cash
needed to distribute redemption proceeds. Therefore, the Fund may recognize a
capital gain and/or incur brokerage costs on these sales that might not have
been incurred if the Fund had made a redemption in-kind, which may decrease the
tax efficiency of the Fund compared to ETFs that utilize an in-kind redemption
process, and there may be a substantial difference in the after-tax rate of
return between the Fund and conventional ETFs. Also, to the extent any
transaction costs are not offset by transaction fees imposed on APs, such costs
will decrease the Fund’s NAV.
Portfolio
Turnover Risk.
The Fund may
engage in frequent trading of its portfolio securities in connection with the
rebalancing or adjustment of the Underlying Index. A portfolio turnover rate of
200%, for example, is equivalent to the Fund buying and selling all of its
securities two times during the course of a year. A high portfolio turnover rate
(such as 100% or more) could result in high brokerage costs for the Fund. While
a high portfolio turnover rate can result in an increase in taxable capital
gains distributions to the Fund’s shareholders, the Fund will seek to utilize
the in-kind creation and redemption mechanism (described below) to minimize the
realization of capital gains to the extent
possible.
Non-Correlation
Risk. The Fund's
return may not match the return of the Underlying Index for a number of reasons.
For example, the Fund incurs operating expenses not applicable to the Underlying
Index, and incurs costs in buying and selling securities, especially when
rebalancing the Fund's securities holdings to reflect changes in the Underlying
Index. Because the Fund currently issues and redeems Creation Units principally
for cash, it will incur higher costs in buying and selling securities than if it
issued and redeemed Creation Units principally in-kind. In addition, the
performance of the Fund and the Underlying Index may vary due to asset valuation
differences and differences between the Fund's portfolio and the Underlying
Index resulting from legal restrictions, costs or liquidity
constraints.
Authorized
Participant Concentration Risk.
Only
authorized participants (“APs”) may engage in creation or redemption
transactions
directly with
the Fund. The Fund has a limited number of institutions that may act as APs and
such APs have no obligation to submit creation or redemption orders.
Consequently, there is no assurance that APs will establish or maintain an
active trading market for the Shares. This risk may be heightened to the extent
that securities held by the 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 the Fund and no other AP is able to step forward to
create or redeem Creation Units (as defined below), this may result in a
significantly diminished trading market for Shares, and Shares may be more
likely to trade at a premium or discount to the Fund's NAV and to face trading
halts and/or delisting. Additionally, to the extent that the Fund holds non-U.S.
securities, such securities may have lower trading volumes or could experience
extended market closures or trading halts. To the extent that the Fund invests
in non-U.S. securities, it may face increased risks that APs may not be able to
effectively create or redeem Creation Units, or that the Shares may be halted
and/or delisted.
Market
Trading Risk.
The Fund
faces numerous market trading risks, including the potential lack of an active
market for the Shares, losses from trading in secondary markets, periods of high
volatility, and disruption in the creation/redemption process of the Fund. In
stressed market conditions, the market for Shares may become less liquid in
response to deteriorating liquidity in the markets for the Fund’s portfolio
holdings, which may cause a variance in the market price of Shares and their
underlying NAV. In addition, an exchange or market may issue trading halts on
specific securities or financial instruments. As a result, the ability to trade
certain securities or financial instruments may be restricted, which may disrupt
the Fund’s creation/redemption process, potentially affect the price at which
Shares trade in the secondary market, and/or result in the Fund being unable to
trade certain securities or financial instruments at all. In these
circumstances, the Fund may be unable to rebalance its portfolio, may be unable
to accurately price its investments and/or may incur substantial trading losses.
Any of these factors may lead to the Shares trading at a premium or discount to
the Fund's NAV.
Operational
Risk. The Fund is
exposed to operational risks arising from a number of factors, including, but
not limited to, human error, processing and communication errors, errors of the
Fund’s service providers, counterparties or other third-parties, failed or
inadequate processes and technology or systems failures. The Fund and its
investment adviser, Invesco Capital Management LLC (the “Adviser”), seek to
reduce these operational risks through controls and procedures. However, these
measures do not address every possible risk and may be inadequate to address
these risks.
Shares
May Trade at Prices Different than NAV.
Shares trade
on a stock exchange at prices at, above or below the Fund’s most recent NAV. The
Fund’s NAV is calculated at the end of each business day and fluctuates with
changes in the market value of the Fund’s holdings. The trading price of the
Shares fluctuates continuously throughout trading hours on the exchange, based
on both the relative market supply of, and demand for, the Shares and the
underlying value of the Fund’s portfolio holdings. As a result, the trading
prices of the Shares may deviate from the Fund’s NAV. ANY OF THESE FACTORS,
AMONG OTHERS, MAY LEAD TO THE SHARES TRADING AT A PREMIUM OR DISCOUNT TO
NAV.
The bar chart
below shows how the Fund has performed. The table below the bar chart shows the
Fund’s average annual total returns (before and after taxes). The
bar chart and table provide an indication of the risks of investing in the Fund
by showing how the Fund’s total returns have varied from year to year and by
showing how the Fund’s average annual total returns compared with a broad
measure of market performance and
4
Updated
performance information is available online at www.invesco.com/ETFs .
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Period
Ended |
Returns |
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Average Annual Total Returns (for the periods ended December 31, 2025)
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Inception
Date |
1
Year |
5
Years |
10
Years |
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Return
Before Taxes |
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% |
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Return
After Taxes on Distributions |
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Return
After Taxes on Distributions and Sale of
Fund
Shares |
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Bloomberg
India MVP Index1 |
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FTSE
India Quality and Yield Select Index
(Net) withholding taxes,
but reflects no deduction |
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Blended
- FTSE India Quality and Yield Select
Index3 |
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MSCI
India Index (Net) (reflects reinvested
dividends
net of withholding taxes, but
reflects
no deduction for fees, expenses or
other
taxes) |
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1
Effective
after the close of markets on February 20, 2026, the Fund changed its
underlying index from FTSE India Quality and Yield Select Index to
Bloomberg India MVP Index. Prior to its commencement date of December
16,
2025,
performance for the Underlying Index is not available. If the Fund had sought to
track the Underlying Index prior to the close of markets on February 20, 2026,
the Fund’s performance would have been different.
2Performance information is not available for
periods prior to the FTSE India Quality and Yield Select Index's commencement
date of March 18, 2019.
3The Blended -
FTSE India Quality and Yield Select Index reflects the performance of
the Indus India Index (reflects no deduction for fees, expenses or taxes),
the Fund’s previous underlying index, prior to June 22, 2019, and the FTSE
India Quality and Yield Select Index (Net) (reflects reinvested dividends
net of withholding taxes, but reflects no deduction for fees, expenses or
other taxes)
thereafter.
2
3
Management
of the Fund
Investment
Adviser. Invesco
Capital Management LLC (the “Adviser”).
Portfolio
Managers
The following
individuals are responsible jointly and primarily for the day-to-day management
of the Fund’s portfolio:
|
Name |
Title
with Adviser/Trust |
Date
Began
Managing
the
Fund |
|
Peter
Hubbard |
Portfolio
Manager of the Adviser; Vice
President of
the Trust |
March
2008 |
|
| ||
|
Pratik
Doshi, CFA |
Portfolio
Manager of the Adviser |
February
2020 |
|
| ||
|
Michael
Jeanette |
Portfolio
Manager of the Adviser |
February
2015 |
|
| ||
|
Tony
Seisser |
Portfolio
Manager of the Adviser |
February
2015 |
|
| ||
Purchase
and Sale of Shares
The Fund
issues and redeems Shares at NAV only with APs and only in large blocks of
10,000 Shares (each block of Shares is called a “Creation Unit”) or multiples
thereof (“Creation Unit Aggregations”), generally in exchange for the deposit or
delivery of cash. However, the Fund also reserves the right to permit or require
Creation Units to be issued in exchange for a basket of securities. Except when
aggregated in Creation Units, the Shares are not redeemable securities of the
Fund.
Individual
Shares may only be bought and sold in the secondary market (i.e., on a
national securities exchange) through a broker or dealer at a market price.
Because the Shares trade at market prices rather than NAV, Shares may trade at a
price greater than NAV (at a premium), at NAV, or less than NAV (at a discount).
An investor may incur costs attributable to the difference between the highest
price a buyer is willing to pay to purchase Shares (bid) and the lowest price a
seller is willing to accept for Shares (ask) when buying or selling Shares in
the secondary market (the “bid-ask spread”).
Recent
information, including information on the Fund’s NAV, market price,
premiums and discounts, and bid-ask spreads, is available online at
www.invesco.com/ETFs.
Tax
Information
The Fund’s
distributions generally are taxed as ordinary income, capital gains or some
combination of both, unless you are investing through a tax-advantaged
arrangement, such as a 401(k) plan or an individual retirement account, in which
case your distributions may be taxed as ordinary income when withdrawn from such
account.
Payments
to Broker-Dealers and Other Financial Intermediaries
If you
purchase Shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund’s distributor or its related companies
may pay the intermediary for certain Fund-related activities, including those
that are designed to make the intermediary more knowledgeable about
exchange-traded products, such as the Fund, as well as for marketing, education
or other initiatives related to the sale or promotion of Shares. These payments
may create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson or financial adviser to recommend the Fund
over another investment. Ask your salesperson or financial adviser or visit your
financial intermediary’s website for more information.
Additional Information About the Fund’s Strategies and Risks
Principal
Investment Strategies
The Fund's
investment objective is to seek to track the investment results
(before fees
and expenses) of the Underlying Index. The Fund generally will invest at least
90% of its total assets in securities that comprise the Underlying Index, as
well as ADRs and GDRs that represent the securities in the Underlying Index. The
Fund operates as an index fund and is not actively managed, meaning that it does
not seek to outperform the Underlying Index. Rather the Fund seeks to generally
track the performance of the Underlying Index as closely as possible (i.e., it
seeks to obtain a high degree of correlation with the Underlying Index and to
minimize “tracking error”
5
between the
two). Tracking error means the variation between the Fund’s annual return and
the return of the Underlying Index. Because the Underlying Index is a financial
calculation based on a grouping of financial instruments, while the Fund is an
actual investment portfolio, the Fund may experience tracking error for a number
of reasons when tracking the performance of the Underlying Index. For example,
the Fund incurs operating expenses and transaction costs not applicable to the
Underlying Index. Moreover, as an index fund, the Fund does not take temporary
defensive positions during periods of adverse market, economic or other
conditions.
The
Fund employs a “full replication” methodology in seeking to track the
Underlying Index, meaning that it generally invests in all of the securities
comprising the Underlying Index in proportion to the weightings of the
securities in the Underlying Index. However, under various circumstances, it may
not be possible or practicable to purchase all of those securities in those same
weightings. In those circumstances, the Fund may purchase a sample of securities
in the Underlying Index.
A
“sampling” methodology means that the Adviser uses a quantitative analysis to
select securities from the Underlying Index universe to obtain a representative
sample of securities that have, in the aggregate, investment characteristics
similar to the Underlying Index, in terms of key risk factors, performance
attributes and other characteristics. These include industry weightings, market
capitalization, return variability, earnings valuation, yield and other
financial characteristics of securities. When employing a sampling methodology,
the Adviser bases the quantity of holdings in the Fund on a number of factors,
including asset size of the Fund, and generally expects the Fund to hold less
than the total number of securities in the Underlying Index. However, the
Adviser reserves the right to invest the Fund in as many securities as it
believes necessary to achieve the Fund’s investment objective. To the extent the
Fund uses a sampling strategy, it may have larger tracking error than if it used
a full replication strategy.
At
times, the Fund may utilize one or more additional investment techniques in
seeking to track the Underlying Index. Such techniques may include: (i)
overweighting or underweighting a component security in the Fund’s portfolio
compared to its weight in the Underlying Index, (ii) purchasing securities not
contained in the Underlying Index that the Adviser believes are appropriate to
substitute for certain securities in the Underlying Index, (iii) selling
securities included in the Underlying Index in anticipation of their removal
from the Underlying Index, or (iv) purchasing securities not included in the
Underlying Index in anticipation of their addition to the Underlying
Index.
Additional
information about the construction of the Fund’s Underlying Index is set
forth below.
Bloomberg
India MVP Index
The Index
Provider compiles and maintains the Underlying Index, which is comprised of
securities of large- and mid-capitalization companies based in India that
exhibit strong fundamental characteristics for momentum (M), value (V),
volatility (V) and profitability (P), utilizing a factor model developed by
Bloomberg Intelligence (an affiliate of the Index Provider).
To
be eligible for inclusion in the Underlying Index, a security must have a
minimum market capitalization of $500 million. In addition, a security must be a
member of the Bloomberg India universe of securities, which generally includes
securities of companies domiciled in India, as such universe is determined by
the Index Provider in connection with the index methodology. Every security in
this starting universe is then measured across momentum, value, volatility, and
profitability factors, as follows:
■
Momentum –
Securities are measured by both six- and 12-month price Momentum, based on the
total return over the previous six (and 12) months. A higher value indicates a
better Momentum measure.
■
Value –
Securities are measured by EBITDA to Price and Revenue to Price ratios, using
trailing 12-month values for both EBITDA and Revenue. A higher value indicates a
better Value measure.
■
Volatility –
Securities are measured by six-month and 12-month price volatility. A lower
value indicates a better Volatility measure.
■
Profitability
– Securities are measured by both Return on Invested Capital and Return on
Equity. A higher value indicates a better Profitability measure.
Securities
are then grouped by BICS sector classification. Within each BICS sector,
securities are ranked by each MVP factor, with the highest (or lowest, in the
case of volatility) value receiving a score of 100. An aggregated “MVP Score” is
then calculated for each security by taking the average of each factor score.
Securities from each BICS sector with MVP Scores greater than 85 are included in
the Underlying Index. If there are less than 25 securities selected based on
this process, then the next security with the highest MVP score is selected, and
the process is repeated until there are 25 securities in the Underlying
Index.
The
Underlying Index constituents are equally weighted. The Underlying Index is
rebalanced quarterly after market close on the third Friday of January, April,
July and October.
The Fund is
rebalanced in accordance with the Underlying Index.
The
RBI, the Indian counterpart of the Federal Reserve Bank in the United
States, imposes certain limits on the foreign ownership of Indian securities.
With effect from April 1, 2020, the aggregate ownership limit by all FPIs of the
total paid-up equity capital of Indian companies on a fully diluted basis is the
sectoral cap or such other permissible lower threshold limit as approved by the
Indian company. In addition to these aggregate ownership limits, the total
ownership of any single FPI and its investor group in the equity shares of an
Indian company must be less than 10% of the total paid-up equity capital on a
fully diluted basis or less than 10% of the paid-up value of each series of
debentures or preference shares or share warrants issued by the Indian company.
Holdings by FPIs forming part of the same investor group, as well as by offshore
derivative instruments (“ODI”) subscribers and / or depositary receipt holders
having common ownership, directly or indirectly, of more than 50% or on the
basis of common control, with the FPI will be aggregated for the purposes of
equity investment limits under FPI Regulations.
