Description

The Invesco MSCI Emerging Markets UCITS ETF (MXFS.L) seeks to replicate the net total return of the MSCI Emerging Markets Index, after accounting for its operational expenses. This benchmark index tracks the performance of large and mid-capitalisation equities across global emerging economies, encompassing approximately 85% of the free float-adjusted market value within each nation. While the fund predominantly generates returns from a portfolio of equities, these holdings are typically not identical to those of the reference index. To achieve a tighter correlation, the ETF also utilises unfunded swap agreements. Through these contracts, approved counterparties compensate the fund for any divergence between the index's performance and that of its underlying equity basket. This blended strategy aims for a more precise and consistent alignment with the index's returns than would be possible through direct physical replication alone. As a passively managed, index-tracking fund, an investment represents ownership of fund units, not the underlying assets it holds.