Alternatives Playbook
Our outlook, asset class views, and allocation guidance for private markets and liquid alternatives investments. It leverages our institutional investment expertise, deep resources, and global investment platform.
Q3 2025 alternatives outlook
As the second half of the year begins, a lot has happened since the optimism at the beginning of the year for growth from stimulative, pro-business policies, and a reduction in bureaucracy by the Department of Government Efficiency (DOGE). Policy uncertainty remains high. Tariff policy, and its fits and starts, has been disruptive and led to both stock and credit markets roundtrip. The “Big Beautiful Bill” was passed, extending the first Trump administration’s tax cuts. DOGE has been, for the most part, ineffective at meaningfully shrinking government spending, in our view. While there have been threats, Federal Reserve chairman Jerome Powell hasn’t been fired, despite keeping interest rates high. The dollar has had one of its weakest starts to a year — ever — and interest rates across the yield curve remain elevated. Many of former President Biden’s policies have been halted, including the Inflation Reduction Act, removing green infrastructure subsidies.
While policy uncertainty has slowed dealmaking, there’s hope that interest rates will follow the path of the dollar and animal spirits will prevail for the remainder of 2025. Trillions of stimulus from deficit spending has the potential to counteract some of the macroeconomic forces weighing on alternative investments, particularly on the equity side. Our view is for steady, albeit slowing, growth, and declining interest rates as the economy absorbs these forces. A weakening dollar is the path of least resistance. We’re sticking to our view that mindful allocations to private markets and liquid alternatives are appropriate tools to help investors navigate volatility, improve growth, enhance potential income, and diversify a portfolio.1
Asset class views
We remain neutral on how we’re allocating risk within our alternative’s portfolio, primarily due to the combined impact of high equity valuations with an elevated cost of financing. In general, we’re more bullish on the defensive parts of the alternative investment universe, favoring private debt, real assets, and hedged strategies versus private equity. Within asset classes, we look for those that don’t rely on leverage to generate returns, which we’ll reassess as base rates are lowered.
Private real assets outlook and positioning
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Private credit outlook and positioning
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Private equity outlook and positioning
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Hedge funds outlook and positioning
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Listed real assets and commodities
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Digital assets outlook and positioning
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Get an in-depth look at our alternatives Q3 outlook and positioning based on valuations, fundamentals, and secular trends.
Asset allocations to consider
Adding private market and liquid alternatives assets to an investment portfolio may be able to provide enhanced return potential2, volatility mitigation,2 diversification,1 and income potential.3 Advisors are looking to increase their allocation to alternatives according to research from Cerulli Associates, in partnership with the Investments & Wealth Institute (IWI).4 (See asset allocations below.)
Sample alternatives allocations
For those thinking about adding alternative investments to portfolios, consider our sample allocations. The actual allocations will vary based on a client's objectives, risk tolerance, comfort with illiquid investments, and how alternatives fit into their overall portfolio. We also provide suggestions on how to consider funding new alternatives allocations using traditional portfolio assets.
| Asset class | Sample allocation | Liquidity scale | Role in portfolio | Funding source | Related products |
|---|---|---|---|---|---|
| Private equity | 20 - 30% | Low | Growth | 100% equities | N/A |
| Private real assets | 20 - 30% | Low | Growth Income Diversification1 |
50% equities 50% fixed income |
Invesco Real Estate |
| Private credit | 20 - 30% | Low | Income Diversification1 |
30% equities 70% fixed income |
XCRTX |
| Hedge funds | 10 - 20% | Medium | Diversification1 | 100% fixed income | N/A |
| Listed real assets and commodities | 3 - 10% | High | Growth Income Diversification1 |
70% equities 30% fixed income |
PDBC MLPTX |
| Digital assets | 0 - 7% | High | Growth Diversification1 |
80% equities 20% fixed income |
BTCO QETH |
These sample allocations are recommended starting points for how to incorporate an asset class into an alternatives bucket. Of the 13.3% reported optimal allocation to alternatives, the above sample allocations provide percentages for allocating among the alternatives asset classes.
