Description

The Invesco US High Yield Fallen Angels UCITS ETF GBP Hdg Acc aims to provide the total return performance of the FTSE Time-Weighted US Fallen Angel Bond Select Index (the "Reference Index"), less the impact of fees.To minimise exposure to fluctuations in the exchange rate between USD and GBP, the GBP Hedged share class enters into foreign exchange transactions.The Reference Index measures the performance of “fallen angels” – bonds which were previously rated investment-grade, but were subsequently downgraded to high-yield. To be included, the securities must be USD-denominated bonds issued by corporations domiciled in the US or Canada. Any such bonds with a rating changed from investment-grade to high-yield in the previous month are eligible for inclusion and will be held for a period of 60 months, provided they continue to meet the inclusion criteria. If a bond exits and then re-enters the Index, the inclusion period is reset. Unlike indices where constituent weights are based on market value, the Index’s weights are determined based on the time from inclusion, with higher weights assigned to bonds that have more recently become “fallen angels” (aiming to capture the potential price rebound effect that fallen angels may experience soon after their initial downgrade to high-yield). No single issuer can make up more than 5% of the index. For liquidity, constituents’ time-based weights are capped at 3 times their respective market value-based weights. The Reference Index is rebalanced monthly.The portfolio managers aim to achieve the fund’s objective by using portfolio modelling tools and techniques to buy and hold a proportion of the index securities that represents the characteristics of the entire index. The objective of this sampling method is to replicate the index performance as closely as possible while reducing the costs that would normally be incurred with full replication.This ETF is passively managed. An investment in this fund is an acquisition of units in a passively managed, index tracking fund rather than in the underlying assets owned by the fund.