When
evaluating foreign ownership limits (“FOLs”), the Index Provider uses data
sourced from the RBI, the National Securities Depository Limited (NSDL) and the
Central Depository Services Limited (CDSL). In the event that FOL data is not
publicly available from any official source, the following FOL will be assigned
for the purposes of calculating the company’s investability weight and
conducting the foreign headroom test: Private Bank Sector: 49% FOL; Public Bank
Sector: 20% FOL; Others: sectoral cap FOL. The Index Provider may exercise
discretion in determining whether a stock should be subject to the minimum
foreign headroom test.
Principal
Risks of Investing in the Fund
The following
provides additional information regarding certain of the principal risks
identified under “Principal Risks of Investing in the Fund” in the Fund's
“Summary Information” section. Any of the following risks may impact the Fund’s
NAV which could result in the Fund trading at a premium or discount to
NAV.
Market
Risk. Securities
in the Underlying Index are subject to market fluctuations, and the Fund could
lose money due to short-term market movements and over longer periods during
market downturns. You should anticipate that the value of the Shares will
decline, more or less, in correlation with any decline in value of the
securities in the Underlying Index. The value of a security may decline due to
general market conditions, economic trends or events that are not specifically
related to the issuer of the security or due to factors that affect a particular
industry or group of industries. During a general downturn in the securities
markets, multiple asset classes may be negatively affected. Additionally,
economies and financial markets throughout the world have become increasingly
interconnected, which increases the likelihood that events or conditions in one
region or country will adversely affect markets or issuers in other regions or
countries. Natural or environmental disasters, widespread disease
6
or other
public health issues, war, military conflicts, acts of terrorism, changes in
trade regulation, including tariffs or economic sanctions, economic crises or
other events could result in increased premiums or discounts to the Fund’s
NAV.
Increasingly
strained relations between the U.S. and foreign countries may adversely
affect U.S. issuers, as well as non-U.S. issuers. A decrease in U.S. imports or
exports, changes in trade regulations, including the imposition of tariffs or
other economic sanctions on traditional allies or adversaries and their
responses thereto, inflation, and/or an economic recession in the U.S. may have
a material adverse affect on the U.S. economy, global financial markets as a
whole and the securities to which the Fund has exposure. Proposed and adopted
policy and legislative actions in the U.S. may impact many aspects of financial
and other regulations and may have a significant effect, including potentially
adversely, on U.S. markets generally and the value of certain securities. The
continued maintenance of elevated debt levels by the U.S. government as
projected by governmental agencies and non-governmental organizations, or the
imposition of U.S. austerity measures, could potentially constrain future
economic growth and the ability to effectively respond to economic downturns. If
these trends were to continue, they could adversely impact the U.S. economy,
global financial markets as a whole and the securities in which the Fund
invests.
Market
Disruption Risks Related to Armed Conflict and Geopolitical
Tension. As a result
of increasingly interconnected global economies and financial markets, armed
conflict and geopolitical tension between countries or in a geographic region,
for example the continuing conflicts between Russia and Ukraine in Europe and
Hamas and Israel in the Middle East, have the potential to adversely impact the
Fund’s investments. Such conflicts and tensions, and other corresponding events,
have had, and could continue to have, severe negative effects on regional and
global economic and financial markets, including increased volatility, reduced
liquidity, and overall uncertainty. The negative impacts may be particularly
acute in certain sectors. The timing and duration of such conflicts and
tensions, resulting sanctions, related events and other impacts cannot be
predicted. The foregoing may result in a negative impact on Fund performance and
the value of an investment in the Fund, even beyond any direct investment
exposure the Fund may have to issuers located in or with significant exposure to
an impacted country or geographic region.
Index
Risk. Unlike many
investment companies that are “actively managed,” the Fund does not utilize an
investing strategy that seeks returns in excess of its Underlying Index.
Therefore, the Fund would not necessarily buy or sell a security unless that
security is added to or removed from, respectively, its Underlying Index, even
if that security generally is underperforming. If a specific security is removed
from its Underlying Index, the Fund may be forced to sell such security at an
inopportune time or for a price lower than the security’s current market value.
The Underlying Index may not contain the appropriate mix of securities for any
particular economic cycle. Additionally, the Fund generally rebalances its
portfolio in accordance with its Underlying Index, and, therefore, any changes
to its Underlying Index’s rebalance schedule will typically result in
corresponding changes to the Fund’s rebalance schedule. Further, unlike with an
actively managed fund, the Adviser does not use techniques or defensive
strategies designed to lessen the impact of periods of market volatility or
market decline. This means that, based on certain market and economic
conditions, the Fund’s performance could be lower than other types of funds with
investment advisers that actively manage their portfolio assets to take
advantage of or defend against market events.
Indian
Securities Risk. Investment
in Indian securities involves risks in addition to those associated with
investments in securities of issuers in more developed countries, which may
adversely affect the value of the Fund’s assets. Such heightened risks include,
among others, political and legal uncertainty, greater government control over
the economy, greater risk of hyperinflation, currency fluctuations and/or
currency devaluations or
blockage of
currency movements or repatriation of capital invested and the risk of
nationalization or expropriation of assets. Moreover, in the past, India has
experienced civil unrest and hostilities with neighboring countries, including
Pakistan, and the Indian government has confronted separatist movements in
several Indian states. In addition, religious and border disputes persist in
India. Despite measures to ease tensions, that environment remains volatile.
Escalation of tensions to conflict, particularly a threat of deployment of
nuclear weapons, could destabilize the broader region and materially hinder the
development of the Indian economy.
India
is located in an area of the world that historically has been prone to natural
disasters, such as monsoons, tsunamis and earthquakes. The economy of India is
developing and largely agrarian, and the agricultural sector is one of its most
important components and therefore, India remains especially sensitive
economically to such environmental disasters. Any such event may adversely
impact the Indian economy, causing an adverse impact on the value of the
Fund.
The
securities market of India is considered an emerging market that is characterized
by a small number of listed companies with significantly smaller market
capitalization, greater price volatility, lower trading volumes and
substantially less liquidity than more developed markets. These factors, coupled
with restrictions on foreign investment and other factors, limit the supply of
securities available for investment by the Fund. This will affect the rate at
which the Fund is able to invest in the securities of Indian companies, the
purchase and sale prices for such securities, and the timing of purchases and
sales. Certain restrictions on foreign investment may decrease the liquidity of
the portfolio and subject the Fund to higher transaction costs, or inhibit its
ability to track the Underlying Index.
Brokerage
firms in India may be fewer in number, less established than brokerage
firms in more developed markets and subject to limited regulatory supervision.
Since the Fund will need to effect some or all of its securities transactions
through these brokerage firms, the Fund is subject to the risk that these
brokerage firms will not be able to fulfill their obligations to the Fund
(counterparty risk). This risk is magnified to the extent the Fund effects
securities transactions through a single brokerage firm or a limited number of
brokerage firms. In the event of the insolvency of an Indian brokerage firm, the
Fund may lose some or all of the assets held by that brokerage firm as
collateral or otherwise.
The
Fund may, directly or through such brokerage firm, use a professional
central counterparty to enter into securities transactions to reduce its
exposure to market counterparties. Such central counterparty may be subject to
limited regulatory supervision. The Fund may suffer losses in the event of
failure by a central counterparty, or other relevant market participants, to
complete a transaction. In the event of the insolvency of a central
counterparty, the Fund may lose some or all of the assets held by such
counterparty as collateral or otherwise.
The
Fund may hold its cash and securities with Indian banks and/or Indian
depositaries, which may be recently established, new to the foreign custody
business and subject to limited regulatory supervision. The Indian laws and
regulatory system may not offer investors protection to the same standard as
under similar laws in the U.S. or in the jurisdiction of other developed
economies.
Under
certain trading conditions, it may be difficult or impossible for the
Fund to
liquidate its position in an Indian security. This may occur, for example, at
times of rapid price movement if the price rises or falls in one trading session
to such an extent that under the rules of the relevant exchange trading of the
relevant securities is suspended or restricted.
The
Indian government has exercised, and continues to exercise, significant
influence over many aspects of the Indian economy, and the number of public
sector enterprises in India is substantial. Accordingly, Indian government
actions in the future could have a significant effect on the Indian economy,
which could affect private sector companies and the Fund, market conditions, and
prices and yields of securities in the Fund’s portfolio. In addition, the
economy of India may differ favorably or unfavorably from the U.S. economy in
such respects as the rate of growth of
7
gross
domestic product, the rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position. Agriculture occupies a more
prominent position in the Indian economy than in the United States, and
therefore the Indian economy is more susceptible to adverse changes in weather.
Furthermore, monsoons and other natural disasters in India and surrounding
regions also can affect the value of the Fund’s investments.
In
recent years, India has experienced periods of high inflation. High inflation may
lead to the adoption of corrective measures designed to moderate growth,
regulate prices of staples and other commodities and otherwise contain
inflation. Such measures could inhibit economic activity in India and adversely
affect the Fund’s investments. Inflation may also directly affect the investee
companies by increasing operating costs and/or reducing the returns from such
investments. In addition, high inflation may adversely affect the taxation of
Indian investee companies. Uncertainty regarding inflation and currency exchange
rates, as well as the possibility that future harmful political actions will be
taken by the Indian government and the existence of religious and ethnic unrest,
could negatively impact the Indian economy, which likely would adversely affect
the performance of the Indian companies in which the Fund invests.
Foreign
investment in securities of issuers located or operating in India may be
limited or prevented at times due to the limits on foreign ownership imposed by
the RBI and/or SEBI and the monitoring of foreign holdings and periodic
announcement of current foreign ownership limitations and changes to such limits
by the RBI and/or SEBI. In addition, certain restrictions on foreign investment
may decrease the liquidity of the Fund’s portfolio or inhibit the Fund’s ability
to track the Underlying Index. The Fund may be unable to buy or sell securities
or receive full value for such securities.
Additionally,
the government in India could impose requirements in connection
with approval of repatriation of investment income, capital or the proceeds of
sales of securities by foreign investors. Moreover, there is the risk that if
India’s balance of payments declines, the government may impose temporary
restrictions on foreign capital remittances. Consequently, the Fund could be
adversely affected by delays in, or a refusal to grant, required governmental
approval for repatriation of capital. The RBI has expressed concerns on the
unprecedented inflow of foreign investments much beyond India’s current account
deficits. As a measure for containment, it has indicated that a shift towards a
capital controls regime could be considered. There is a potential risk of how
such capital control will be affected, for example, by way of a transaction tax,
tightening the sector-wide caps for foreign ownership, regulating the
instruments by which foreign investments are structured, or otherwise. Any such
capital controls regime may inhibit the Fund’s ability to track the Underlying
Index and may adversely affect the Fund’s investments. Furthermore, investments
in India may require the Fund to adopt special procedures, seek local government
approvals or take other actions, each of which may involve additional costs to
the Fund.
Securities
laws in India are relatively new and unsettled and, consequently,
there is a risk of rapid and unpredictable change in laws regarding foreign
investment, securities regulation, title to securities and shareholder rights.
Accordingly, new or amended laws and regulations may adversely affect foreign
investors. The laws relating to limited liability of corporate shareholders,
fiduciary duties of officers and directors and the bankruptcy of state
enterprises generally are less developed than or different from such laws in the
U.S. In addition, it may be difficult to obtain and enforce a judgment in a
court in India, including in a case where there is a default with respect to the
security of an Indian issuer or with respect to any other claim that the Fund
may have against an issuer or its directors and officers. Even if the Fund
initiates a suit against the issuer in a U.S. court, it may not be possible for
the Fund to effect service of process in India. Furthermore, if the Fund obtains
a judgment in a U.S. court, it may be difficult to enforce such judgment in
India. In addition, a party seeking to enforce a foreign judgment in India also
is required to obtain approval from
the RBI to
execute such judgment to repatriate any amount recovered outside of
India.
There
is less governmental regulation of the securities industry in India than in the
U.S. Indian issuers are subject to less regulation and scrutiny with regard to
financial reporting, accounting and auditing than U.S. companies. Therefore,
information regarding Indian corporations may be less reliable and all material
information may not be available to the Fund.
Settlement
of securities transactions in India is subject to risk of loss, may be
delayed and generally is less efficient than in the U.S. In addition,
disruptions due to work stoppages and trading improprieties in these securities
markets have caused such markets to close. If extended closings were to occur in
the Indian market, the Fund’s ability to redeem Shares likewise could become
impaired. Each of these events could have a negative impact on the liquidity and
value of the Fund’s investments. To mitigate these risks, the Fund may maintain
a higher cash position than it otherwise would, or the Fund may have to sell
more liquid securities that it would not otherwise choose to sell, possibly
diluting its return and inhibiting the Fund’s ability to track the Underlying
Index.
The
stock markets in the region are undergoing a period of growth and change, which
may result in trading or price volatility and difficulties in the settlement and
recording of transactions, and in interpreting and applying the relevant laws
and regulations. The securities industries in India are underdeveloped
comparatively, and stockbrokers and other intermediaries may not perform as well
as their counterparts in the U.S. and other more developed securities markets.
In some cases, physical delivery of securities in small lots has been required
in India, and a shortage of vault capacity and trained personnel has existed
among qualified custodial Indian banks. These and other factors could have a
negative impact on the Fund’s performance.
Foreign
and Emerging Markets Investment Risk. Investments
in foreign securities involve risks that are beyond those associated with
investments in U.S. securities, and investments in securities of issuers in
emerging market countries involve risks not often associated with investments in
securities of issuers in developed countries. Fluctuations in the value of the
U.S. dollar relative to the values of other currencies may adversely affect
investments in foreign and emerging market securities. Foreign and emerging
markets may have greater concentration in a few industries, resulting in greater
vulnerability to regional and global trade conditions. Emerging market countries
may also have higher rates of inflation or deflation and more rapid and extreme
fluctuations in inflation rates and greater sensitivity to interest rate
changes. Issuers in emerging markets also may have relatively low market
liquidity, decreased publicly available and less reliable information, and
inconsistent and less stringent regulatory, disclosure, accounting, auditing and
financial reporting requirements and standards of practice, including
recordkeeping standards, comparable to those applicable to issuers in more
developed markets. As a result, the nature and quality of such information may
vary. The ability to conduct adequate due diligence in emerging markets may be
limited. In addition, certain emerging market countries may impose material
limitations on Public Company Accounting Oversight Board (“PCAOB”)
inspection, investigation and enforcement capabilities which can hinder the
PCAOB’s ability to engage in independent oversight or inspection of accounting
firms located in or operating in certain emerging markets. There is no guarantee
that the quality of financial reporting or the audits conducted by audit firms
of emerging market issuers meet PCAOB standards.