Get positioning for your equity and fixed income allocations in our monthly Portfolio Playbook.
Alternatives at Invesco
Diversify portfolios with public and private alternative assets to for enhanced return potential and to help mitigate risk.
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Private real assets outlook and positioning
Commercial real estate: We’re slightly increasing our exposure to real estate as our conviction for the outlook that valuations have bottomed is beginning to firm. The trend for core real estate equity performance is beginning to turn positive7 amid easing financial conditions, yet we remain vigilant given tight cap rates and a murky outlook from policymakers.
In North America, heightened political volatility and policy uncertainty have weighed heavily on business and consumer sentiment, increasing downside risks to growth. This translated into a slowdown in new investment activity, particularly in the residential and industrial sectors. While deals already in progress have largely held firm, investors are reassessing how to price risk in a more uncertain environment. Slower revenue growth expectations are prompting greater selectivity, with a focus on high cap rate sectors and stable income streams. Real estate credit continues to offer attractive relative value, though the gap with equity has narrowed.
Outside North America, macroeconomic conditions are mixed but improving, buoyed by inflows that may have been otherwise directed towards the US and a rapidly depreciating dollar. Inflation is moderating and monetary policy is easing in several regions , creating a more supportive backdrop for real estate. Capital markets remain cautious, but repricing is creating selective opportunities. Across Europe and Asia Pacific, long-term secular drivers such as demographic shifts, urbanization, and the growing demand for experiential and non-traditional real estate remain attractive. In this environment, disciplined execution, thematic alignment, and a focus on resilient sectors are key to navigating volatility and capturing value.
Infrastructure: We've elevated our view on infrastructure to become more bullish. It's because of the combined impact of improved valuations, which have corrected predictably with the rise in interest rates. Strong fundamentals and powerful secular tailwinds have been driven primarily by trends in the digital space and their follow-in impact on power generation and transmission infrastructure. The reversal of the Inflation Reduction Act may reduce some capital available for green infrastructure projects. But, the long-term trend should be supported by an expanding digital space and improvement in unit economics, which no longer require government subsidy for most projects. Energy transition funds have collected the vast majority of fundraising over the past decade, so it's no surprise that capital raising is limited in this environment. Data center and digital infrastructure power demands will likely continue from the artificial intelligence (AI) theme, so there's potential for extra capacity to come from oil and gas sectors. We're watching for potential impact on the transportation sector from any reduction in trade as a result of heightened tariffs.
Our view as of June 30, 2025.
Private credit outlook and positioning
Direct lending: While we remain encouraged by the strength of the US economy and the pro-business stance of the new administration, a more cautious and measured investment approach is warranted. New policy measures, such as tariffs and stricter immigration enforcement, could prove inflationary and slow growth. Although much anticipated mergers and acquisition (M&A)-related deal flow has yet to materialize for the direct lending market, pressure is building on private equity firms to transact and return capital to limited partners (LPs). As market volatility subsides, we’re watching for signs of renewed M&A activity. In the meantime, patient credit investors may continue to benefit from a favorable higher-for-longer rate environment.
Real asset debt: The start of Q1 2025 was characterized by increased competition and spread compression with bridge loan pricing compressing by approximately 20-25 basis points (bps) from Q4 2024.5 The end of Q1 2025, however, brought market volatility spurred largely by inflation data, Federal Reserve policy, and uncertainty around tariff policies. As a result, commercial mortgage-backed security (CMBS) spreads began to widen in early March with commercial real estate (CRE) collateralized loan obligation (CLO) AAA spreads out 25-35 bps by mid-to-late March. Banks followed suit on warehouse pricing but remained active in quoting new loan opportunities. Since then, spreads have compressed meaningfully as markets calmed and digested the series of tariff policies released by the administration. Additionally, while the Federal Reserve’s direction on interest rates is unclear, real estate debt tends to structure interest rate floors on every loan and requires borrowers to purchase interest rate caps, potentially insulating returns in the near-term from rate volatility.
