Description

The Invesco Financials S&P US Select Sector UCITS ETF Acc seeks to replicate the net total return performance of the S&P Select Sector Capped 20% Financials Index, after deducting all associated fees. This benchmark index specifically represents the financial companies contained within the broader S&P 500 Index. Constituents are weighted based on their free-float market capitalization, with a 19% maximum cap on any single holding; any excess weight is then distributed proportionally among the other uncapped constituents. To achieve its objective, the fund typically holds a diversified portfolio of equities, which are responsible for most of its returns but do not usually mirror the exact composition of the Reference Index. Additionally, the fund employs unfunded swaps, which are agreements with approved counterparties. These swaps facilitate the exchange of any performance difference between the fund's equity basket and the Reference Index. This dual strategy of holding physical assets alongside swaps aims for a closer and more consistent performance correlation with the Reference Index than might be possible through direct physical replication alone. It is important to note that while the fund's goal is to track the net total return index, the swaps are designed to reference an enhanced version that incorporates withholding tax benefits. As a result, the ETF's performance before fees is anticipated to exceed that of the standard net return index. This ETF is passively managed, meaning an investment constitutes the purchase of units in an index-tracking fund, not direct ownership of the underlying assets it holds.