Foreign
and 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 foreign
and emerging market securities also may be subject to dividend withholding or
confiscatory taxes, currency blockage and/or transfer restrictions and higher
transactional costs. Emerging markets are subject to greater market volatility,
lower trading volume, political, social and economic instability, uncertainty
regarding the existence of trading markets and more governmental limitations on
foreign investment than more developed markets. In addition, securities in
emerging markets may be
8
subject to
greater price fluctuations than securities in 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. The ability to bring and enforce actions in emerging
market countries, or to obtain information needed to pursue or enforce such
actions, may be limited, and shareholder claims may be difficult or impossible
to pursue. In addition, the taxation systems at the federal, regional and local
levels in emerging market countries may be less transparent and inconsistently
enforced, and subject to sudden change. Emerging market countries may have a
higher degree of corruption and fraud than developed market countries, as well
as counterparties and financial institutions with less financial sophistication,
creditworthiness and/or resources. Investments in emerging market securities may
also be subject to delays in settlement procedures, unexpected market closures,
and lack of timely information. Lack of relevant data and reliable public
information, including financial information, about securities in emerging
markets may contribute to incorrect weightings and data and computational errors
when the Index Provider selects securities for inclusion in the Underlying Index
or rebalances the Underlying Index.
Each
country has different laws specific to that country that impact investments,
which may increase the risks to which investors are subject. Country-specific
rules or legislation addressing investment-related transactions may inhibit or
prevent certain transactions from transpiring in a particular
country.
From
time to time, certain companies in which the Fund invests may operate in,
or have dealings with, countries subject to sanctions or embargoes imposed by
the U.S. government and the United Nations and/or in countries the U.S.
government identified as state sponsors of terrorism. One or more of these
companies may be subject to constraints under U.S. law or regulations that could
negatively affect the company’s performance.
Furthermore,
foreign exchanges and broker-dealers generally are subject to
less government and exchange scrutiny and regulation than their U.S.
counterparts. Differences in clearance and settlement procedures in foreign
markets may cause delays in settlement of the Fund's trades effected in those
markets and could result in losses to the Fund due to subsequent declines in the
value of the securities subject to the trades. Depositary receipts also involve
substantially identical risks to those associated with investments in foreign
securities. Additionally, the issuers of certain depositary receipts,
particularly unsponsored or unregistered depositary receipts, have no obligation
to distribute shareholder communications to the holders of such receipts or to
pass through to them any voting rights with respect to the deposited
securities.
Equity
Risk.
Equity risk
is the risk that the value of equity securities, including common stocks, will
fall. The value of an equity security may fall due to changes in general
economic conditions that impact the market as a whole and that are relatively
unrelated to an issuer or its industry. These conditions include changes in
interest rates, specific periods of overall market turbulence or instability, or
general and prolonged periods of economic decline and cyclical change. An
issuer's common stock in particular may be especially sensitive to, and more
adversely affected by, these general movements in the stock market; it is
possible that a drop in the stock market may depress the price of most or all of
the common stocks that the Fund holds.
In
addition, equity risk includes the risk that investor sentiment toward,
and
perceptions regarding, one or more particular industries or economic sectors
will become negative, resulting in those investors exiting their investments in
those industries, which could cause a reduction in the value of companies in
those industries or sectors more broadly. Equity risk also includes the risk of
large-capitalization companies, which may adapt more slowly to new competitive
challenges or may be more mature and subject to more limited growth potential,
and consequently may underperform other segments of the equity market or the
market as a whole. Price changes of equity securities may occur in a particular
region, industry, or sector of the
market, and
as a result, the value of an issuer's common stock may fall solely because of
factors, such as increases in production costs, that negatively impact other
companies in the same industry or in a number of different
industries.
Equity
risk also includes the financial risks of a specific company, including
that the value of the company's securities may fall as a result of factors
directly relating to that company, such as decisions made by its management or
lower demand for the company's products or services. In particular, the common
stock of a company may decline significantly in price over short periods of
time. For example, an adverse event, such as an unfavorable earnings report, may
depress the value of common stock; similarly, the common stock of an issuer may
decline in price if the issuer fails to make anticipated dividend payments
because, among other reasons, the issuer experiences a decline in its financial
condition.
Multifactor
Investing Risk. The
Underlying Index seeks to emphasize certain factor exposures to securities
within the eligible index universe, in accordance with the Underlying Index's
methodology. There is no assurance that targeting exposure to such factors will
enhance the Underlying Index's or the Fund’s performance over time, and
targeting exposure to certain factors may detract from performance in some
market environments. There is also no guarantee the Underlying Index will
achieve the specific factor exposures.
Momentum
Investing Risk. Momentum is
the tendency of an investment to exhibit persistence in its relative
performance; a “momentum” style of investing therefore emphasizes investing in
securities that have had better recent performance compared to other securities,
on the theory that these securities will continue to increase in value. Momentum
investing is subject to the risk that the securities may be more volatile than
the market as a whole. High momentum may also be a sign that the securities’
prices have peaked, and therefore the returns on securities that have previously
exhibited price momentum may be less than the returns on other styles of
investing. Momentum can turn quickly, and stocks that previously exhibited high
momentum may not experience continued positive momentum. The Fund may experience
significant losses if momentum stops, reverses or otherwise behaves differently
than predicted. In addition, there may be periods when the momentum style of
investing is out of favor and therefore, the investment performance of the Fund
may suffer.
Value
Investing Risk. Value
investing entails the risk that if the market does not recognize that a selected
security is undervalued, the price of that security might not appreciate as
anticipated. A value investing approach could also lead to acquiring fewer
securities that might experience rapid price increases during times of market
advances. This could cause the investments to underperform strategies that
employ only a growth or other non-value approach. Value investing has also gone
in and out of favor during past market cycles and is likely to continue to do
so. During periods when value investing is out of favor or when markets are
unstable, value securities may underperform the securities of growth companies
or the overall stock market. Value securities are subject to the risk that their
valuations never improve or that the returns on value securities are lower than
returns on other styles of investing or the overall stock market. Value stocks
also may decline in price, even though in theory they are already
underpriced.
Quality
Investing Risk. The quality
style of investing focuses on companies that have low price volatility over time
and that have historical and expected high returns on uninvested capital and
high returns on equity, but there is no guarantee that the past performance of
these stocks will continue. Quality securities are subject to the risk that the
issuer may not be able to sustain consistently high returns on uninvested
capital and high returns on equity year after year and may need to borrow money
or issue debt despite their prior history. Stock price, earnings, growth and
other measures of a stock's quality can be adversely affected by market,
regulatory, political, environmental and other factors. The degree to which
these factors affect a stock's performance can be difficult to
predict.
9
Non-Diversified
Fund Risk.
The Fund is
non-diversified and can invest a greater portion of its assets in the
obligations or securities of a small number of issuers or any single issuer than
a diversified fund can. 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 the Fund’s volatility and cause the
performance of a relatively small number of issuers to have a greater impact on
the Fund’s performance.
ADR
and GDR Risk.
ADRs are
certificates that evidence ownership of shares of a foreign issuer and are
alternatives to purchasing the underlying foreign securities directly in their
national markets and currencies. GDRs are certificates issued by an
international bank that generally are traded and denominated in the currencies
of countries other than the home country of the issuer of the underlying shares.
ADRs and GDRs may be subject to certain of the risks associated with direct
investments in the securities of foreign companies, such as currency, political,
economic and market risks, because their values depend on the performance of the
non-dollar denominated underlying foreign securities. Moreover, ADRs and GDRs
may not track the price of the underlying foreign securities on which they are
based, and their value may change materially at times when U.S. markets are not
open for trading.
Certain
countries may limit the ability to convert ADRs into the underlying
foreign securities and vice versa, which may cause the securities of the foreign
company to trade at a discount or premium to the market price of the related
ADR. ADRs may be purchased through “sponsored” or “unsponsored” facilities. A
sponsored facility is established jointly by a depositary and the issuer of the
underlying security. A depositary may establish an unsponsored facility without
participation by the issuer of the deposited security. Unsponsored receipts may
involve higher expenses and may be less liquid. Holders of unsponsored ADRs
generally bear all the costs of such facilities, and the depositary of an
unsponsored facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through voting rights to the holders of such receipts in respect of the
deposited securities.
GDRs
can involve currency risk since, unlike ADRs, they may not be U.S. dollar-denominated.
Because the Fund’s NAV is determined in U.S. dollars, the Fund’s NAV could
decline if the currency of the non-U.S. market in which the Fund invests
depreciates against the U.S. dollar, even if the value of the Fund’s holdings,
measured in the foreign currency, increases.
Industry
Concentration Risk. In following
its methodology, the 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 the Underlying Index concentrates in the
securities of issuers in a particular industry or industry group, the Fund will
also concentrate its investments to approximately the same extent. By
concentrating its investments in an industry or industry group, the Fund may
face more risks than if it were diversified broadly over numerous industries or
industry groups. Such industry-based risks, any of which may adversely affect
the companies in which the Fund invests, may include, but are not limited to,
the following: general economic conditions or cyclical market patterns that
could negatively affect supply and demand in a particular industry, competition
for resources, adverse labor relations, political or world events, obsolescence
of technologies, and increased competition or new product introductions that may
affect the profitability or viability of companies in an industry. In addition,
at times, such industry or industry group may be out of favor and underperform
other industries or the market as a whole. Information about the Fund’s exposure
to a particular sector, industry, industry group or sub-industry (as applicable)
is available in the Fund’s Annual and Semi-Annual Reports to Shareholders on the
Fund’s website, and on required forms filed with the SEC.
Currency
Risk. The Fund
invests in Indian rupee-denominated equity securities of Indian issuers, which
may be subject to exchange rate fluctuations. Because the Fund’s NAV is
determined in U.S. dollars, the
Fund’s NAV
could decline if the Indian rupee depreciates against the U.S. dollar, even if
the value of the Fund’s holdings, measured in Indian rupees,
increases.
In
addition, substantially all of the income that the Fund receives is in
Indian
rupees. However, the Fund will compute and distribute its income in U.S.
dollars, and the computation of income will be made on the date that the income
is earned by the Fund at the foreign exchange rate in effect on that date.
Therefore, if the value of the Indian rupee falls relative to the U.S. dollar
between the earning of the income and the time at which the Fund converts the
Indian rupees to U.S. dollars, the Fund may be required to liquidate securities
to make distributions if the Fund has insufficient cash in U.S. dollars to meet
distribution requirements.
Furthermore,
the Fund may incur costs in connection with conversions between U.S.
dollars and Indian rupees. Foreign exchange dealers realize a profit based on
the difference between the prices at which they are buying and selling various
currencies. Thus, a dealer normally will offer to sell a foreign currency to the
Fund at one rate, while offering a lesser rate of exchange should the Fund
desire to immediately resell that currency to the dealer. The Fund will conduct
its foreign currency exchange transactions on a spot (i.e., cash) basis at the
spot rate prevailing in the foreign currency exchange market. Because the Fund
issues and redeems Creation Units principally for cash, these risks may be
greater than would be the case if the Fund issued and redeemed Creation Units
in-kind.
Mid-Capitalization
Companies Risk. Investing in
securities of mid-capitalization companies involves greater risk than
customarily is associated with investing in larger, more established companies.
Securities of mid-capitalization companies tend to be more vulnerable to
changing market conditions and may have more limited product lines and markets,
less experienced management and fewer financial resources than larger companies.
These companies’ securities may be more volatile and thinly traded (that is,
less liquid) than those of more established companies. These securities may have
returns that vary, sometimes significantly, from the overall securities
market.
Often,
mid-capitalization companies and the industries in which they focus are
still evolving and, as a result, they may be more sensitive to changing market
conditions. In addition, mid-capitalization companies are typically less
financially stable than larger, more established companies, and they may depend
on a small number of essential personnel, making them more vulnerable to loss of
personnel. Mid-capitalization companies also normally have less diverse product
lines than large-capitalization companies and are more susceptible to adverse
developments concerning their products. As such, mid-capitalization companies
typically are more likely to be adversely affected than large-capitalization
companies by changes in earnings results, business prospects, investor
expectations or poor economic or market conditions.
Regulatory
Risk. The Fund is
registered as an FPI with the SEBI in order to have the ability to make and
dispose of investments in Indian securities. There can be no assurances that the
Fund will qualify or continue to qualify as an FPI by Indian regulatory
authorities, and the loss of such registration could adversely impact the
ability of the Fund to make and dispose of investments in India. Investments by
FPIs in Indian securities are also subject to certain limits, disclosure
requirements and restrictions under applicable law, and the application of such
limits, disclosure requirements and restrictions could adversely impact the
ability of the Fund to make investments in India. If new policy announcements or
regulations in India are made which require retrospective changes in the
structure or operations of the Fund, these may adversely impact the performance
of the Fund. Additionally, with regard to investments in listed equity shares,
SEBI has prescribed certain concentration thresholds, with which every FPI is
required to comply, as well as certain size thresholds with which every FPI and
its investor group are required to comply. Failing to comply with these
requirements will require the FPI and/or its investor group to either realign
their equity holdings within specified timeframes or provide additional granular
disclosure of all entities holding any ownership, economic interest,
10
or exercising
control in the FPI(s), on a full look through basis, up to the level of all
natural persons, without any threshold. Non-compliance with these requirements
shall render the registration of the FPI invalid, and the FPI will have to
dispose all of its Indian securities and surrender its FPI registration within
specified timelines.
Tax
Risk. The Fund
intends to elect to “pass-through” to the Fund’s shareholders—as a deduction or
credit—the amount of foreign taxes paid by the Fund. The taxes passed-through to
shareholders are included in each shareholder’s income. Certain shareholders,
including some non-U.S. shareholders, are not entitled to the benefit of a
deduction or credit with respect to foreign taxes paid by the Fund. Other
foreign taxes, such as transfer taxes, may be imposed on the Fund, but would not
give rise to a credit or be eligible to be passed through to
shareholders.
Indian
tax law provides for certain provisions (“Indirect Transfer Provisions”)
for the levy of capital gains tax on income arising through the transfer of
shares in a company organized outside of India that derives, directly or
indirectly, its value substantially from assets located in India, subject to
certain exceptions. India has clarified that dividends declared and paid by a
foreign company in respect of shares which derive their value substantially from
assets situated in India would not be taxable in India by virtue of the Indirect
Transfer Provisions.
The
transfer of the Shares could be taxable in India if Shares derive their value,
directly or indirectly, substantially from assets located in India. In a case
where all the assets owned by the Fund are not located in India, the taxation of
gains will be on a proportional basis to be determined as per prescribed
rules.
Issuer-Specific
Changes Risk.
The
performance of the Fund depends on the performance of individual securities to
which the Fund has exposure. The value of an individual security or particular
type of security may be more volatile than the market as a whole and may perform
worse than the market as a whole, causing the value of the Fund’s securities to
decline. Poor performance may be caused by poor management decisions,
competitive pressures, changes in technology, expiration of patent protection,
disruptions in supply, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors. Issuers may, in times of distress or at
their own discretion, decide to reduce or eliminate dividends, which may also
cause their stock prices to decline.