Our view as of June 30, 2025.
Private equity outlook and positioning
We remain underweight private equity, especially traditional buyout strategies, which generally require leverage to generate returns. The combined impact of high equity valuations with an elevated cost of financing will be a significant headwind, in our view. While private market valuations in the growth equity and venture space have modestly corrected to become in-line with public markets, both are elevated relative to history. The familiar tale of limited distributions, aging portfolio companies, and a challenged mergers and acquisitions (M&A) environment persists for private equity (PE). Maturity walls are looming for the majority of PE funds with 55% entering the second half of their investment lifecycle; 26% are older than a decade.7 Fundraising has continued to slow, with 2025 trending to be the lowest year since 2020. Last year’s optimism for dealmaking has clearly faded due to trade policy uncertainty and rates remaining high. The rebound in public stock markets may lead to a reversal of the initial public offering (IPO) malaise. Elevated public market valuations certainly limit potential acquisitions and the high costs of financing raises the hurdle rate for dealmakers.
Our view as of June 30, 2025.
Hedge fund outlook and positioning
With low correlations to traditional assets9 and the possibility for higher-for-longer interest rates, we believe hedge funds are particularly attractive in today’s volatile markets. Since they operate off of a spread, elevated base rates may provide a generous tailwind. As stock markets only recently entered a technical correction, hedge funds with lower betas to market risk may be a valuable alternative within a portfolio, in our view10. Spreads within event-driven strategies remain high due to the limited capital markets activity from mergers and acquisitions (M&A) as private equity remains sidelined.
Our view as of June 30, 2025.
Listed real assets and commodities outlook and positioning
Listed real assets: Artificial intelligence (AI) and the Trump administration’s priority of securing domestic energy production are two major themes. While it’s too early to predict with any confidence, it’s clear that the volume of data center-linked natural gas demand will be material. This AI-driven emerging demand is in addition to the significant and predictable demand growth from the completion of numerous liquid and natural gas (LNG) export facilities and from other industries. In total, these trends could lead to 28–37 billion cubic feet per day (bcf/d) of additional demand by 2030, a 25%–34% increase8. While natural gas demand has experienced steady growth historically, the demand drivers have rarely been as visible as they are today.
Commodities: We believe commodities deserve a long-term allocation in portfolios given their diversification potential. The recent escalation in the Middle East is a testament to this. It’s extremely difficult to time commodity markets. Bullish events can happen rapidly and fiercely. Keeping a constant allocation can serve as a potential hedge, in our view. While investors have been quick to put tariffs in the rear-view mirror, we think there’s still a cautionary tale to tell. Even as a blueprint emerges for global tariff policies, there remains a significant amount of unpredictability. That includes the unignorable possibility that President Trump reverses course again if negotiations, especially with China, fall through. We believe that the drop in energy performance was overdone. The price reaction to tariffs and Organization of Petroleum Exporting Countries' (OPEC+) additional supplies was magnified by extreme investor angst. With historically high policy uncertainty, sentiment is likely to remain in the driver's seat, which we believe supports the case for commodities in a well-diversified investment portfolio.
Our view as of June 30, 2025.
Digital assets outlook and positioning
Digital assets enjoyed a strong second quarter, having benefitted from the "store of value" trade, which also benefitted traditional stores of value such as gold11. It continues to share characteristics of both gold and tech stocks, making its precise price drivers difficult to disentangle. Digital assets have seen renewed interest with the progress of the GENIUS12 Act in the US Congress, which establishes a regulatory framework for payment stablecoins13. It may bring further tailwinds to digital assets. We remain positive on digital assets and believe that falling policy uncertainty, continued adoption, and friendlier legislative and regulatory attitudes, can provide a positive backdrop for appreciation.
Our view as of June 30, 2025.
In general, liquid alternatives, such as commodities, hedge funds, listed real assets, and digitals assets, may make sense for investors who want exposure to alternatives, but still want to easily access this money. Private market assets, such as private credit, private equity, and private real assets, may make sense for investors willing to have less access in exchange for additional return potential, enhanced yield, and diversification. For some, a combination of liquid and private market assets can make sense.
