Description

This Invesco ETF aims to mirror the total return of the Bloomberg MSCI USD Liquid Corporate Climate Transition ESG Bond Index (CTB), its "Reference Index," net of fees. Income from the fund is distributed to investors quarterly. The Reference Index comprises U.S. dollar-denominated, investment-grade, fixed-rate, taxable corporate debt. These securities are chosen and adjusted based on specific environmental, social, and governance (ESG) factors, and they must follow a decarbonization path that aligns with Climate Transition Benchmark (CTB) standards. Generally, bonds must have at least $1 billion in par amount outstanding, with a reduced threshold of $500 million for those issued by utilities. The index provider enforces strict exclusion criteria. Securities are ineligible if they: 1. Hold an MSCI ESG rating below BB. 2. Have been involved in very serious ESG controversies (including UN Global Compact breaches) or significant environmental disputes within the last three years. 3. Originate from an issuer not comprehensively covered by relevant MSCI ESG Research. 4. Are linked to certain business activities, as defined by the Bloomberg MSCI SRI methodology, including alcohol, adult entertainment, controversial or conventional weapons, gambling, fossil fuels, GMOs, firearms, nuclear weapons or power, oil sands, thermal coal (including hard coal and lignite), tobacco, and unconventional oil and gas. 5. Are issued by entities in emerging markets. After these exclusions, the Reference Index applies an optimization process to re-weight the remaining eligible bonds. This strategy seeks to minimize differences in the weightings of individual constituents, sectors, and industries compared to the Bloomberg USD Corporate Index (the "Parent Index"). Simultaneously, it aims to achieve two critical goals: meeting the minimum standards for EU Climate Transition Benchmarks and improving the MSCI ESG Score relative to the Parent Index. These optimization efforts are always subject to specific diversification constraints, as detailed in the Reference Index methodology. This ETF is passively managed. Its portfolio managers implement a sampling approach, employing advanced modeling tools to acquire and hold a representative portion of the index securities that reflect the full index's characteristics. This method aims to closely replicate the index's performance while minimizing the costs associated with full replication. Consequently, an investment in this fund represents the acquisition of units in a passively managed, index-tracking fund, rather than direct ownership of the underlying assets themselves.