Valuation
Risk.
Many factors
may influence the price at which the Fund could sell a particular portfolio
investment. The price the Fund could receive upon the sale of a portfolio
investment may differ from the Fund’s valuation of the investment, particularly
for investments that trade in thin or volatile markets or that are valued using
a fair valuation methodology. Financial information related to securities of
non-U.S. issuers may be less reliable than information related to securities of
U.S. issuers, which may make it difficult to obtain a current price for a
non-U.S. security held by the Fund.
To
the extent that the investments held by the Fund trade on foreign exchanges or
in foreign markets that may be closed when the securities exchange on which the
Fund’s shares trade is open, there are likely to be deviations between the
current price of such investment and the last quoted price for the investment
(i.e., the Fund’s quote from the closed foreign market). When market quotations
are not readily available for Fund investments, those investments are fair
valued by the Adviser. There are multiple methods that can be used to fair value
a portfolio investment, and such methods may involve more subjectivity than the
use of market quotations. The value established for an investment through fair
valuation may be different from what would be produced if the investment had
been valued using market quotations.
In
addition, there is no assurance that the Fund could sell a portfolio
investment at
any time for the value ascribed to it for purposes of calculating the Fund’s net
asset value, and it is possible that the Fund could incur a loss because an
investment is sold at a discount to its ascribed value. Purchases or redemptions
of Fund shares made on days when the Fund is holding fair valued investments may
result in receiving a greater or
lesser number
of shares, or higher or lower redemption proceeds, than would have been received
if the Fund did not hold fair valued investments or if the Adviser had used a
different methodology to fair value those investments. The ability to value
investments may also be impacted by technological issues and/or errors by
pricing services or other third-party service providers.
Valuation
Time Risk.
Because
foreign exchanges may be open on days when the Fund does not price its Shares,
the value of the non-U.S. securities in the Fund’s portfolio may change on days
when investors are not be able to purchase or sell the Fund’s Shares. As a
result, trading spreads and the resulting premium or discount on the Fund’s
Shares may widen, and, therefore, increase the difference between the market
price of the Fund’s Shares and the NAV of such Shares.
Cash
Transaction Risk. Most ETFs
generally make in-kind redemptions to avoid being taxed at the fund level on
gains on the distributed portfolio securities. However, unlike most ETFs, the
Fund currently intends to effect redemptions for cash, rather than in-kind,
because of the nature of the Fund’s investments. Because the Fund currently
intends to effect redemptions for cash, the Fund may be required to sell
portfolio securities to obtain the cash needed to distribute redemption
proceeds. Therefore, the Fund may recognize a capital gain and/or incur
brokerage costs on these sales that might not have been incurred if the Fund had
made a redemption in-kind, which may decrease the tax efficiency of the Fund
compared to ETFs that utilize an in-kind redemption process, and there may be a
substantial difference in the after-tax rate of return between the Fund and
conventional ETFs. Also, to the extent any transaction costs are not offset by
transaction fees imposed on APs, such costs will decrease the Fund’s
NAV.
Portfolio
Turnover Risk. The Fund may
engage in frequent trading of its portfolio securities in connection with the
rebalancing or adjustment of the Underlying Index, which may result in a high
portfolio turnover rate. A portfolio turnover rate of 200%, for example, is
equivalent to a fund buying and selling all of its securities two times during
the course of a year. A high portfolio turnover rate (such as 100% or more)
could result in high brokerage costs for the Fund. A high portfolio turnover
rate also can result in an increase in taxable capital gains distributions to
the Fund's shareholders.
Non-Correlation
Risk
The Fund’s
return may not match the return of the Underlying Index (that is, it may
experience tracking error) for a number of reasons. For example, the Fund incurs
operating expenses not applicable to the 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.
Additionally, if the Fund used a sampling methodology, it may result in returns
that are not as well-correlated with the return of the Underlying Index as would
be the case if the Fund purchased all of the securities in the Underlying Index
in the proportions represented in the Underlying Index.
The
performance of the Fund and its Underlying Index may vary due to asset
valuation differences and differences between the Fund’s portfolio and the
Underlying Index resulting from legal restrictions, costs or liquidity
constraints. Additionally, because the Fund issues or redeems Creation Units
principally for cash, it incurs higher costs in buying and selling securities
than if it issued and redeemed Creation Units principally in-kind. The Fund may
fair value certain of the securities held in its portfolio. To the extent the
Fund calculates its NAV based on fair value prices, its ability to track the
Underlying Index may be adversely affected. Since the Underlying Index is not
subject to the tax diversification requirements to which the Fund must adhere,
it may be required to deviate its investments from the securities contained in,
and relative weightings of, the Underlying Index.
The
Fund may not invest in certain securities included in the Underlying
Index that
are traded in India due to issues such as legal and regulatory rules and
limitations imposed by India or other trading restrictions, costs or liquidity
constraints. Liquidity constraints may also delay the Fund’s purchase or sale of
securities included in the Underlying Index. For tax efficiency purposes, the
Fund may sell certain securities to realize losses,
11
causing it to
deviate from the Underlying Index. The Fund’s investments in ADRs and GDRs in an
emerging market also may contribute to increased tracking error and
non-correlation.
The
Fund generally attempts to remain fully invested in the securities of
the
Underlying Index. However, at times, the Adviser may not fully invest the Fund’s
assets in securities of the Underlying Index, such as during times of increased
market volatility or other unusual or unexpected circumstances, during periods
of Underlying Index rebalances, or due to cash flows into the Fund, the need to
retain a reserve of cash to meet redemptions and expenses, or low Fund
assets.
The
investment activities of one or more of the Adviser’s affiliates, including
other subsidiaries of the Adviser’s parent company, Invesco Ltd., for their
proprietary accounts and for client accounts also may adversely impact the
Fund’s ability to track the Underlying Index. For example, in regulated
industries, certain emerging or international markets and under corporate and
regulatory ownership definitions, there may be limits on the aggregate amount of
investment by affiliated investors that may not be exceeded, or that may not be
exceeded without the grant of a license or other regulatory or corporate
consent, or, if exceeded, may cause the Adviser, the Fund or other client
accounts to suffer disadvantages or business restrictions. As a result, the Fund
may be restricted in its ability to acquire particular securities due to
positions held by the Adviser’s affiliates.
Authorized
Participant Concentration Risk.
Only APs may
engage in creation or redemption transactions directly with the Fund. The Fund
has a limited number of institutions that may act as APs, and such APs have no
obligation to submit creation or redemption orders. Consequently, there is no
assurance that APs will establish or maintain an active trading market for the
Shares. The risk may be heightened to the extent that securities held by the
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 the
Fund and no other AP is able to step forward to create or redeem Creation Units,
this may result in a significantly diminished trading market for Shares, and
Shares may be more likely to trade at a premium or discount to NAV and to face
trading halts and/or delisting. Additionally, to the extent that the Fund holds
non-U.S. securities, such securities may have lower trading volumes or could
experience extended market closures or trading halts. To the extent that the
Fund invests in non-U.S. securities, it may face increased risks that APs may
not be able to effectively create or redeem Creation Units, or that the Shares
may be halted and/or delisted.
Market
Trading Risk.
The Fund
faces numerous market trading risks, including losses from trading in secondary
markets, periods of high volatility and disruption in the creation/redemption
process of the Fund. Although Shares are listed for trading on a securities
exchange, there can be no assurance that an active trading market for Shares
will develop or be maintained by market makers or APs, that Shares will continue
to trade on any such exchange or meet the requirements for listing on an
exchange. Any of these factors, among others, may lead to the Shares trading at
a premium or discount to their NAV. As a result, an investor could lose money
over short or long periods. Further, the Fund may experience low trading volume
and wide bid/ask spreads. Bid/ask spreads vary over time based on trading volume
and market liquidity (including for the underlying securities held by the Fund)
and are generally lower if Shares have more trading volume and market liquidity
and higher if Shares have little trading volume and market
liquidity.
In
stressed market conditions, the market for Shares may become less liquid in
response to deteriorating liquidity in the markets for the Fund’s portfolio
holdings, which may cause a variance in the market price of Shares and their
underlying NAV. In addition, an exchange or market may issue trading halts on
specific securities or financial instruments. As a result, the ability to trade
certain securities or financial instruments may be restricted, which may disrupt
the Fund’s creation/redemption process, potentially affect
the price at
which Shares trade in the secondary market, and/or result in the Fund being
unable to trade certain securities or financial instruments at all. In these
circumstances, the Fund may be unable to rebalance its portfolio, may be unable
to accurately price its investments and/or may incur substantial trading
losses.
Operational
Risk.
The Fund is
exposed to operational risks arising from a number of factors, including, but
not limited to, human error, processing and communication errors, errors of the
Fund’s service providers, counterparties or other third-parties, failed or
inadequate processes and technology or systems failures. The Fund and the
Adviser seek to reduce these operational risks through controls and procedures.
However, these measures do not address every possible risk and may be inadequate
to address these risks.
Shares
May Trade at Prices Different than NAV.
Shares trade
on a stock exchange at prices at, above or below the Fund’s most recent NAV. The
Fund’s NAV is calculated at the end of each business day and fluctuates with
changes in the market value of the Fund’s holdings. The trading price of the
Shares fluctuates continuously throughout trading hours on the exchange, based
on both the relative market supply of, and demand for, the Shares and the
underlying value of the Fund’s portfolio holdings. As a result, the trading
prices of the Shares may deviate from the Fund’s NAV. ANY OF THESE FACTORS,
AMONG OTHERS, MAY LEAD TO THE SHARES TRADING AT A PREMIUM OR DISCOUNT TO NAV.
The Adviser cannot predict whether the Shares will trade below, at or above the
Fund’s NAV. Exchange prices are not expected to correlate exactly with the
Fund’s NAV due to timing reasons, supply and demand imbalances and other
factors. In addition, disruptions to creations and redemptions, including
disruptions at market makers, APs, or other market participants, or periods of
significant market volatility or stress, may result in trading prices for the
Shares that differ significantly from the value of the Fund’s underlying
holdings, with the result that investors may pay significantly more or receive
significantly less than the underlying value of the Shares bought or sold. This
can be reflected as a spread between the bid and ask prices for the Fund quoted
during the day or a premium or discount in the closing price from the Fund’s
NAV. Additionally, APs may be less willing to create or redeem the Shares if
there is a lack of an active market for such Shares or the Fund’s underlying
investments, which may contribute to the Shares trading at a premium or
discount.
Non-Principal
Investment Strategies
The Fund,
after investing at least 90% of its total assets in securities that comprise the
Underlying Index, as well as ADRs and GDRs that represent the securities
(including other funds) in the Underlying Index, may invest its remaining assets
in securities not included in the Underlying Index, in money market instruments,
including repurchase agreements or other funds, including affiliated funds, that
invest exclusively in money market instruments (subject to applicable
limitations under the 1940 Act, or exemptions therefrom), participation notes,
other exchange-traded instruments, convertible securities and structured notes
(notes on which the amount of principal repayment and interest payments is based
on the movement of one or more specified factors, such as the movement of a
particular security or securities index). The Fund may use convertible
securities and structured notes to seek performance that corresponds to the
Underlying Index and in managing cash flows. The Adviser anticipates that it may
take approximately four business days (i.e. each day that the Exchange is open)
for any additions to, and deletions from, the Underlying Index to fully settle
in the portfolio of the Fund.
In
accordance with 1940 Act rules, the Fund has adopted a policy to invest, under
normal circumstances, at least 80% of the value of its net assets (plus the
amount of any borrowings for investment purposes), in the particular types of
securities, and/or in securities of companies operating in the particular
industries, economic sectors, countries or geographical regions, that are
suggested by the Fund’s name (the “80% investment policy”). The Fund considers
the securities suggested by its name to be
12
those
securities that comprise the Underlying Index. Therefore, the Fund anticipates
meeting its 80% investment policy because it already generally invests at least
90% of its total assets in securities that comprise the Underlying Index, as
well as ADRs and GDRs that represent securities in the Underlying Index, in
accordance with its principal investment strategies.
The
Fund’s investment objective and the 80% investment policy each constitutes a
non-fundamental policy that the Board of Trustees (the “Board”) of Invesco India
Exchange-Traded Fund Trust (the “Trust”) may change at any time without
shareholder approval, upon 60 days’ written notice to Fund
shareholders.
The
complete list of fundamental and non-fundamental policies of the Fund is set
forth in the Fund’s Statement of Additional Information (“SAI”) under the
section “Investment Restrictions.”
Borrowing
Money
The Fund may
borrow money up to the limits set forth in the Fund’s SAI under the section
“Investment Restrictions.”
Additional
Risks of Investing in the Fund
The Fund may
also be subject to certain other non-principal risks associated with its
investments and investment strategies. The following provides additional
non-principal risk information regarding investing in the Fund.
Convertible
Securities Risk. A
convertible security generally is a preferred stock that may be converted within
a specified period of time into common stock. Convertible securities
nevertheless remain subject to the risks of both debt securities and equity
securities. As with other equity securities, the value of a convertible security
tends to increase as the price of the underlying stock goes up, and to decrease
as the price of the underlying stock goes down. Declining common stock values
therefore also may cause the value of the Fund’s investments to decline. Like a
debt security, a convertible security provides a fixed-income stream and also
tends to decrease in value when interest rates rise. Moreover, many convertible
securities have credit ratings that are below investment grade and are subject
to the same risks as lower-rated debt securities, which are considered to have
more speculative characteristics and greater susceptibility to default or
decline in market value than investment grade (or higher-rated)
securities.
Cybersecurity
Risk.
With the
increased use of technologies such as the Internet to conduct business, the
Fund, like all companies, may be susceptible to operational, information
security and related risks. Cybersecurity incidents involving the Fund and its
service providers (including, without limitation, the Adviser, fund accountant,
custodian, transfer agent and financial intermediaries) have the ability to
cause disruptions and impact business operations, potentially resulting in
financial losses, impediments to trading, the inability of Fund shareholders to
transact business, violations of applicable privacy and other laws, regulatory
fines, penalties, reputational damage, reimbursement or other compensation
costs, and/or additional compliance costs. Similar adverse consequences could
result from cybersecurity incidents affecting issuers of securities in which the
Fund invests, counterparties with which the Fund engages, governmental and other
regulatory authorities, exchanges and other financial market operators, banks,
brokers, dealers, insurance companies, other financial institutions and other
parties. The Fund and its shareholders could be negatively impacted as a
result.
Index
Provider Risk.
The Fund
seeks to track the investment results, before fees and expenses, of the
Underlying Index, as published by the Index Provider. There is no assurance that
the Index Provider will compile the Underlying Index accurately, or that the
Underlying Index will be determined, comprised or calculated accurately. While
the Index Provider gives descriptions of what the Underlying Index is designed
to achieve, the Index Provider generally does not provide any warranty or accept
any liability in relation to the quality, accuracy or completeness of data in
the Underlying Index, and it generally does not guarantee that the Underlying
Index will be in line with its methodology. Errors made by the Index Provider
with respect to the quality, accuracy and completeness of the data within the
Underlying
Index may
occur from time to time and may not be identified and corrected by the Index
Provider for a period of time, if at all.