Important information
NA4660237
A yield curve is the shape created by the levels of interest rates at various tenors of a specific fixed income asset.
A basis point is 1/100 of a percentage.
The opinions expressed are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.
Direct lending is represented by Cliffwater Direct Lending Index (CDLI), which seeks to measure the unlevered, gross of fee performance of US middle market corporate loans, as represented by the asset-weighted performance of the underlying assets of Business Development Companies (BDCs), including both exchange-traded and unlisted BDCs.
Private real estate debt is represented by Giliberto-Levy High-Yield Real Estate Debt Index (G-L 2), which measures total return and its components for many forms of high-yield commercial real estate (CRE) debt, such as high-yield commercial mortgage debt performance for high-yield loans, such as mezzanine loans, preferred equity, and B notes.
High yield is represented by Bloomberg US Corporate High Yield Bond Index, which measures the USD-denominated, high yield, fixed-rate corporate bond market
Senior loans are represented by Morningstar LSTA US Leveraged Loan 100 Index, which is designed to measure the performance of the 100 largest facilities in the US leveraged loan market.
Private real estate equity is represented by NCREIF Property Index (NPI) on the basis that it’s the broadest measure of private real estate index returns. The NPI is published by the National Council of Real Estate Investment Fiduciaries and is a quarterly, composite total return (based on appraisal values) for private commercial real estate properties held for investment purposes including fund expenses but excluding leverage and management and advisory fees. NCREIF data reflects the returns of a blended portfolio of institutional quality real estate and does not reflect the use of leverage or the impact of management and advisory fees.
Corporate bonds are represented by Bloomberg U.S. Corporate Value Unhedged USD Index, which measures the investment grade, fixed-rate, taxable corporate bond market. It includes USD denominated securities publicly issued by the US and non-US industrial, utility, and financial issuers.
Commercial mortgage backed securities (CMBS) are represented by Bloomberg US CMBS Investment Grade Index, which measures the market of US agency and US non-agency conduit and fusion CMBS deals with a minimum current deal size of $300 million.
Investment grade bonds are represented by Bloomberg US Aggregate Bond Index, an unmanaged index considered representative of the US investment-grade, fixed-rate bond market.
Treasuries are represented by Bloomberg U.S. Treasury Total Return Unhedged Index, which measures US dollar-denominated, fixed-rate, nominal debt issued by the US Treasury.
US equities are represented by S&P 500 Index, an unmanaged index of the 500 largest stocks, weighted by market capitalization and considered representative of the broader stock market.
An investment cannot be made into an index.
Liquidity scale: Low represents private assets that are non-tradable or are limited in their ability to be redeemed; medium represents a wide range where some funds may be non-traded, such as private hedge funds, while others may be significantly easier to redeem with lock-up periods that range from 2-10 months with a 14-70 day notice and a redemption period of 1-3 months; high represents assets or funds that are either traded or offer near instantaneous execution for sales and redemptions.
Funding source is for illustrative purposes only and is meant to be a general view of how an asset may be funded from portions of a traditional portfolio consisting of equities and fixed income. These percentages represent portions of the portfolio assets which have similar risk characteristics to that of the alternative asset.
Dry powder is the amount of capital that is committed to a private fund, but not yet deployed into deals or illiquid assets.
Base rates are represented by SOFR (Secured Overnight Financing Rate), which is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities.
The capitalization rate (or cap rate) is the rate of return that's expected to be generated on a real estate investment property.
Beta is a measure of risk representing how a security is expected to respond to general market movements.
Alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and additional risks from the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Bitcoins are considered a highly speculative investment due to their lack of guaranteed value and limited track record. Because of their digital nature, they pose risks from hackers, malware, fraud, and operational glitches. Bitcoins are not legal tender and are operated by a decentralized authority, unlike government-issued currencies. Bitcoin exchanges and bitcoin accounts are not backed or insured by any type of federal or government program or bank.
