ATLANTA, Dec. 22, 2020 /PRNewswire/ -- Invesco Ltd.
(NYSE: IVZ), a leading global provider of exchange-traded funds
(ETFs), announced today that it has launched its first suite of
active non-transparent ETFs. The four ETFs will leverage the unique
perspective and specialized expertise of Invesco's investment
professionals in a structure that retains many of the
characteristics that investors find attractive in an ETF structure,
including an effective arbitrage mechanism, tax
efficiency1 and intraday tradability2.
"Today's announcement is more than a product launch, it is
another step towards Invesco's goal to offer a range of innovative
investment products that help clients pursue their desired
outcomes," says Anna Paglia, Global
Head of ETFs and Indexed Strategies at Invesco. "Our four active
non-transparent ETFs offer a bridge between traditional active and
passive strategies3, harnessing the strength of
Invesco's active managers within an ETF wrapper."
The four new ETFs build on Invesco's legacy of innovation and
include the following active strategies in a
cost-effective4 structure:
Invesco Focused
Discovery Growth ETF (Ticker: IVDG)
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IVDG is
an actively managed ETF that seeks capital appreciation.
The ETF seeks to achieve its investment objective by investing
primarily in a concentrated portfolio of companies in the early
growth phase of their business cycle, typically marked by above
average growth rates. The ETF has a total expense ratio of
0.59%.
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Invesco Select
Growth ETF (Ticker: IVSG)
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IVSG is an actively managed ETF
that seeks long-term capital appreciation. The ETF seeks to achieve
its investment objective by primarily investing in a concentrated
portfolio of large and mid cap stocks with attractive growth
outlooks relative to their valuation at the time of purchase. The
ETF has a total expense ratio of 0.48%.
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Invesco Real
Assets ESG ETF (Ticker: IVRA)
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IVRA is
an actively managed ETF that seeks capital appreciation with a
secondary objective of current income. The ETF seeks to achieve its
investment objective by investing in real asset equities, including
real estate, infrastructure, natural resources and timber that meet
Invesco's proprietary environmental, social and governance (ESG)
standards. The ETF has a total expense ratio of 0.59%.
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Invesco US Large
Cap Core ESG ETF (Ticker: IVLC)
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IVLC is
an actively managed ETF that seeks capital appreciation. The ETF
seeks to achieve its investment objective by mainly investing in
larger-capitalization U.S. equities. Additionally, the ETF seeks to
achieve its investment objective by investing mainly in U.S.
companies that meet certain environmental, social and governance
("ESG") standards. The ETF has a total expense ratio of
0.48%.
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These ETFs are Different from traditional
ETFs.
Traditional ETFs tell the public what assets they hold
each day. These ETFs will not. This may create additional
risks for your investment. For example:
- You may have to pay more money to trade these ETF shares. These
ETFs will provide less information to traders, who tend to charge
more for trades when they have less information.
- The price you pay to buy ETF shares on an exchange may not
match the value of the ETF's portfolio. The same is true when you
sell shares. These price differences may be greater for these ETFs
compared to other ETFs because they provide less information to
traders.
- These additional risks may be even greater in bad or uncertain
market conditions.
- The ETFs will publish on its website each day a "Substitute
Basket" or "Tracking Basket" designed to help trading in shares of
the ETFs. While the Substitute Basket or Tracking Basket includes
some of the ETF's holdings, it is not the ETF's actual
portfolio.
The differences between these ETFs and other ETFs may also have
advantages. By keeping certain information about these ETFs secret,
these ETFs may face less risk that other traders can predict or
copy its investment strategy. This may improve the ETF's
performance. If other traders are able to copy or predict the ETF's
investment strategy, however, this may hurt the ETF's
performance.
For additional information regarding the unique attributes and
risks of these ETFs, see the Risk & Other Information section
below.
"Invesco's suite of ESG ETFs has one of the longest track
records in the ESG space5, and we are excited to expand
our offerings more broadly to include Invesco's first actively
managed ESG ETF strategies in the United
States," explains Paglia.
The new Invesco active non-transparent ETF suite will utilize
innovation from Invesco's proprietary active non-transparent ETF
model and Fidelity's active equity ETF methodology.
The Invesco active non-transparent model will publish key data
metrics each day by using a 'substitute basket' to offer a clear
view into each ETF's portfolio value, thus providing multiple
creation and redemption4 windows to authorized
participants throughout the day. The ETFs' holdings
will not be fully disclosed, thereby maintaining confidentiality of
the ETFs strategy and help mitigate the risk of front-running by
keeping a portion of the fund's holdings shielded from the
market.
Fidelity's active equity model will utilize a 'tracking basket'
methodology, which maintains the benefits of the ETF structure
while still providing information to market participants to promote
efficient trading of shares and preserve the ability to add value
through active management. This 'tracking basket' is disclosed
daily and is used to facilitate the creation and redemption
process.