Index
Rebalancing Risk. Pursuant to
the methodology that the Index Provider uses to calculate and maintain the
Underlying Index, a security may be removed from the Underlying Index in the
event that it does not comply with the eligibility requirements of the
Underlying Index. As a result, the Fund may be forced to sell securities at
inopportune times or for prices other than at current market values or may elect
not to sell such securities on the day that they are removed from the Underlying
Index, due to market conditions or otherwise. Due to these factors, the
variation between the Fund’s annual return and the return of the Underlying
Index may increase significantly.
Apart
from scheduled rebalances, the Index Provider may carry out additional ad
hoc rebalances to the Underlying Index, for example, to correct an error in the
selection of index constituents. When the Fund in turn rebalances its portfolio,
any transaction costs and market exposure arising from such portfolio
rebalancing will be borne by the Fund and its shareholders. Unscheduled
rebalances also expose the Fund to additional tracking error risk. Therefore,
errors and additional ad hoc rebalances carried out by the Index Provider may
increase the Fund’s costs and market exposure.
Large
Shareholder Risk.
Certain
shareholders, including a third party investor, the Adviser or an affiliate of
the Adviser, an AP, a lead market maker, or another entity, may from time to
time own a substantial amount of Shares or may invest in the Fund and hold its
investment for a limited period of time solely to facilitate the commencement of
the Fund or to facilitate the Fund achieving a specified size or scale. There
can be no assurance that any large shareholder would not redeem its investment.
Dispositions of a large number of Shares by these shareholders may adversely
affect the Fund’s liquidity and net assets to the extent such transactions are
executed directly with the Fund in the form of redemptions through an AP, rather
than executed in the secondary market. These redemptions may also force the Fund
to sell portfolio securities when it might not otherwise do so, which may
negatively impact the Fund’s NAV and increase the Fund’s brokerage costs.
Further, such sales may accelerate the realization of taxable income and/or
gains to shareholders, or the Fund may be required to sell its more liquid Fund
investments to meet a large redemption, in which case the Fund’s remaining
assets may be less liquid, more volatile, and more difficult to price. To the
extent the Fund permits cash purchases, large purchases of Shares may adversely
affect the Fund’s performance to the extent that the Fund is delayed in
investing new cash and is required to maintain a larger cash position than it
ordinarily would. To the extent these large shareholders transact in shares on
the secondary market, such transactions may account for a large percentage of
the trading volume on the Fund’s exchange and may, therefore, have a material
upward or downward effect on the market price of the Shares. To the extent the
Fund permits redemptions in cash, the Fund may hold a relatively large
proportion of its assets in cash in anticipation of large redemptions, diluting
its investment returns.
Leverage
Risk.
To the extent
that the Fund borrows money, it may be leveraged. Leveraging generally
exaggerates the effect on NAV of any increase or decrease in the market value of
the Fund’s portfolio securities. Borrowing creates interest expenses and other
expenses (e.g., commitment fees) for the Fund that affect the Fund’s
performance. Interest expenses are excluded from the Fund expenses borne by the
Adviser under the unitary management fee.
Money
Market Funds Risk. Money market
funds are subject to management fees and other expenses, and the Fund's
investments in money market funds will cause it to bear proportionately the
costs incurred by the money market funds' operations while simultaneously paying
its own management fees and expenses. An investment in a money market fund is
not a bank account and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency; it is possible to lose
money by investing in a money market fund. To the extent that the Fund invests
in money market funds, the Fund will be subject to the same risks
13
that
investors experience when investing in money market funds. These risks may
include the impact of significant fluctuations in assets as a result of the cash
sweep program or purchase and redemption activity in those funds.
Money
market funds are open-end registered investment companies that
historically have traded at a stable $1.00 per share price. However, money
market funds that do not meet the definition of a “retail money market fund” or
“government money market fund” under the 1940 Act are required to transact at a
floating NAV per share (i.e., in a manner similar to how all other non-money
market mutual funds transact), instead of at a $1.00 stable share price. Money
market funds may also impose liquidity fees in certain circumstances, including
times of market stress or heavy redemptions. If the Fund invested in a money
market fund with a floating NAV, the impact on the trading and value of the
money market instrument may negatively affect the Fund's return
potential.
Natural
Disaster/Epidemic Risk. Natural or
environmental disasters, such as earthquakes, fires, floods, hurricanes,
tsunamis and other severe weather-related phenomena generally, and widespread
disease, including pandemics and epidemics, have been and may be highly
disruptive to economies and markets, adversely impacting individual companies,
sectors, industries, markets, currencies, interest and inflation rates, credit
ratings, investor sentiment, and other factors affecting the value of the Fund’s
investments. Additionally, if a sector or sectors in which the Underlying Index
is concentrated is negatively impacted to a greater extent by such events, the
Fund may experience heightened volatility. Given the increasing interdependence
among global economies and markets, conditions in one country, market, or region
are increasingly likely to adversely affect markets, issuers, and/or foreign
exchange rates in other countries, including the U.S. Any such events could have
a significant adverse impact on the value of the Fund’s
investments.
Participation
Note Risk. The Fund may
invest a portion of its assets in P-notes. P-notes generally are issued by banks
or broker-dealers and are promissory notes that are designed to offer a return
linked to the performance of a particular underlying equity security or market.
The return on a P-note that is linked to a particular underlying security
generally is increased to the extent of any dividends paid in connection with
the underlying security. However, the holder of a P-note typically does not
receive voting rights as it would if it directly owned the underlying security.
P-notes constitute direct, general and unsecured contractual obligations of the
banks or broker-dealers that issue them, which therefore subject the Fund to
counterparty risk, as discussed below.
Investments
in P-notes involve certain risks in addition to those associated
with a direct investment in the underlying foreign companies or foreign
securities markets whose return they seek to replicate. For instance, there can
be no assurance that there will be a trading market for a P-note or that the
trading price of a P-note will equal the underlying value of the foreign company
or foreign securities market that it seeks to replicate. As the purchaser of a
P-note, the Fund is relying on the creditworthiness of the counterparty issuing
the P-note and has no rights under a P-note against the issuer of the underlying
security. Therefore, if such counterparty were to become insolvent, the Fund
would lose its investment. The risk that the Fund may lose its investment due to
the insolvency of a counterparty may be amplified because the Fund intends to
purchase P-notes issued by as few as one issuer. In seeking to limit its
counterparty risk, the Fund will limit its investment in P-notes of any one
issuer to $5 million at the time of purchase and to counterparties who meet the
creditworthiness standard required of issuers whose securities are eligible for
investment by money market funds. P-notes also include transaction costs in
addition to those applicable to a direct investment in Indian securities. The
FPI Regulations also prescribe certain conditions, eligibility criteria and
disclosure and reporting requirements for the Fund to deal in ODIs (including
P-notes), which are issued against underlying Indian securities issued by FPIs.
Failure by the Fund to meet the prescribed eligibility criteria or adhere to the
disclosure and/or reporting requirements under the FPI Regulations could
adversely
impact the ability of the Fund to subscribe to P-notes. In addition, the Fund’s
use of P-notes may cause the Fund’s performance to deviate from the performance
of the portion of the Underlying Index to which the Fund is gaining exposure
through the use of P-notes.
Moreover,
the Fund’s investments in ODIs will also be aggregated with any direct
investments by the Fund in equity securities (as well as any depositary receipt
holdings by the Fund and its investor group) for determining the total ownership
by an FPI and its investor group in the total paid-up equity capital on a fully
diluted basis of an Indian company, which must be below 10% as per the FPI
Regulations.
Additionally,
in December 2024, SEBI has provided additional conditions (concentration
thresholds and size thresholds) to be met for subscribing to equity ODIs, which
conditions if not met could trigger onerous granular disclosure requirements of
all entities holding any ownership, economic interest, or exercising control in
the ODI subscriber, on a full look through basis, up to the level of all natural
persons, without any threshold. Failure to meet the additional conditions within
specified time frames or provide granular disclosures shall render the ODI
subscriber ineligible to subscribe or hold any ODI positions through any ODI
issuing FPI. Failure by the Fund to meet these requirements could adversely
impact the ability of the Fund to subscribe to ODIs.
Due
to liquidity and transfer restrictions, the secondary markets on which P-notes
are traded may be less liquid than the markets for other securities, or may be
completely illiquid, which may lead to the absence of readily available market
quotations for securities in the Fund’s portfolio and which also may lead to
delays in the redemption of Shares. In addition, the ability of the Fund to
value its securities becomes more difficult and the judgment in the application
of fair value procedures (through fair value procedures adopted by the Board)
may play a greater role in the valuation of the Fund’s securities due to reduced
availability of reliable objective pricing data. Consequently, while such
determinations will be made in good faith, it nevertheless may be more difficult
for the Fund to assign accurately a daily value to such securities.
Portfolio
Size Risk.
Pursuant to
its methodology, the Underlying Index may be composed of a relatively small
number of individual securities. Therefore, in seeking to track the returns of
the Underlying Index, the Fund typically will hold a similarly small number of
securities. To the extent that a significant portion of the Fund’s total assets
is invested in a limited number of securities, the appreciation or depreciation
of any one security held by the Fund may have a greater impact on the Fund’s NAV
than it would if the Fund invested in a greater number of
securities.
Repurchase
Agreements Risk. Repurchase
agreements are agreements pursuant to which the Fund acquires securities from a
third party with the understanding that the seller will repurchase them at a
fixed price on an agreed date. Repurchase agreements may be characterized as
loans secured by the underlying securities. If the seller of securities under a
repurchase agreement defaults on its obligation to repurchase the underlying
securities, as a result of its bankruptcy or otherwise, the Fund will seek to
dispose of such securities, which could involve costs or delays. If the seller
becomes insolvent and subject to liquidation or reorganization under applicable
bankruptcy or other laws, the Fund’s ability to dispose of the underlying
securities may be restricted. If the seller fails to repurchase the securities,
the Fund may suffer a loss to the extent proceeds from the sale of the
underlying securities are less than the repurchase prices.
Structured
Notes Risk. Investments
in structured notes involve risks including interest rate risk, credit risk and
market risk. Interest rate risk refers to fluctuations in the value of a note
resulting from changes in the general level of interest rates. When the general
level of interest rates goes up, the prices of notes tend to go down. Credit
risk refers to the possibility that the issuer of a note will be unable and/or
unwilling to make timely interest payments and/or repay the principal on its
debt. Depending on the factors used, changes in interest rates and movement of
such factors may cause significant price fluctuations. Structured notes may be
less liquid than other types of securities and more volatile than the reference
factor
14
underlying
the note. This means that the Fund may lose money if the issuer of the note
defaults, as the Fund may not be able to readily close out its investment in
such notes without incurring losses.
Trading
Issues Risk. Investors
buying or selling Shares in the secondary market may pay brokerage commissions
or other charges, which may be a significant proportional cost for investors
seeking to buy or sell relatively small amounts of Shares. Moreover, trading in
Shares on the NYSE Arca, Inc. (the “Exchange”) may be halted due to market
conditions or for reasons that, in the view of the Exchange, make trading in
Shares inadvisable. In addition, trading in Shares on the Exchange is subject to
trading halts caused by extraordinary market volatility pursuant to the
Exchange’s “circuit breaker” rules. There can be no assurance that the
requirements of the Exchange necessary to maintain the listing of the Fund will
continue to be met or will remain unchanged. Foreign exchanges may be open on
days when Shares are not priced, and therefore, if the Fund holds securities
that are primarily listed on such exchanges, the value of such securities in the
Fund’s portfolio may change on days when shareholders will not be able to
purchase or sell Shares.
Tax Structure of ETFs
Unlike
interests in conventional mutual funds, which typically are bought and sold only
at their closing NAV per share, the Shares are traded throughout the day in the
secondary market on a national securities exchange, and are created and redeemed
principally for cash in Creation Units at each day’s next calculated NAV.
Because the Fund will create and redeem shares principally in cash, investments
in the Fund’s shares will not typically gain the tax-advantaged benefits
associated with exchange-traded funds that create and redeem shares principally
in-kind. Such in-kind arrangements are designed to protect shareholders from the
adverse effects on a fund’s portfolio that could arise from frequent cash
creation and redemption transactions. In a conventional mutual fund and
exchange-traded funds that do not effect transactions principally in-kind,
redemptions can have an adverse tax impact on taxable shareholders because the
fund may need to sell portfolio securities to obtain cash to meet such
redemptions. These sales may generate taxable gains that must be distributed to
the shareholders of the fund, whereas an in-kind redemption mechanism generally
will not lead to a tax event for the Fund (to the extent it uses in-kind
redemptions) or its shareholders.
The
Fund may be required to distribute any gains to its shareholders to avoid adverse
federal income tax consequences. For information concerning the tax consequences
of distributions, see the section entitled “Dividends, Other Distributions and
Taxes” in this Prospectus.
Portfolio Holdings
A description
of the Trust's policies and procedures with respect to the disclosure of the
Fund’s portfolio holdings is available in the Fund’s SAI, which is available at
www.invesco.com/ETFs.
Management of the Fund
Invesco
Capital Management LLC is a registered investment adviser with its offices at
3500 Lacey Road, Suite 700, Downers Grove, IL 60515. Invesco Capital
Management LLC serves as the investment adviser to the Invesco Actively Managed
Exchange-Traded Commodity Fund Trust, Invesco Actively Managed Exchange-Traded
Fund Trust, Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund
Trust II, Invesco Exchange-Traded Self-Indexed Fund Trust, Invesco India
Exchange-Traded Fund Trust and Invesco QQQ TrustSM, Series 1, a
family of ETFs, with combined assets under management of $792.7
billion as of
December 31,
2025.
As
the Fund’s investment adviser, the Adviser has overall responsibility
for selecting
and continuously monitoring the Fund’s investments, managing the Fund’s business
affairs, and providing certain clerical, bookkeeping and other administrative
services for the Trust.
Portfolio
Managers
The Adviser
uses a team of portfolio managers, investment strategists and other investment
specialists in managing the Fund. This team approach brings together many
disciplines and leverages the Adviser's extensive resources. In this regard,
Peter Hubbard, Pratik Doshi, CFA,
Michael
Jeanette and Tony Seisser (the “Portfolio Managers”) are jointly and primarily
responsible for the day-to-day management of the Fund.
Each
Portfolio Manager is responsible for various functions related to portfolio
management, including investing cash flows, coordinating with other team members
to focus on certain asset classes, implementing investment strategies and
researching and reviewing investment strategies.
Each
Portfolio Manager has limitations on their authority for risk management
and compliance purposes that the Adviser believes to be
appropriate.