Bitcoin is a digital currency (also called cryptocurrency) that isn’t backed by any country's central bank or government. Bitcoins can be traded for goods or services with vendors who accept bitcoins as payment.
Commodities may subject an investor to greater volatility than traditional securities such as stocks and bonds and can fluctuate significantly based on weather, political, tax, and other regulatory and market developments.
In general, stock values fluctuate, sometimes widely, in response to activities specific to the company as well as general market, economic and political conditions.
Most MLPs operate in the energy sector and are subject to the risks generally applicable to companies in that sector, including commodity pricing risk, supply and demand risk, depletion risk and exploration risk. MLPs are also subject to the risk that regulatory or legislative changes could eliminate the tax benefits enjoyed by MLPs, which could have a negative impact on the after-tax income available for distribution by the MLPs and/or the value of the portfolio’s investments.
Investments in real estate-related instruments may be affected by economic, legal, or environmental factors that affect property values, rents, or occupancies of real estate. Real estate companies, including REITs or similar structures, tend to be small and mid-cap companies and their shares may be more volatile and less liquid.
Spread represents the difference between two values or asset returns.
A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest); ratings are subject to change without notice. NR indicates the debtor was not rated and should not be interpreted as indicating low quality. For more information on rating methodologies, please visit the following NRSRO websites: www.standardandpoors.com and select 'Understanding Credit Ratings' under Rating Resources 'About Ratings' on the homepage.; https://ratings.moodys.io/ratings and select 'Understanding Ratings' on the homepage.; www.fitchratings.com and select 'Ratings Definitions Criteria' under 'Resources' on the homepage. Then select 'Rating Definitions' under 'Resources' on the 'Contents' menu.
Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC)
There are risks involved with investing in ETFs, including possible loss of money. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Index. The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.
The Fund is subject to management risk because it is an actively managed portfolio. The investment techniques and risk analysis used by the portfolio managers may not produce the desired results.
Risks of futures contracts include: An imperfect correlation between the value of the futures contract and the underlying commodity; possible lack of a liquid secondary market; inability to close a futures contract when desired; losses due to unanticipated market movements; obligation for the Fund to make daily cash payments to maintain its required margin; failure to close a position may result in the Fund receiving an illiquid commodity; and unfavorable execution prices.
In pursuing its investment strategy, particularly when "rolling" futures contracts, the Fund may engage in frequent trading of its portfolio securities, resulting in a high portfolio turnover rate.
These comments should not be construed as recommendations, but as an illustration of broader themes. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations.
Commodity-linked notes may involve substantial risks, including risk of loss of a significant portion of principal and risks resulting from lack of a secondary trading market, temporary price distortions, and counterparty risk.
Swaps are subject to leveraging, liquidity, and counterparty risks, and therefore may be difficult to value. Adverse changes in the value or level of the swap can result in gains or losses that are substantially greater than invested, with the potential for unlimited loss.
Derivatives may be more volatile and less liquid than traditional investments and are subject to market, interest rate, credit, leverage, counterparty, and management risks. An investment in a derivative could lose more than the cash amount invested.
To qualify as a regulated investment company (RIC), the Fund must meet a qualifying income test each taxable year. Failure to comply with the test would have significant negative tax consequences for shareholders. The Fund believes that income from futures should be treated as qualifying income for purposes of this test, thus qualifying the Fund as a RIC. If the IRS were to determine that the Fund’s income is derived from the futures and did not constitute qualifying income, the Fund likely would be required to reduce its exposure to such investments in order to maintain its RIC status.
The Fund’s strategy of investing through its subsidiary in derivatives and other financially-linked instruments whose performance is expected to correspond to the commodity markets may cause the Fund to recognize more ordinary income. Particularly in periods of rising commodity values, the Fund may recognize higher-than-normal ordinary income. Investors should consult with their tax advisor and review all potential tax considerations when determining whether to invest.