Invesco has always been a pioneer in the active ETFs space. The
firm broke new ground when it obtained the first exemptive relief
for a transparent active ETF in 2008. Now, twelve years later,
active ETFs are growing more quickly than passive ETFs and over
half the ETFs launched in 2020 were actively
managed6.
The four new non-transparent active ETFs began trading today on
the Cboe BZX Exchange.
About Invesco Ltd.
Invesco is a global independent
investment management firm dedicated to delivering an investment
experience that helps people get more out of life. Our
distinctive investment teams deliver a comprehensive range of
active, passive and alternative investment capabilities. With
offices in 25 countries, Invesco managed $1.2 trillion in assets on behalf of clients
worldwide as of November 30,
2020. For more information, visit invesco.com.
Not a Deposit | Not FDIC Insured | Not
Guaranteed by the Bank | May Lose Value |
Not Insured by any Federal Government Agency
1 The tax advantages of investing in Shares may be less pronounced
than passive ETFs because the Funds are actively managed and,
therefore, may have greater turnover in their portfolio securities,
which could result in less tax efficiency than an investment in a
fund that is not actively managed. Invesco does not offer tax
advice. Please consult your tax professional for information
regarding your own personal tax situation.
2 Shares are not individually redeemable and owners of the Shares
may acquire those Shares from the Fund and tender those Shares for
redemption to the Fund in Creation Unit aggregations only,
typically consisting of 10,000 Shares.
3 As with any comparison, investors should be aware of the material
differences between active and passive strategies. Unlike passive
strategies, active strategies have the ability to react to market
changes and the potential to outperform a stated benchmark. Other
differences include, but are not limited to, expenses, management
style and liquidity. Investors should consult their financial
professional before investing.
4 Since ordinary brokerage commissions apply for each buy and sell
transaction, frequent trading activity may increase the cost of
ETFs.
5 As of November 30, 2020
6 FactSet, June 30, 2020. There are
risks involved with investing in ETFs, including possible loss of
money. Index-based ETFs are not actively managed. Actively managed
ETFs do not necessarily seek to replicate the performance of a
specified index. Both index-based and actively managed ETFs are
subject to risks similar to stocks, including those related to
short selling and margin maintenance.
Risk and Other Information
ETFs trade like stocks,
fluctuate in market value and may trade at prices above or below
the ETF's net asset value. Brokerage commissions and ETF expenses
will reduce returns.
ETF shares may be bought or sold throughout the day at their
market price, not their Net Asset Value (NAV), on the exchange on
which they are listed. Shares of ETFs are tradable on secondary
markets and may trade either at a premium or a discount to their
NAV on the secondary market.
Because the Shares are traded in the secondary market, a Broker
may charge a commission to execute a transaction in Shares, and an
investor also may incur the cost of the spread between the price at
which a dealer will buy Shares and the somewhat higher price at
which a dealer will sell Shares.
The objective of the actively managed ETF Substitute Basket or
Tracking Basket is to construct a portfolio of stocks and
representative index ETFs that tracks the daily performance of an
actively managed ETF without exposing current holdings, trading
activities, or internal equity research. The Substitute Basket or
Tracking Basket is designed to conceal any nonpublic information
about the underlying portfolio and only uses the Funds latest
publicly disclosed holdings, representative ETFs, and the publicly
known daily performance in its construction. You can gain access to
the Substitute Basket or Tracking Basket and the Basket Overlap or
Tracking Basket Weight Overlap on invesco.com/etfs.
The Substitute Basket is designed to closely track the daily
performance of the Fund but is not the Fund's actual portfolio. The
Substitute Basket often will include a significant percentage of
the securities held in the Fund's portfolio, but it will exclude
(or modify the weightings of) certain securities held in the Fund's
portfolio, such as those securities that the Fund's portfolio
managers are actively looking to purchase or sell, or securities
which, if disclosed, could increase the risk of front-running or
free-riding. The Substitute Basket may also include cash.
The Tracking Basket is designed to closely track the daily
performance of the Fund but is not the Fund's actual portfolio. The
Tracking Basket is comprised of: (1) select recently disclosed
portfolio holdings (Strategy Components); (2) liquid ETFs that
convey information about the types of instruments (that are not
otherwise fully represented by the Strategy Components) in which
the Fund invests; and (3) cash and cash equivalents.
Although the Substitute Basket or Tracking Basket is intended to
provide investors with enough information to allow for an effective
arbitrage mechanism that will keep the market price of the Fund at
or close to the underlying NAV per Share of the Fund, there is a
risk (which may increase during periods of market disruption or
volatility) that market prices will vary significantly from the
underlying NAV of the Fund; ETFs trading on the basis of a
Substitute Basket or Tracking Basket may trade at a wider bid/ask
spread than ETFs that publish their portfolios on a daily basis,
especially during periods of market disruption or volatility, and
therefore, may cost investors more to trade; and although the Fund
seeks to benefit from keeping its portfolio information secret,
market participants may attempt to use the Substitute Basket or
Tracking Basket to identify a Fund's trading strategy, which if
successful, could result in such market participants engaging in
certain predatory trading practices that may have the potential to
harm the Fund and its shareholders.