■
Peter
Hubbard, Portfolio Manager of the Adviser and Vice President of the Trust, has
been responsible for the management of the Fund since March 2008. He has been
responsible for the management of certain funds in the Invesco family of ETFs
since June 2007 and has been associated with the Adviser since
2005.
■
Pratik Doshi,
CFA,
Portfolio
Manager of the Adviser, has been responsible for the management of the Fund
since February 2020. He has been responsible for the management of certain funds
in the Invesco family of ETFs since October 2019 and has been associated with
the Adviser since 2018.
■
Michael
Jeanette, Portfolio Manager of the Adviser, has been responsible for the
management of the Fund since February 2015. He has been responsible for the
management of certain funds in the Invesco family of ETFs since August 2008 and
has been associated with the Adviser since 2008.
■
Tony Seisser,
Portfolio Manager of the Adviser, has been responsible for the management of the
Fund since February 2015. He has been responsible for the management of certain
funds in the Invesco family of ETFs since August 2014 and has been associated
with the Adviser since 2013.
The
Fund's SAI provides additional information about the Portfolio Managers’
compensation structure, other accounts that the Portfolio Managers manage and
the Portfolio Managers' ownership of Shares.
Advisory
Fees
Pursuant to
an investment advisory agreement between the Adviser and the Trust (the
“Investment Advisory Agreement”), the Fund pays the Adviser an annual management
fee equal to 0.78% of its average daily net assets (the “Advisory
Fee”).
The
Advisory Fee paid by the Fund to the Adviser is an annual unitary management
fee. Out of the unitary management fee, the Adviser pays substantially all
expenses of the Fund, including the costs of transfer agency, custody, fund
administration, legal, audit and other services, except for advisory fees,
distribution fees, if any, brokerage expenses, taxes, interest, Acquired Fund
Fees and Expenses, if any, and other extraordinary expenses, including proxy
expenses (except for such proxies related to: (i) changes to the Investment
Advisory Agreement, (ii) the election of any Board member who is an “interested
person” of the Trust, or (iii) any other matters that directly benefit the
Adviser).
The
Fund may invest in money market funds that are managed by affiliates of
the Adviser and other funds (including ETFs) managed by the Adviser or
affiliates of the Adviser (collectively, “Underlying Affiliated Investments”).
The indirect portion of the advisory fees that the Fund incurs through such
Underlying Affiliated Investments is in addition to the Advisory Fee payable to
the Adviser by the Fund. Therefore, the Adviser has agreed to waive the Advisory
Fee payable by the Fund in an amount equal to the
15
lesser of:
(i) 100% of the net advisory fees earned by the Adviser or an affiliate of the
Adviser that are attributable to the Fund’s Underlying Affiliated Investments or
(ii) the Advisory Fee available to be waived. These waivers do not apply to the
Fund’s investment of cash collateral received for securities lending. These
waivers are in place through at least August 31, 2027, and there is no guarantee
that the Adviser will extend them past that date.
A
discussion regarding the Board’s basis for approving the Investment Advisory
Agreement with respect to the Fund is available on the Fund’s website and in the
Trust’s report filed on Form N-CSR for the fiscal period ended April 30,
2025.
How to Buy and Sell Shares
The Fund
issues or redeems its Shares at NAV per Share only in Creation Units or Creation
Unit Aggregations.
Most
investors buy and sell Shares in secondary market transactions through
brokers. Shares are listed for trading on the secondary market on the Exchange.
Shares can be bought and sold throughout the trading day like other publicly
traded shares. There is no minimum investment. Although Shares generally are
purchased and sold in “round lots” of 100 Shares, brokerage firms typically
permit investors to purchase or sell Shares in smaller “odd lots,” at no per
share price differential. When buying or selling Shares through a broker, you
will incur customary brokerage commissions and charges, and you may pay some or
all of the spread between the bid and the offered price in the secondary market
on each leg of a round trip (purchase and sale) transaction.
The Shares
trade on the Exchange under the symbol “IMVP.”
Share prices
are reported in dollars and cents per Share.
APs
may acquire Shares directly from the Fund, and APs may tender their Shares
for redemption directly to the Fund, at NAV per Share, only in Creation Units or
Creation Unit Aggregations, and in accordance with the procedures described in
the SAI.
Under
normal circumstances, the Fund will pay out redemption proceeds to a
redeeming AP within one day after the AP’s redemption request is received, in
accordance with the process set forth in the Fund’s SAI and/or as set forth in
the agreement between the AP and the Fund’s distributor, or as otherwise agreed
to by the Fund and the AP. However, the Fund reserves the right, including under
stressed market conditions, to take up to seven days after the receipt of a
redemption request to pay an AP, all as permitted by the 1940 Act. If the Fund
has foreign investments in a country where local market holiday(s) prevent the
Fund from delivering such foreign investments to an AP in response to a
redemption request, the Fund may take up to 15 days after the receipt of the
redemption request to deliver such investments to the AP.
The
Fund anticipates meeting redemption requests by paying redemption
proceeds to an AP primarily in cash, but it reserves the right to also do so
through in-kind redemptions. Cash used for redemptions will be raised from the
sale of portfolio assets or may come from existing holdings of cash or cash
equivalents. If the Fund holds Rule 144A securities, an AP that is not a
“qualified institutional buyer,” as such term is defined under Rule 144A of the
Securities Act of 1933, as amended (the “Securities Act”), will not be able to
receive those Rule 144A securities.
The
Fund may liquidate and terminate at any time without shareholder approval.
Book
Entry
Shares are
held in book-entry form, which means that no stock certificates are issued. The
Depository Trust Company (“DTC”) or its nominee is the record owner of all
outstanding Shares and is recognized as the record owner of all Shares for all
purposes.
Investors
owning Shares are beneficial owners as shown on the records of DTC or its
participants. DTC serves as the securities depository for all Shares.
Participants in DTC include securities brokers and dealers, banks,
trust
companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
Shares, you are not entitled to receive physical delivery of stock certificates
or to have Shares registered in your name, and you are not considered a
registered owner of Shares. Therefore, to exercise any right as an owner of
Shares, you must rely upon the procedures of DTC and its participants. These
procedures are the same as those that apply to any other stocks that you hold in
book entry or “street name” form.
Share
Trading Prices
The trading
prices of Shares on the Exchange may differ from the Fund’s daily NAV. Market
forces of supply and demand, economic conditions and other factors may affect
the trading prices of Shares.
Frequent Purchases and Redemptions of Shares
Shares may be
purchased and redeemed directly from the Fund only in Creation Units by APs. The
vast majority of trading in Shares of the Fund occurs on the secondary market
and does not involve the Fund directly. In-kind purchases and redemptions of
Creation Units by APs and cash trades on the secondary market are unlikely to
cause many of the harmful effects of frequent purchases and/or redemptions of
Shares. Cash purchases and/or redemptions of Creation Units, however, can result
in increased tracking error, disruption of portfolio management, dilution to the
Fund and increased transaction costs, which could negatively impact the Fund’s
ability to achieve its investment objective and may lead to the realization of
capital gains. These consequences may increase as the frequency of cash
purchases and redemptions of Creation Units by APs increases. However, direct
trading by APs is critical to ensuring that Shares trade at or close to
NAV.
To
minimize these potential consequences of frequent purchases and redemptions
of Shares, the Fund imposes transaction fees on purchases and redemptions of
Creation Units to cover the custodial and other costs the Fund incurs in
effecting trades. In addition, the Adviser monitors trades by APs for patterns
of abusive trading and the Fund reserves the right to not accept orders from APs
that the Adviser has determined may be disruptive to the management of the Fund
or otherwise are not in the best interests of the Fund. In recognition of the
nature of the Fund’s investments and that Shares are purchased and redeemed in
Creation Units principally for cash, the Board has adopted policies and
procedures with respect to frequent purchases and redemptions of Shares, which
incorporate the practices described above, as well as additional trade
monitoring for market timing activities.
Dividends, Other Distributions and Taxes
Dividends
and Other Distributions
Generally,
dividends from net investment income, if any, are declared and paid quarterly by
the Fund. The Fund also intends to distribute its net realized capital gains, if
any, to shareholders annually. Dividends and other distributions may be declared
and paid more frequently to comply with the distribution requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended , and to avoid a
federal excise tax imposed on regulated investment companies.
Distributions
in cash may be reinvested automatically in additional whole Shares
only if the broker through whom you purchased Shares makes such option
available.
16
Taxes
The Fund
intends to qualify each year as a regulated investment company (“RIC”) and, as
such, is not subject to entity-level tax on the income and gain it distributes.
If you are a taxable investor, dividends and distributions you receive generally
are taxable to you whether you reinvest distributions in additional Shares or
take them in cash. Every year, you will be sent information showing the amount
of dividends and distributions you received during the prior calendar year. In
addition, investors in taxable accounts should be aware of the basic tax points
listed below:
Fund
Tax Basics
■
The Fund
earns income generally in the form of dividends or interest on its investments.
This income, less expenses incurred in the operation of the Fund, constitutes
the Fund’s net investment income from which dividends may be paid to
shareholders. If you are a taxable investor, distributions of net investment
income generally are taxable to you as ordinary income.
■
Distributions
of net short-term capital gains are taxable to you as ordinary income. A fund
with a high portfolio turnover rate (a measure of how frequently assets within
the fund are bought and sold) is more likely to generate short-term capital
gains than a fund with a low portfolio turnover rate.
■
Distributions
of net long-term capital gains are taxable to you as long-term capital gains no
matter how long you have owned your Shares.
■
A portion of
income dividends paid by the Fund may be reported as qualified dividend income
eligible for taxation by individual shareholders at long-term capital gain
rates, provided certain holding period requirements are met. These reduced rates
generally are available for dividends derived from the Fund’s investment in
stocks of domestic corporations and qualified foreign corporations. If the Fund
invests primarily in debt securities, either none or only a nominal portion of
the dividends paid by the Fund will be eligible for taxation at these reduced
rates.
■
The use of
derivatives by the Fund may cause the Fund to realize higher amounts of ordinary
income or short-term capital gain, distributions from which are taxable to
individual shareholders at ordinary income tax rates rather than at the more
favorable tax rates for long-term capital gain.
■
Distributions
declared to shareholders with a record date in October, November or December—if
paid to you by the end of January—are taxable for federal income tax purposes as
if received in December.
■
Any long-term
or short-term capital gains realized on the sale of your Shares will be subject
to federal income tax.
■
If the Fund
is terminated, a shareholder will receive a liquidating distribution(s) which
should be treated as payment in exchange for the Shares held by the shareholder.
As a result, each shareholder should recognize gain or loss in an amount equal
to the difference between the shareholder’s adjusted tax basis in his or her
shares and the liquidating distribution(s) he or she receives, except to the
extent the Shares are held in a tax-advantaged arrangement. A liquidating
distribution may be subject to backup withholding as described
below.
■
A
shareholder’s cost basis information will be provided on the sale of any of the
shareholder’s Shares, subject to certain exceptions for exempt recipients.
Please contact the broker (or other nominee) that holds your Shares with respect
to reporting of your cost basis and available elections for your
account.
■
At the time
you purchase your Shares, the Fund’s NAV may reflect undistributed income or
undistributed capital gains. A subsequent distribution to you of such amounts,
although constituting a return of your investment, would be taxable. Buying
Shares just before the Fund declares an income dividend or capital gains
distribution is sometimes
known as
“buying a dividend.” In addition, the Fund’s NAV may, at any time, reflect net
unrealized appreciation, which may result in future taxable distributions to
you. On the date that distributions of net investment income and net realized
capital gains are paid, the NAV of your Shares will decrease by the per Share
amount of the distribution paid.
■
By law, if
you do not provide the Fund with your proper taxpayer identification number and
certain required certifications, you may be subject to backup withholding on any
distributions of income, capital gains, or proceeds from the sale of your
Shares. The Fund also must withhold if the IRS instructs it to do so. When
withholding is required, the amount will be 24% of any distributions or proceeds
paid.
■
An additional
3.8% Medicare tax is imposed on certain net investment income (including
ordinary dividends and capital gain distributions received from the Fund and net
gains from taxable dispositions of Shares) of U.S. individuals, estates and
trusts to the extent that such person’s “modified adjusted gross income” (in the
case of an individual) or “adjusted gross income” (in the case of an estate or
trust) exceeds a threshold amount. This Medicare tax, if applicable, is reported
by you on, and paid with, your federal income tax return.
■
You will not
be required to include the portion of dividends paid by the Fund derived from
interest on U.S. government obligations in your gross income for purposes of
personal and, in some cases, corporate income taxes in many state and local tax
jurisdictions. The percentage of dividends that constitutes dividends derived
from interest on federal obligations will be determined annually. This
percentage may differ from the actual percentage of interest received by the
Fund on federal obligations for the particular days on which you hold
shares.
■
Fund
distributions and gains from the sale of Shares generally are subject to state
and local income taxes.
■
If the Fund
qualifies to pass through the tax benefits from foreign taxes it pays on its
investments, and elects to do so, then any foreign taxes it pays on these
investments may be passed through to you. You will then be required to include
your pro rata share of these taxes in gross income, even though not
actually received by you, and will be entitled either to deduct your share of
these taxes in computing your taxable income, or to claim a foreign tax credit
for these taxes against your U.S. federal income tax.
■
Foreign
investors should be aware that U.S. withholding, special certification
requirements to avoid U.S. backup withholding and claim any treaty benefits, and
estate taxes may apply to an investment in the Fund.
■
Under the
Foreign Account Tax Compliance Act (“FATCA”), a 30% withholding tax is imposed
on income dividends made by the Fund to certain foreign entities, referred to as
foreign financial institutions or non-financial foreign entities, that fail to
comply (or be deemed compliant) with extensive reporting and withholding
requirements designed to inform the U.S. Department of the Treasury of
U.S.-owned foreign investment accounts. After December 31, 2018, FATCA
withholding also would have applied to certain capital gain distributions,
return of capital distributions and the proceeds arising from the sale of
Shares; however, based on proposed regulations issued by the IRS, which can be
relied upon currently, such withholding is no longer required unless final
regulations provide otherwise (which is not expected). The Fund may disclose the
information that it receives from its shareholders to the IRS, non-U.S. taxing
authorities or other parties as necessary to comply with FATCA or similar laws.
Withholding also may be required if a foreign entity that is a shareholder of
the Fund fails to provide the Fund with appropriate certifications or other
documentation concerning its status under FATCA.
17
■
To the extent
the Fund invests in an underlying fund that is taxed as a RIC, please see the
section titled “Taxes – Taxation of the Funds” in the Fund’s SAI for more
information regarding the tax consequences of such investment.
■
The above
discussion concerning the taxability of Fund dividends and distributions and of
sales of Shares is inapplicable to investors that generally are exempt from
federal income tax, such as retirement plans that are qualified under Section
401 and 403 of the Code and individual retirement accounts (“IRAs”) and Roth
IRAs.
