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Improve your portfolio outcomes with Invesco Fixed Income

Improve your portfolio outcomes with Invesco Fixed Income

The Invesco US Treasury Bond 7-10 Year UCITS ETF aims to provide the total return performance of the Bloomberg U.S. Treasury 7-10 Year Total Return Index USD Unhedged (the "Reference Index"), less the impact of fees. The fund distributes income on a quarterly basis.

Here below you will find a comparative analysis between our Invesco US Treasury Bond 7-10 Year UCITS ETF Dist (TREX IM) and one of the most widely used products on this curve, namely the iShares IBTM IM.

Despite the two benchmarks being different – Bloomberg Barclays U.S. Treasury: 7-10 Year TR Index Value Unhedged USD for Invesco versus ICE U.S. Treasury 7-10 Year Bond Index 4PM for iShares – the products have similar specs, albeit with a significantly different tracking error (as shown in the table and in the chart).

Product  Ticker Mgmt Fee (p.a.) Total Return Relative Return Tracking Error
Invesco US Treasury 7-10 Year UCITS ETF TREX IM 0.06% 3.57% 0.02% 0.05%
Bloomberg Barclays U.S. Treasury: 7-10 Year TR Index Value Unhedged USD LT09TRUU Index   3.55% -   
iShares USD Treasury Bond 7-10yr UCITS ETF IBTM IM 0.07% 3.32% 0.00% 0.46%
ICE U.S. Treasury 7-10 Year Bond Index 4PM IDCOT74 Index 0.06% 3.32% -   

Data: Invesco, Bloomberg as of 29 December 2023. Past performance (actual or simulated) is not a reliable indicator of future returns. All performance numbers quoted are in USD. Index performance is calculated using last price, ETF performance is calculated using NAV (net of fees) assuming reinvestment of dividends.

Invesco US Treasury 7-10 Year UCITS ETF

Invesco US Treasury Bond 7-10 Year UCITS ETF Dist (TREX IM) has outperformed iShares IBTM IM both in absolute terms (3.57% vs 3.32%) and vs respective benchmark (+0.02% vs -0.00%)

This outperformance is primarily attributed to our securities lending activity. However, both products feature physical replication with a different securities lending program. Our program aims to reinvest 90% of the profits back into the ETF.

In addition, our unhedged product has a lower OCF compared to iShares (6bps vs 7bps) and lower TE mainly due to the fact that our PMs aligned the NAV methodology to match index treatment of accruals in April last year. Our performance has become smoother since then and our TE has improved slightly.

Attached, you will find the Tracking Error Comparison analysis from our Capital Market team regarding the two ETFs in question.

Tracking Error Comparison

Invesco US Treasury 7-10 Year UCITS ETF is available on Borsa Italiana:

ETF Products Ticker Base Ccy Mgmt  Fee (p.a.)
Invesco US Treasury Bond 7-10 Years UCITS ETF Dist (physical) TREX IM USD 0.06%
Invesco US Treasury Bond 7-10 Years UCITS ETF EUR Hdg Dist (physical) TRXE IM EUR 0.10%

  • For complete information on risks, refer to the legal documents.

    Value fluctuation: The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested.

    Credit Risk:  The creditworthiness of the debt the Fund is exposed to may weaken and result in fluctuations in the value of the Fund. There is no guarantee the issuers of debt will repay the interest and capital on the redemption date. The risk is higher when the Fund is exposed to high yield debt securities.

    Interest rates: Changes in interest rates will result in fluctuations in the value of the fund.

    Securities Lending: The Fund may be exposed to the risk of the borrower defaulting on its obligation to return the securities at the end of the loan period and of being unable to sell the collateral provided to it if the borrower defaults.

    Concentration: The Fund might be concentrated in a specific region or sector or be exposed to a limited number of positions, which might result in greater fluctuations in the value of the Fund than for a fund that is more diversified.

    Reinvestment Risk: The issuers of debt securities (especially those issued at high interest rates) may repay principal before the maturity of such debt securities. This may result in losses to the Fund on debt securities purchased at a premium.

    Applicable to currency-hedged ETFs:

    Currency hedging: Currency hedging may not completely eliminate the currency risk and may affect the performance.  ETFs are passive, or passively managed, or index tracking.

  • This marketing communication is for discussion purposes only and is exclusively for use by professional investors in Italy. It is not intended for and should not be distributed to, or relied upon, by the public.

    Data as at 31 December 2023, unless otherwise stated. By accepting this document you consent to communicating with us in English, unless you inform us otherwise. For more information on our funds and the relevant risks, please refer to the share class-specific Key Information Documents (available in local language), the Annual or Interim Reports, the Prospectus, and constituent documents, available from www.invesco.eu.

    A summary of investor rights is available in English from www.invescomanagementcompany.ie. The management company may terminate marketing arrangements. This document is marketing material and is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. This document should not be considered financial advice. Persons interested in acquiring the fund should inform themselves as to (i) the legal requirements in the countries of their nationality, residence, ordinary residence or domicile; (ii) any foreign exchange controls and (iii) any relevant tax consequences. Any calculations and charts set out herein are indicative only, make certain assumptions and no guarantee is given that future performance or results will reflect the information herein. For details on fees and other charges, please consult the prospectus, the KID and the supplement of each product. UCITS ETF’s units / shares purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units / shares on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units / shares and may receive less than the current net asset value when selling them.

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    The list of products listed in Italy, and the offering documents for and the supplement of each ETF are available: (i) at etf.invesco.com (along with the audited annual report and the unaudited half-year reports); and (ii) on the website of the Italian Stock Exchange borsaitaliana.it.

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    EMEA 3350597 - January 2024.