Description

This ETF, the Invesco US High Yield Fallen Angels UCITS ETF Dist, strives to deliver the total return performance of its benchmark, the FTSE Time-Weighted US Fallen Angel Bond Select Index, after accounting for all fees. Income is distributed to investors on a quarterly basis. The underlying index identifies and tracks "fallen angels"—bonds that were initially classified as investment-grade but have subsequently seen their ratings downgraded to high-yield. To qualify for inclusion, these securities must be USD-denominated bonds issued by corporations headquartered in either the US or Canada. Bonds become eligible if their rating changes from investment-grade to high-yield in the preceding month. Once admitted, they are generally held for a duration of 60 months, provided they continue to satisfy the inclusion criteria. If a bond exits and subsequently re-enters the index, its inclusion period is reset. Unlike indices that weight constituents by market value, this Reference Index's weighting scheme is time-based, giving higher allocations to bonds that have more recently become "fallen angels." This approach is designed to capture the potential price rebound often experienced by these securities soon after their initial downgrade to high-yield. To promote diversification, no single issuer can account for more than 5% of the Reference Index. For liquidity management, time-based weights of constituents are capped at three times their respective market value-based weights. The index is rebalanced every month. The portfolio managers aim to fulfill the fund's objective by employing a sampling methodology. They utilize sophisticated portfolio modelling tools and techniques to acquire and maintain a representative proportion of the index's securities, effectively mirroring the characteristics of the entire index. This sampling strategy seeks to replicate the index's performance as precisely as possible while simultaneously reducing the costs typically incurred with full replication. This ETF operates under a passive management style. An investment in this fund signifies the purchase of units in a passively managed, index-tracking fund, rather than direct ownership of the underlying assets held by the fund.