Taxes
on Purchase and Redemption of Creation Units
To the extent
that the Fund permits in-kind transactions, an AP that exchanges equity
securities for a Creation Unit generally will recognize a capital gain or loss
equal to the difference between the market value of the Creation Units at the
time of exchange (plus any cash received by the AP as part of the issue) and the
sum of the AP's aggregate basis in the securities surrendered plus any cash
component paid. Similarly, an AP that redeems a Creation Unit in exchange for
securities generally will recognize a capital gain or loss equal to the
difference between the AP's basis in the Creation Units (plus any cash paid by
the AP as part of the redemption) and the aggregate market value of the
securities received (plus any cash received by the AP as part of the
redemption). The IRS, however, may assert that a loss realized upon an exchange
of securities for a Creation Unit, or of a Creation Unit for securities, cannot
be deducted currently under the rules governing “wash sales” or on the ground
that there has been no significant change in the AP's economic position. An AP
exchanging securities should consult its own tax advisor(s) with respect to
whether wash sale rules apply and when a loss otherwise might not be
deductible.
Any
capital gain or loss realized on a redemption of a Creation Unit generally is
treated as long-term capital gain or loss if the Shares have been held for more
than one year and as short-term capital gain or loss if the Shares have been
held for one year or less, assuming that such Creation Units are held as a
capital asset. If you purchase or redeem one or more Creation Units, you will be
sent a confirmation statement showing how many Shares you purchased or sold and
at what price.
The
foregoing discussion summarizes some of the more important
possible consequences under current federal, state and local tax law of an
investment in the Fund. It is not a substitute for personal tax advice. You also
may be subject to state, local and/or foreign tax on the Fund's distributions
and sales and/or redemptions of Shares. Consult your personal tax advisor(s)
about the potential tax consequences of an investment in the Shares under all
applicable tax laws.
Indian
Taxes
Gains arising
on a transfer of Shares may be taxable in India under the ITA if the Shares, as
the case may be, derive their value, directly or indirectly, substantially from
assets located in India (the test for “substantial value” is that the value of
Indian assets exceeds INR 100 million and constitutes 50% or more of the global
assets of the offshore entity), to be determined as per prescribed rules. In
such a case, the payer would be required to withhold the applicable taxes. This
is subject to certain exemptions provided under the ITA. Further, this will
generally be subject to benefits available, if any, under the applicable DTAA.
The Indian government has, by way of a circular, clarified that dividends
declared and paid by a foreign company in respect of shares which derive their
value substantially from assets situated in India would not be taxable in India.
In a case where all the assets owned by the relevant offshore entity are not
located in India, the taxation of gains under the above provision, if any, will
be on a proportional basis, i.e., only such part of income will be taxable in
India as is reasonably attributable to assets located in India and determined as
per prescribed rules.
Under
the ITA, a company is considered an Indian tax resident in any year where
its place of effective management is in India. An Indian tax resident is subject
to taxation in India on its worldwide income. However, the
Fund expects
that the place of effective management of the Fund will be outside of India and,
as a result, the Fund expects that it will not be considered an Indian resident
for tax purposes.
Distributor
Invesco
Distributors, Inc. (the “Distributor”) serves as the distributor of Creation
Units for the Fund on an agency basis. The Distributor does not maintain a
secondary market in Shares. The Distributor is an affiliate of the
Adviser.
Net Asset Value
The NAV for
the Fund will be calculated and disseminated daily on each day that the NYSE is
open for trading. The Bank of New York Mellon (“BNY”) normally calculates the
Fund’s NAV as of the regularly scheduled close of business of the NYSE (normally
4:00 p.m., Eastern time). The Fund’s NAV is based on prices at the time of
closing, and U.S. fixed-income assets may be valued as of the announced closing
time for trading in fixed-income instruments in a particular market or exchange.
NAV is calculated by deducting all of the Fund’s liabilities from the total
value of its assets and then dividing the result by the number of Shares
outstanding, rounding to the nearest cent. Generally, the portfolio securities
are recorded in the NAV no later than the trade date plus one day. In
determining NAV, expenses are accrued and applied daily and securities and other
assets for which market quotations are readily available and reliable are valued
at market value. The Trust’s Board has designated the Adviser to fair value the
Fund’s portfolio securities and other assets for which market quotations are not
readily available and reliable in accordance with Board-approved policies and
related Adviser procedures (the “Valuation Procedures”), subject to the Board’s
oversight.
Securities
listed or traded on an exchange (except convertible securities)
generally are valued at the last trade price or official closing price that day
as of the close of the exchange where the security primarily trades. Securities
of investment companies that are not exchange-traded (e.g., open-end mutual
funds) are valued using such company’s end-of-business day NAV per share,
whereas securities of investment companies that are exchange-traded are valued
at the last trade price or official closing price on the exchange on which they
primarily trade. Deposits, other obligations of U.S. and non-U.S. banks and
financial institutions, and cash equivalents are valued at their daily account
value. Fixed-income securities (including convertible securities) normally are
valued on the basis of prices provided by independent pricing services. Pricing
services generally value fixed-income securities assuming orderly transactions
of institutional round lot size, but the 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, and their value may be adjusted accordingly. Futures
contracts are valued at the daily settlement price set by an exchange on which
they are principally traded. U.S. exchange-traded options are valued at the mean
between the last bid and asked prices from the exchange on which they
principally trade. Non-U.S. exchange-traded options are valued at the final
settlement price set by the exchange on which they trade. Options not listed on
an exchange and swaps generally are valued using pricing provided from
independent pricing services. Unlisted securities will be valued using prices
provided by independent pricing services or by another method that the Adviser,
in its judgment, believes better reflects the security’s fair value in
accordance with the Valuation Procedures. Foreign exchange-traded equity
securities are valued at their market value if market quotations are available
and reliable. The Adviser may use various pricing services to obtain market
quotations as well as fair value prices. The Adviser may discontinue the use of
any pricing service at any time.
18
At
times, a listed security’s market price may not be readily available.
Moreover,
even when market quotations are available for a security, they may be stale or
unreliable. A security’s last market quotation may become stale because, among
other reasons, (i) the security is not traded frequently, (ii) the security
ceased trading before its exchange closed; (iii) market or issuer-specific
events occurred after the security ceased trading; or (iv) the passage of time
between when the security’s trading market closes and when the Fund calculates
its NAV caused the quotation to become stale. A security’s last market quotation
may become unreliable because of (i) certain issuer- or security-specific
events, including a merger or insolvency, (ii) events which affect a
geographical area or an industry segment, such as political events or natural
disasters, or (iii) market events, such as a significant movement in the U.S.
market. When a security’s market price is not readily available, or the Adviser
determines, in its judgment, that such price is stale or unreliable, the Adviser
will value the security at fair value in good faith using the Valuation
Procedures.
Fair
value pricing involves subjective judgments, and fair value pricing methods may
change from time to time. Consequently, while such determinations may be made in
good faith, it may nevertheless be more difficult for the Adviser to accurately
assign a daily value, and Fund securities that are fair valued may be subject to
greater fluctuation in their value from one day to the next than would be the
case if market quotations were used. Because of the inherent uncertainties of
valuation, and the degree of subjectivity in such decisions, it is possible that
a fair value determination for a security is materially different than the value
that could be realized upon the sale of the security. There is no assurance that
the Fund could sell a portfolio security for the value established for it at any
time, and it is possible that the Fund would incur a loss if a security is sold
at a discount to its established value. Because the Fund seeks to track the
Underlying Index, the use of fair value pricing could result in a difference
between the prices used to calculate the Fund’s NAV and the prices used by the
Underlying Index, which may increase the Fund’s tracking error.
Securities
included in the Underlying Index may trade on exchanges in India. Due to
the time difference between the United States and India, securities listed on
exchanges in India will not trade at times when Shares of the Fund will trade.
Because securities included in the Underlying Index are not traded while the
Fund’s NAV is calculated, changes in the value of the Fund’s investments in
Indian securities that are calculated and disseminated throughout the trading
day will reflect changes in exchange rates between the Indian rupee and the U.S.
dollar and will not reflect changes in the market prices of such
securities.
Fund Service Providers
BNY, 240
Greenwich Street, New York, New York 10286, is the administrator, custodian,
transfer agent and fund accounting and dividend disbursing agent for the
Fund.
Stradley
Ronon Stevens & Young, LLP, 191 North Wacker Drive, Suite 1601, Chicago,
Illinois 60606, and 2000 K Street, NW, Suite 700, Washington, D.C. 20006, serves
as legal counsel to the Trust.
PricewaterhouseCoopers
LLP (“PwC”), One North Wacker Drive, Chicago, Illinois 60606, serves as the
Fund’s independent registered public accounting firm.
PwC is
responsible for auditing the annual financial statements of the Fund and assists
in the preparation and/or review of the Fund’s federal and state income tax
returns.
19
Financial Highlights
The financial
highlights table below is intended to help you understand the Fund’s financial
performance for the past five fiscal years. Certain information reflects
financial results for a single Share. The total returns in the table represent
the rate that an investor would have earned (or lost) on an investment in the
Fund (assuming reinvestment of all dividends and other
distributions).
This information has been derived from the Fund’s financial statements, which
have been audited by PwC, whose report, along with the Fund’s financial
statements, is available on the Fund’s website and is included in the Fund’s
Form N-CSR filed with the SEC, which is available upon
request.
|
|
Years
Ended October 31, | ||||
|
|
2025 |
2024 |
2023 |
2022 |
2021 |
|
Per
Share Operating Performance: |
|
|
|
|
|
|
Net
asset value at beginning of year |
$28.70 |
$22.82 |
$24.31 |
$28.00 |
$19.68 |
|
Net
investment income(a)
|
0.08 |
0.11 |
0.12 |
0.12 |
0.11 |
|
Net
realized and unrealized gain (loss) on investments |
(0.46
) |
6.18 |
1.43 |
(2.25
) |
8.45 |
|
Total
from investment operations |
(0.38
) |
6.29 |
1.55 |
(2.13
) |
8.56 |
|
Distributions
to shareholders from: |
|
|
|
|
|
|
Net
investment income |
- |
- |
(0.10
) |
(0.11
) |
(0.26
) |
|
Net
realized gains |
(2.19
) |
(0.43
) |
(2.99
) |
(1.49
) |
- |
|
Total
distributions |
(2.19
) |
(0.43
) |
(3.09
) |
(1.60
) |
(0.26
) |
|
Transaction
fees(a)
|
0.01 |
0.02 |
0.05 |
0.04 |
0.02 |
|
Net
asset value at end of year |
$26.14 |
$28.70 |
$22.82 |
$24.31 |
$28.00 |
|
Market
price at end of year(b)
|
$26.01 |
$28.77 |
$22.82 |
$24.42 |
$28.08 |
|
Net
Asset Value Total Return(c)
|
(1.25
)% |
27.90
% |
7.35
% |
(7.63
)% |
43.64
% |
|
Market
Price Total Return(c)
|
(2.01
)% |
28.20
% |
6.76
% |
(7.53
)% |
45.68
% |
|
Ratios/Supplemental
Data: |
|
|
|
|
|
|
Net
assets at end of year (000’s omitted) |
$213,529 |
$254,839 |
$172,044 |
$96,745 |
$120,670 |
|
Ratio
to average net assets of: |
|
|
|
|
|
|
Expenses |
0.78
% |
0.78
% |
0.78
% |
0.78
% |
0.78
% |
|
Net
investment income |
0.30
% |
0.42
% |
0.53
% |
0.46
% |
0.45
% |
|
Portfolio
turnover rate(d) |
15
% |
31
% |
35
% |
38
% |
36
% |
|
(a) |
Based
on average shares outstanding. |
|
(b) |
The
mean between the last bid and ask prices. |
|
(c) |
Net
asset value total return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value
during
the period, and redemption at net asset value on the last day of the
period. Net asset value total return includes adjustments in accordance
with accounting principles generally accepted in
the
United States of America and as such, the net asset value for financial
reporting purposes and the returns based upon those net asset values may
differ from the net asset value and returns
for
shareholder transactions. Market price total return is calculated assuming
an initial investment made at the market price at the beginning of the
period, reinvestment of all dividends and
distributions
at market price during the period, and sale at the market price on the
last day of the period. Total investment returns calculated for a period
of less than one year are not annualized. |
|
(d) |
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. |
20
Index Provider
No entity
that creates, compiles, sponsors or maintains the Underlying Index is or will be
an affiliated person, as defined in Section 2(a)(3) of the 1940 Act, or an
affiliated person of an affiliated person, of the Trust, the Adviser, the
Distributor or a promoter of the Fund.
Neither
the Adviser nor any affiliate of the Adviser has any rights to influence the
selection of the securities in the Underlying Index.
The
Underlying Index is compiled,
maintained
and calculated by the Index Provider or its affiliate, agent or partner. The
Index Provider is not affiliated with the Trust, the Adviser or the Distributor.
The Adviser has entered into a license agreement with the Index Provider. The
Fund is entitled to use the Underlying Index pursuant to a sub-licensing
agreement with the Adviser.
Disclaimers
“Bloomberg®” and the
Underlying Index are service marks of Bloomberg Finance L.P. and its affiliates,
including Bloomberg Index Services Limited (“BISL”), the administrator of the
Underlying Index (collectively, “Bloomberg”), and have been licensed for use for
certain purposes by Invesco Capital Management LLC (the “Licensee”).
The
Fund is not sponsored, endorsed, sold or promoted by Bloomberg. Bloomberg
does not make any representation or warranty, express or implied, to the owners
of or counterparties to the Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund particularly.
The only relationship of Bloomberg to the Licensee is the licensing of certain
trademarks, trade names and service marks and of the Underlying Index, which are
determined, composed and calculated by BISL without regard to the Licensee or
the Fund. Bloomberg has no obligation to take the needs of the Licensee or the
owners of the Fund into consideration in determining, composing or calculating
the Underlying Index. Bloomberg is not responsible for and has not participated
in the determination of the timing of, prices at, or quantities of the Fund’s
shares to be issued. Bloomberg shall not have any obligation or liability,
including, without limitation, to the customers of the Fund, in connection with
the administration, marketing or trading of the Fund.
BLOOMBERG
DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS
OF THE UNDERLYING INDEX OR ANY DATA RELATED THERETO AND SHALL HAVE NO LIABILITY
FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN. BLOOMBERG DOES NOT MAKE ANY
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS
OF THE FUND’S SHARES OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
UNDERLYING INDEX OR ANY DATA RELATED THERETO. BLOOMBERG DOES NOT MAKE ANY
EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
UNDERLYING INDEX OR ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE
FOREGOING, TO THE MAXIMUM EXTENT ALLOWED BY LAW, BLOOMBERG, ITS LICENSORS, AND
ITS AND THEIR RESPECTIVE EMPLOYEES, CONTRACTORS, AGENTS, SUPPLIERS, AND VENDORS
SHALL HAVE NO LIABILITY OR RESPONSIBILITY WHATSOEVER FOR ANY INJURY OR
DAMAGES—WHETHER DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR
OTHERWISE—ARISING IN CONNECTION WITH THE FUND OR UNDERLYING INDEX OR ANY DATA OR
VALUES RELATING THERETO—WHETHER ARISING FROM THEIR NEGLIGENCE OR OTHERWISE, EVEN
IF NOTIFIED OF THE POSSIBILITY THEREOF.
