‘Strategic’ ETF Family Launches

September 12, 2018

Today Invesco launched a new family of ETFs that focus on the quality and size factors. The funds, their tickers and expense ratios are as follows:

The ETFs all list on the Nasdaq stock market and track in-house indexes.

Methodology

The overall methodology targets companies in the designated universe that have been trading for at least a year, and scores them on business size and quality, using four and two criteria for each score, respectively.

For IUS, ISDX and ISEM, the methodology screens out all but the top 90% based on their size scores, and from there selects the top 80% of the remaining securities based on their quality scores. Companies are weighted based on their float-adjusted business size scores, the prospectus says.

As of the end of July, IUS’ index had 546 components, while ISDX’s index had 795 components selected from 24 developed-market countries. ISEM’s index tracked 380 companies selected from 22 emerging market countries, according to the document.

The small company funds, IUSS and ISDS—rather than selecting their constituents from the top 90% of companies based on business size scores—target the bottom 10% of companies, and from there select the top 80% based on quality scores, the prospectus notes.

Contact Heather Bell at [email protected]

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