Leverage created from borrowing or certain types of transactions or instruments may impair liquidity, cause positions to be liquidated at an unfavorable time, lose more than the amount invested, or increase volatility.
The Fund may hold illiquid securities that it may be unable to sell at the preferred time or price and could lose its entire investment in such securities.
The Fund currently intends to effect creations and redemptions principally for cash, rather than principally in-kind because of the nature of the Fund's investments. As such, investments in the Fund may be less tax efficient than investments in ETFs that create and redeem in-kind.
Invesco Dynamic Credit Opportunity Fund (XCRTX)
The Fund is a closed-end management investment company that is operated as an interval fund, and should be considered a speculative, long-term investment of limited liquidity that entails substantial risks, and you should only invest in the Fund if you can sustain a complete loss of your investment. As a result, you may receive little or no return on your investment or may lose part or all of your investment.
The Fund is suitable only for investors who can bear the risks associated with the Fund's limited liquidity. The Fund does not currently intend to list its shares for trading on any national securities exchange. The shares are, therefore, not readily marketable and no market is expected to develop. Liquidity for the shares will be provided only through quarterly repurchase offers between 5% and 25% of the shares at net asset value (NAV), and there's no guarantee that you will be able to sell all of the shares you desire to sell in the repurchase offer. As a result, you should consider an investment in the Fund to be of limited liquidity.
There is no assurance that annual distributions paid by the Fund will be maintained at the targeted level or that dividends will be paid at all. Although the Fund does not intend to use offering proceeds to fund distributions, the Fund's distributions may be funded from unlimited amounts of offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to the Fund for investment. Any capital returned to shareholders through distributions will be distributed after payment of fees and expenses.
Derivatives may be more volatile and less liquid than traditional investments and are subject to market, interest rate, credit, leverage, counterparty, and management risks. An investment in a derivative could lose more than the cash amount invested.
There are risks associated with borrowing or issuing preferred shares, including that the costs of the financial leverage exceed the income from investments made with such leverage, the higher volatility of the net asset value of the common shares, and that fluctuations in the interest rates on the borrowing or dividend rates on preferred shares may affect the yield and distributions to the common shareholders. Use of leverage also may impair the Fund's ability to maintain its qualification for federal income taxes as a regulated investment company.
The risks of investing in securities of foreign issuers, including emerging markets, can include fluctuations in foreign currencies, political and economic instability, and foreign taxation issues.
Junk bonds involve a greater risk of default or price changes due to changes in the issuer’s credit quality. The values of junk bonds fluctuate more than those of high quality bonds and can decline significantly over short time periods.
Leverage created from borrowing or certain types of transactions or instruments may impair the fund’s liquidity, cause it to liquidate positions at an unfavorable time, or lose more than it invested, increase volatility, or otherwise not achieve its intended objective.
The Fund is a closed-end investment company designed primarily for long-term investors and not as a trading vehicle. While there is no restriction on transferring the shares, the Fund does not intend to list the shares for trading on any national securities exchange. There is no secondary trading market for shares. An investment in the shares is illiquid. There is no guarantee that you will be able to sell all of the shares that you desire to sell in any repurchase offer by the Fund.
There is less readily available, reliable information about most senior loans than there is for many other types of securities. In addition, there is no minimum rating or other independent evaluation of a borrower or its securities limiting the Fund's investments, and the advisor relies primarily on its own evaluation of borrower credit quality rather than on any available independent sources.
Senior loans, like most other debt obligations, are subject to the risk of default. Default in the payment of interest or principal on a senior loan will result in a reduction in income to the Fund, a reduction in the value of the senior loan and a potential decrease in the Fund’s net asset value. The risk of default will increase in the event of an economic downturn or a substantial increase in interest rates.
The Fund is non-diversified and may experience greater volatility than a more diversified investment.
The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risks associated with an investment in the Fund.
Invesco Galaxy Bitcoin ETP
The Fund is speculative and involves a high degree of risk. An investor may lose all or substantially all of an investment in the Fund.