The
Adviser does not guarantee the accuracy and/or the completeness of the
Underlying Index or any data included therein, and the Adviser shall have no
liability for any errors, omissions, restatements, re-calculations or
interruptions therein. The Adviser makes no warranty, express or implied, as
to results to
be obtained by the Fund, owners of the Shares or any other person or entity from
the use of the Underlying Index or any data included therein. The Adviser makes
no express or implied warranties and expressly disclaims all warranties of
merchantability or fitness for a particular purpose or use with respect to the
Underlying Index or any data included therein. Without limiting any of the
foregoing, in no event shall the Adviser have any liability for any special,
punitive, direct, indirect or consequential damages (including lost profits)
arising out of matters relating to the use of the Underlying Index, even if
notified of the possibility of such damages.
INDIA
The
following disclosure is being added to comply with Indian Law. THE INFORMATION
CONTAINED HEREIN IS NOT IN THE FORM OF A PROSPECTUS OR A STATEMENT IN LIEU OF
PROSPECTUS AS PER THE PROVISIONS OF THE (INDIAN) COMPANIES ACT, 1956 OR THE
(INDIAN) COMPANIES ACT, 2013 AND HAS NOT BEEN OR WILL NOT BE REGISTERED AS A
PROSPECTUS OR A STATEMENT IN LIEU OF PROSPECTUS. THE INFORMATION SET OUT HEREIN
DOES NOT CONSTITUTE, AND MAY NOT BE USED FOR OR IN CONNECTION WITH, AN OFFER OR
SOLICITATION TO DO BUSINESS OR PURCHASE ANY SECURITIES OR OWNERSHIP INTERESTS BY
ANY PERSON IN INDIA OR IN ANY OTHER JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH AN OFFER OR SOLICITATION. INVESTMENTS IN THE FUND ACCEPTED FROM OR HELD BY:
(A) A PERSON WHO IS A PERSON RESIDENT IN INDIA; (B) A PERSON WHO IS A
NON-RESIDENT INDIAN; (C) OVERSEAS CITIZEN OF INDIA; OR (D) A PERSON WHO IS
CONTROLLED BY ANY OF THE PERSONS MENTIONED IN (A) THROUGH (C); OR (E) A PERSON
WHOSE BENEFICIAL OWNER IS ANY OF THE PERSONS LISTED IN (A) THROUGH (C), IS
SUBJECT TO APPROVAL OF THE ADVISOR IN THE EVENT THE SUBSCRIPTION FROM PERSONS
LISTED IN (A) THROUGH (E) ABOVE BREACHES THE INVESTMENT LIMITS PRESCRIBED UNDER
THE SECURITIES AND EXCHANGE BOARD OF INDIA (FOREIGN PORTFOLIO INVESTORS),
REGULATIONS, 2019. THIS APPLIES TO ANYONE WHO IS CURRENTLY A PERSON LISTED IN
(A) THROUGH (E) ABOVE OR BECOMES A PERSON LISTED IN (A) THROUGH (E) ABOVE IN THE
FUTURE. THE TERM “NON-RESIDENT INDIAN” SHALL HAVE THE SAME MEANING AS ASSIGNED
TO SUCH TERM UNDER FOREIGN EXCHANGE MANAGEMENT (NON-DEBT INSTRUMENTS) RULES,
2019 MADE UNDER FOREIGN EXCHANGE MANAGEMENT ACT, 1999, WHICH CURRENTLY PROVIDES
THAT NON-RESIDENT INDIAN MEANS AN INDIVIDUAL RESIDENT OUTSIDE INDIA WHO IS
CITIZEN OF INDIA. THE TERM “OVERSEAS CITIZEN OF INDIA” HAS THE SAME MEANING AS
ASSIGNED TO SUCH TERM UNDER FOREIGN EXCHANGE MANAGEMENT (NON-DEBT INSTRUMENTS)
RULES, 2019 MADE UNDER FOREIGN EXCHANGE MANAGEMENT ACT, 1999, WHICH CURRENTLY
PROVIDES THAT OVERSEAS CITIZEN OF INDIA MEANS AN INDIVIDUAL RESIDENT OUTSIDE
INDIA WHO IS REGISTERED AS AN OVERSEAS CITIZEN OF INDIA CARDHOLDER UNDER SECTION
7(A) OF THE CITIZENSHIP ACT, 1955. THE TERM ‘RESIDENT INDIAN’ HAS THE SAME
MEANING AS ASSIGNED TO THE TERM ‘PERSON RESIDENT IN INDIA’ UNDER THE FOREIGN
EXCHANGE MANAGEMENT ACT, 1999 WHICH CURRENTLY PROVIDES THAT “PERSON RESIDENT IN
INDIA” MEANS (1) A PERSON RESIDING IN INDIA FOR MORE THAN 182 DAYS DURING THE
COURSE OF THE PRECEDING FINANCIAL YEAR, BUT DOES NOT INCLUDE (A) A PERSON WHO
HAS GONE OUT OF INDIA OR WHO STAYS OUTSIDE INDIA: (I) FOR OR ON TAKING UP
EMPLOYMENT OUTSIDE INDIA; (II) FOR CARRYING ON OUTSIDE INDIA A BUSINESS OR
VOCATION; OR (III) FOR ANY OTHER PURPOSE, IN SUCH CIRCUMSTANCES AS WOULD
INDICATE HIS INTENTION TO STAY OUTSIDE INDIA FOR AN UNCERTAIN PERIOD; OR (B) A
PERSON WHO HAS COME TO OR STAYS IN INDIA, EXCEPT: (I) FOR OR ON TAKING UP
EMPLOYMENT IN INDIA; (II) FOR CARRYING ON IN INDIA A BUSINESS OR VOCATION; OR
(III) FOR ANY OTHER PURPOSE, IN SUCH CIRCUMSTANCES AS WOULD INDICATE HIS
INTENTION TO STAY IN INDIA FOR AN UNCERTAIN PERIOD; (2) ANY PERSON OR BODY
CORPORATE REGISTERED OR INCORPORATED IN INDIA; (3) AN OFFICE, BRANCH OR AGENCY
IN INDIA
21
OWNED OR
CONTROLLED BY A PERSON RESIDENT OUTSIDE INDIA; OR (4) AN OFFICE, BRANCH OR
AGENCY OUTSIDE INDIA OWNED OR CONTROLLED BY A PERSON RESIDENT IN INDIA. THE TERM
BENEFICIAL OWNER, HAS THE SAME MEANING AS DEFINED IN THE PREVENTION OF
MONEY-LAUNDERING (MAINTENANCE OF RECORDS) RULES, 2005, WHICH CURRENTLY PROVIDES
THAT (I) IF THE INVESTOR IS A COMPANY, THE NATURAL PERSON(S), WHO WHETHER ACTING
ALONE OR TOGETHER, OR THROUGH ONE OR MORE JURIDICAL PERSON, (A) HAS A
CONTROLLING OWNERSHIP INTEREST, I.E. OWNERSHIP OF OR ENTITLEMENT TO MORE THAN
10% OF SHARES OR PROFITS OF THE COMPANY, OR (B) WHO EXERCISES CONTROL THROUGH
OTHER MEANS (INCLUDING RIGHT TO APPOINT MAJORITY OF THE DIRECTORS OR TO CONTROL
THE MANAGEMENT OR POLICY DECISIONS INCLUDING BY VIRTUE OF THEIR SHAREHOLDING OR
MANAGEMENT RIGHTS OR SHAREHOLDERS AGREEMENTS OR VOTING AGREEMENTS); (II) IF THE
INVESTOR IS A PARTNERSHIP FIRM, THE NATURAL PERSON(S), WHO WHETHER ACTING ALONE
OR TOGETHER, OR THROUGH ONE OR MORE JURIDICAL PERSON, HAS OWNERSHIP
OF/ENTITLEMENT TO MORE THAN 10% OF CAPITAL OR PROFITS OF THE PARTNERSHIP OR WHO
EXERCISES CONTROL THROUGH OTHER MEANS, INCLUDING THE RIGHT TO CONTROL THE
MANAGEMENT OR POLICY DECISION; (III) IF THE INVESTOR IS AN UNINCORPORATED
ASSOCIATION OR BODY OF INDIVIDUALS, THE NATURAL PERSON(S), WHO WHETHER ACTING
ALONE OR TOGETHER, OR THROUGH ONE OR MORE JURIDICAL PERSON, HAS OWNERSHIP OF OR
ENTITLEMENT TO MORE THAN 15% OF THE PROPERTY OR CAPITAL OR PROFITS OF SUCH
ASSOCIATION OR BODY OF INDIVIDUALS; (IV) IN CASE NO NATURAL PERSON IS IDENTIFIED
UNDER (I), (II) OR (III), THE BENEFICIAL OWNER SHALL BE THE RELEVANT NATURAL
PERSON WHO HOLDS THE POSITION OF A SENIOR MANAGING OFFICIAL; (V) IF THE INVESTOR
IS A TRUST, THE AUTHOR OF THE TRUST, THE TRUSTEE, THE BENEFICIARIES WITH 10% OR
MORE INTEREST IN THE TRUST AND ANY OTHER NATURAL PERSON EXERCISING ULTIMATE
EFFECTIVE CONTROL OVER THE TRUST THROUGH A CHAIN OF CONTROL OR OWNERSHIP; AND
(VI) IF THE INVESTOR OR THE OWNER OF THE CONTROLLING INTEREST IS AN ENTITY
LISTED ON A STOCK EXCHANGE IN INDIA, OR IT IS AN ENTITY RESIDENT IN
JURISDICTIONS NOTIFIED BY THE CENTRAL GOVERNMENT AND LISTED ON STOCK EXCHANGES
IN SUCH JURISDICTIONS NOTIFIED BY THE CENTRAL GOVERNMENT, OR IT IS A SUBSIDIARY
OF SUCH LISTED ENTITIES, IT IS NOT NECESSARY TO IDENTIFY AND VERIFY THE IDENTITY
OF ANY SHAREHOLDER OR BENEFICIAL OWNER OF SUCH ENTITIES.
Premium/Discount Information
Information
showing the number of days the market price of the Shares was greater (at a
premium) and less (at a discount) than the Fund’s NAV for the most recently
completed calendar year and the most recently completed calendar quarters since
that year (or the life of the Fund, if shorter) is available on the Fund’s
website at www.invesco.com/ETFs.
Other Information
Continuous
Offering
The method by
which Creation Unit Aggregations of Shares are created and traded may raise
certain issues under applicable securities laws. Because new Creation Unit
Aggregations of Shares are issued and sold by the Fund on an ongoing basis, a
“distribution,” as such term is used in the Securities Act, may occur at any
point. Broker-dealers and other persons are cautioned that some activities on
their part may, depending on the circumstances, result in their being deemed
participants in a distribution in a manner which could render them statutory
underwriters and subject them to the prospectus delivery requirement and
liability provisions of the Securities Act.
For
example, a broker-dealer firm or its client may be deemed a statutory
underwriter if it takes Creation Unit Aggregations after placing an order with
the Distributor, breaks them down into constituent Shares and sells such Shares
directly to customers, or if it chooses to couple the creation of a supply of
new Shares with an active selling effort involving the solicitation of secondary
market demand for Shares. A determination of whether one is an underwriter for
purposes of the Securities Act must take into account all the facts and
circumstances pertaining to the activities of the broker-dealer or its client in
the particular case, and the examples mentioned above should not be considered a
complete description of all the activities that could lead to a characterization
as an underwriter.
Broker-dealer
firms also should note that dealers who are not “underwriters”
but are effecting transactions in Shares, whether or not participating in the
distribution of Shares, generally are required to deliver a prospectus. This is
because the prospectus delivery exemption in Section 4(a)(3)(C) of the
Securities Act is not available in respect of such transactions as a result of
Section 24(d) of the 1940 Act. As a result, broker-dealer firms should note that
dealers who are not “underwriters” but are participating in a distribution (as
contrasted with engaging in ordinary secondary market transactions), and thus
dealing with the Shares that are part of an overallotment within the meaning of
Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage of
the prospectus delivery exemption provided by Section 4(a)(3) of the Securities
Act. For delivery of prospectuses to exchange members, the prospectus delivery
mechanism of Rule 153 under the Securities Act only is available with respect to
transactions on a national exchange.
Delivery
of Shareholder Documents–Householding
Householding
is an option available to certain investors of the Fund. Householding is a
method of delivery, based on the preference of the individual investor, in which
a single copy of certain shareholder documents can be delivered to investors who
share the same address, even if their accounts are registered under different
names. Householding for the Fund is available through certain broker-dealers. If
you are interested in enrolling in householding and receiving a single copy of
the prospectus and other shareholder documents, please contact your
broker-dealer. If you currently are enrolled in householding and wish to change
your householding status, please contact your broker-dealer.
For
More Information
For more
detailed information on the Trust, the Fund and the Shares, you may request a
copy of the Fund’s SAI. The SAI provides detailed information about the Fund and
is incorporated by reference into this prospectus. This means that the SAI
legally is a part of this prospectus. Additional information about the Fund’s
investments also is available in the Fund’s Annual and Semi-Annual Reports to
Shareholders and on Form N-CSR filed with the SEC. In the Fund’s current Annual
Report, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the last
fiscal year. In Form N-CSR you will find the Fund’s annual and semi-annual
financial statements. If you have questions about the Fund or Shares or you wish
to obtain the SAI, Annual Report and/or Semi-Annual Report, or the Fund’s
financial statements, free of charge, or to make shareholder inquiries,
please:
|
Call: |
Invesco
Distributors, Inc. at 1-800-983-0903
Monday
through Friday
8:00
a.m. to 5:00 p.m. Central Time |
|
Write: |
Invesco
India Exchange-Traded Fund Trust
c/o
Invesco Distributors, Inc.
11
Greenway Plaza
Houston,
Texas 77046-1173 |
|
Visit: |
www.invesco.com/ETFs |
Reports
and other information about the Fund are available on the EDGAR
Database on the SEC's website at www.sec.gov, and copies of this
22
information
may be obtained, after paying a duplicating fee, by electronic request at the
following e-mail address: [email protected].
No
person is authorized to give any information or to make any representations
about the Fund and its Shares not contained in this prospectus, and you should
not rely on any other information. Read and keep this prospectus for future
reference.
Dealers
effecting transactions in the Shares, whether or not participating
in this distribution, generally are required to deliver a prospectus. This is in
addition to any obligation of dealers to deliver a prospectus when acting as
underwriters.
The Trust's
registration number under the 1940 Act is 811-22147.
23