About Risk:
In general, equity values fluctuate,
sometimes widely, in response to activities specific to the company
as well as general market, economic and political conditions.
The risks of investing in securities of foreign issuers,
including emerging market issuers, can include fluctuations in
foreign currencies, political and economic instability, and foreign
taxation issues.
The investment techniques and risk analysis used by the
portfolio managers may not produce the desired results.
The Fund is non-diversified and may experience greater
volatility than a more diversified investment.
Active trading results in added expenses and may result in a
lower return and increased tax liability.
From time to time, certain shareholders may own a substantial
amount of the shares in the Fund or invest and hold their shares
for a limited time solely to facilitate commencement of the Fund or
to achieve a specified size or scale in the Fund. Redemptions by
large shareholders could have a significant negative impact on the
Fund. Large cash purchases, if allowed, may adversely affect the
Fund's performance since it would delay the Fund from investing in
new cash, requiring it to maintain a larger cash position than
normal. Transactions by large shareholders may account for a large
percentage of the trading volume and may, therefore, have a
material upward or downward effect on the market price of the
Shares. The Fund may hold a relatively large proportion of its
assets in cash in anticipation of large redemptions, diluting its
investment returns.
There may be circumstances where a security held in the Fund but
not the Substitute Basket or Tracking Basket does not have readily
available market quotations. If determined that such circumstance
may affect the reliability of the Substitute Basket or Tracking
Basket as an arbitrage vehicle; that information, along with the
identity and weighting of that security in the Fund's portfolio,
will be publicly disclosed on the Fund's website and the
appropriate remedial measures will be assessed by the Adviser.
During these times, market participants may use this information to
engage in certain predatory trading practices that may harm the
Fund and its shareholders. If 10% of the Fund's securities in the
portfolio do not have readily available market quotations, a prompt
request to halt trading on the Fund would be made to the Exchange,
meaning that investors would not be able to trade the Shares.
Shares traded on the Exchange may be halted due to market
conditions or for reasons that, in the view of the Exchange, make
trading in Shares inadvisable or extraordinary market volatility.
There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be
met or will remain unchanged.
Invesco Focused Discovery Growth ETF (IVDG) & Invesco
Select Growth ETF (IVSG)
Growth stocks tend to be more
sensitive to changes in their earnings and can be more
volatile.
Stocks of medium-sized companies tend to be more vulnerable to
adverse developments, may be more volatile, and may be illiquid or
restricted as to resale.
Invesco Real Assets ESG ETF (IVRA) & Invesco US Large Cap
Core ESG ETF (IVLC)
Stocks of companies with favorable ESG
attributes may underperform the market as a whole. As a result, the
Fund may underperform other funds that do not screen companies
based on ESG attributes. The criteria used to select companies for
investment may result in the Fund investing in securities,
industries or sectors that underperform the market as a whole or
underperform other funds screened for ESG standards.
Invesco Real Assets ESG ETF (IVRA)
Investments in
real assets companies may involve a higher degree of risk,
including significant financial, operating, and competitive risks,
and may expose the Fund to adverse macroeconomic conditions, such
as changes and volatility in commodity prices, a rise in interest
rates or a downturn in the economy in which the asset is located,
elevating the risk of loss.
Stocks of small and mid-sized companies tend to be more
vulnerable to adverse developments, may be more volatile, and may
be illiquid or restricted as to resale.
Invesco US Large Cap Core ESG ETF (IVLC)
Growth stocks
tend to be more sensitive to changes in their earnings and can be
more volatile.
A value style of investing is subject to the risk that the
valuations never improve or that the returns will trail other
styles of investing or the overall stock markets.
The Funds are subject to certain other risks. Please see the
current prospectus for more information regarding the risk
associated with an investment in the Funds.
Invesco is not affiliated with Fidelity or the CBOE BZX
Exchange.
The opinions expressed are those of the speaker, are based on
current market conditions and are subject to change without notice.
These opinions may differ from those of other Invesco investment
professionals.
This does not constitute a recommendation of any investment
strategy or product for a particular investor. Investors should
consult a financial professional before making any investment
decisions.
No products or investment vehicles offered by INVESCO are
sponsored, endorsed, sold, or promoted by FIDELITY or any of its
affiliates.
Before investing, investors should carefully read the
prospectus/summary prospectus and carefully consider the investment
objectives, risks, charges and expenses. For this and more complete
information about the Fund call 800 983 0903 or visit invesco.com
for the prospectus/summary prospectus.
Invesco Distributors, Inc. is the US distributor for Invesco's
retail products and private placements. It's an indirect, wholly
owned subsidiary of Invesco Ltd. 12/20
Contact: Stephanie Diiorio,
212.278.9037, stephanie.diiorio@invesco.com
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SOURCE Invesco Ltd.