The Fund is not a mutual fund or any other type of Investment Company within the meaning of the Investment Company Act of 1940, as amended, and is not subject to regulation thereunder.
Shares in the Fund are not FDIC-insured, may lose value and have no bank guarantee.
This material must be accompanied or preceded by a prospectus. Please read the prospectus carefully before investing.
The Fund currently intends to effect creations and redemptions principally for cash, rather than principally in-kind because of the nature of the Fund's investments. As such, investments in the Fund may be less tax efficient than investments in ETFs that create and redeem in-kind.
Bitcoin has historically exhibited high price volatility relative to more traditional asset classes, which may be due to speculation regarding potential future appreciation in value. The value of the Trust’s investments in bitcoin could decline rapidly, including to zero.
The further development and acceptance of the bitcoin network, which is part of a new and rapidly changing industry, is subject to a variety of factors that are difficult to evaluate. The slowing, stopping, or reversing of the development or acceptance of the network may adversely affect the price of bitcoin and therefore an investment in the shares.
Currently, there is relatively limited use of bitcoin in the retail and commercial marketplace in comparison to relatively extensive use as a store of value, contributing to price volatility that could adversely affect an investment in the shares.
Regulatory changes or actions may alter the nature of an investment in bitcoin, restrict the use of bitcoin, the operations of the bitcoin network, or venues on which bitcoin trades. For example, it may become difficult or illegal to acquire, hold, sell, or use bitcoin in one or more countries, which could adversely impact the price of bitcoin.
The Trust’s returns will not match the performance of bitcoin because the Trust incurs the sponsor fee and may incur other expenses.
The market price of shares may reflect a discount or premium to the net asset value (NAV).
The price of bitcoin may be impacted by the behavior of a small number of influential individuals or companies.
Bitcoin faces scaling obstacles that can lead to high fees or slow transaction settlement times and attempts to increase the volume of transactions may not be effective.
Miners could act in collusion to raise transaction fees, which may affect the usage of the bitcoin network.
Competition from central bank digital currencies (CDBCs) and other digital assets could adversely affect the value of bitcoin and other digital assets.
Prices of bitcoin may be affected due to stablecoins, the activities of stablecoin users and their regulatory treatment.
The open-source structure of the bitcoin network protocol means that certain core developers and other contributors may not be directly compensated for their contributions in maintaining and developing the bitcoin network protocol. A failure to properly monitor and upgrade the bitcoin network protocol could damage the network.
Lack of clarity in the corporate governance of bitcoin may lead to ineffective decision-making that slows development or prevents the bitcoin network from overcoming important obstacles.
If the award of new bitcoin for solving blocks and transaction fees for recording transactions are not sufficiently high to incentivize miners, miners may reduce or cease processing power to solve blocks which could lead to confirmations on the Bitcoin blockchain being temporarily slowed. Significant delays in transaction confirmations could result in a loss of confidence in the bitcoin network, which could adversely affect an investment in the shares.
A temporary or permanent “fork” in the blockchain network could adversely affect an investment in the shares.
Flaws in the source code of bitcoin, or flaws in the underlying cryptography, could leave the bitcoin network vulnerable to a multitude of attack vectors.
A disruption of the internet may affect the use of bitcoin and subsequently the value of the shares.
Risks of over or under regulation in the digital asset ecosystem could stifle innovation, which could adversely impact the value of the shares.
Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940 (1940 Act) or the protections afforded by the Commodity Exchange Act (CEA).
Future regulations may require the Trust and the Sponsor to become registered, which may cause the Trust to liquidate.
The tax treatment of bitcoin and other digital assets is uncertain and may be adverse, which could adversely affect the value of an investment in the Shares.
Intellectual property rights claims may adversely affect the operation of the bitcoin network.
The venues through which bitcoin trades are relatively new and may be more exposed to operations problems or failure than trading venues for other assets.
Ownership of bitcoin is pseudonymous, and the supply of accessible bitcoin is unknown. Entities with substantial holdings in bitcoin may engage in large-scale sales or distributions, either on nonmarket terms or in the ordinary course, which could result in a reduction in in the price of bitcoin.
