Description

The Invesco Energy S&P US Select Sector UCITS ETF Acc endeavors to replicate the net total return performance of its designated benchmark, the S&P Select Sector Capped 20% Energy Index (referred to as the "Reference Index"), after accounting for its operational fees. This Reference Index specifically targets the energy sector constituents of the broader S&P 500 Index. Companies within the index are weighted by their float-adjusted market capitalization, with an individual holding limited to a 19% cap; any excess weight is then distributed proportionally among the remaining uncapped securities. To meet its objective, the fund primarily invests in a diversified portfolio of equities, which typically generates the bulk of its returns, though these holdings may not precisely mirror the Reference Index's composition. Additionally, the fund employs unfunded swap agreements. These contracts involve approved counterparties exchanging with the fund any difference in returns between the Reference Index and the fund's underlying equity basket. This dual strategy aims for a more accurate and consistent tracking of the Reference Index's performance than would be possible through physical asset replication alone. Significantly, the swaps reference an optimized Withholding Tax (WHT) version of the index. As a result, the ETF's performance before fees is expected to surpass that of a standard net return index. This ETF is passively managed, meaning an investment signifies the acquisition of units in an index-tracking fund, rather than direct ownership of the underlying securities.