Description

This Invesco ETF, tracking the utilities sector, aims to replicate the net total return performance of its benchmark, the S&P Select Sector Capped 20% Utilities Index, after accounting for management fees. This benchmark specifically comprises utilities companies from the S&P 500 Index. Each constituent within the index is weighted by its float-adjusted market capitalization, with a 19% individual cap; any excess weight is distributed among the remaining uncapped components. To achieve its objective, the fund primarily invests in a portfolio of equities. While these holdings are the main drivers of the fund's returns, they usually do not precisely mirror the securities in the Reference Index. The fund also utilizes unfunded swap agreements with approved counterparties. These contracts facilitate the exchange of the performance differential between the Reference Index and the fund's underlying equity basket. This synthetic replication method is designed to provide more accurate and consistent tracking of the Reference Index than would be possible through direct physical investment alone. Notably, although the fund's investment goal is to track the net total return index, the swap agreements reference an enhanced Withholding Tax (WHT) optimized version of the index. As a result, the ETF's performance before fees is expected to exceed the return of the standard net return index. This ETF employs a passive management approach, purely focused on index tracking. An investment in this fund represents an acquisition of units in an index-tracking vehicle, rather than direct ownership of the underlying assets held within the fund.