The Trust is subject to the risks due to its concentration in a single asset.
Bitcoin spot trading venues are not subject to the same regulatory oversight as traditional equity exchanges.
Bitcoin transactions are irrevocable and stolen or incorrectly transferred bitcoin may be irretrievable. As a result, any incorrectly executed bitcoin transactions could adversely affect an investment in the Trust.
QETH - Invesco Galaxy Ethereum ETF
The Fund is speculative and involves a high degree of risk. An investor may lose all or substantially all of an investment in the Fund.
The Fund is not a mutual fund or any other type of Investment Company within the meaning of the Investment Company Act of 1940, as amended, and is not subject to regulation thereunder.
Shares in the Fund are not FDIC-insured, may lose value, and have no bank guarantee.
This material must be accompanied or preceded by a prospectus. Please read the prospectus carefully before investing.
The Fund currently intends to effect creations and redemptions principally for cash, rather than principally in-kind because of the nature of the Fund's investments. As such,
investments in the Fund may be less tax efficient than investments in ETFs that create and redeem in-kind.
The Trust will not participate in the proof-of-stake validation mechanism of the Ethereum network (i.e., the Trust will not “stake” its ether) to earn additional ether or seek other means of generating income from its ether holdings.
Ether has historically exhibited high price volatility relative to more traditional asset classes, which may be due to speculation regarding potential future appreciation in value. The value of the Funds investments in bitcoin could decline rapidly, including to zero.
The further development and acceptance of the Ethereum network, which is part of a new and rapidly changing industry, is subject to a variety of factors that are difficult to evaluate. The slowing, stopping, or reversing of the development or acceptance of the network may adversely affect the price of ether and therefore an investment in the shares.
Currently, there is relatively limited use of ether in the retail and commercial marketplace in comparison to relatively extensive use as a store of value, contributing to price volatility that could adversely affect an investment in the shares.
Regulatory changes or actions may alter the nature of an investment in bitcoin or restrict the use of ether or the operations of the Ethereum network or venues on which bitcoin trades. For example, it may become difficult or illegal to acquire, hold, sell or use ether in one or more countries, which could adversely impact the price of ether.
In the past, flaws in the source code for ether have been discovered, including those that resulted in the theft of users’ ether. Several errors and defects have been publicly found and corrected, including those that disabled some functionality for users and exposed users’ personal information. Discovery of flaws in or exploitations of the source code that allow malicious actors to take or create money in contravention of known network rules has occurred.
The Funds returns will not match the performance of ether because the Trust incurs the Sponsor Fee and may incur other expenses.
The market price of shares may reflect a discount or premium to the net asset value (NAV).
The price of ether may be impacted by the behavior of a small number of influential individuals or companies.
The Ethereum network and ether face scaling obstacles that can lead to high fees or slow transaction settlement times and attempts to increase the volume of transactions may not be effective.
Competition from central bank digital currencies (CDBCs) and other digital assets could adversely affect the value of ether and other digital assets.
Prices of ether may be affected due to stablecoins, the activities of stablecoin users and their regulatory treatment.
A temporary or permanent “fork” in the Ethereum network could adversely affect an investment in the Shares.
A disruption of the internet may affect the use of Ethereum and subsequently the value of the shares.
Future regulations may require the Trust and the Sponsor to become registered, which may cause the Trust to liquidate.
The tax treatment of ether and other digital assets is uncertain and may be adverse, which could adversely affect the value of an investment in the shares.
The venues through which ether trades are relatively new and may be more exposed to operations problems or failure than trading venues for other assets.
The Funds is subject to the risks due to its concentration in a single asset.
Ether spot trading venues are not subject to the same regulatory oversight as traditional equity exchanges.
Ethereum transactions are irrevocable and stolen or incorrectly transferred bitcoin may be irretrievable. As a result, any incorrectly executed bitcoin transactions could adversely affect an investment in the Trust.
