Fixed Income | US Fixed Income

Invesco High Yield Bond Factor ETF

Ticker: IHYF

Product Details

The Invesco High Yield Bond Factor ETF (Fund) is an actively managed exchange-traded fund (ETF) that seeks total return by investing, at least 80% of its net assets¬† in high-yield, below-investment grade, fixed-income securities, and in derivatives and other instruments that have economic characteristics similar to such securities. The Fund utilizes a factor-based strategy that seeks to outperform the Fund’s market-weighted benchmark index by systematically targeting securities in the benchmark index exhibiting quantifiable issuer characteristics (or “factors”) that the investment team believes will have higher returns than other fixed income securities with comparable characteristics over market cycles.

as of 02/28/2023 12/31/2022

Performance

Index History (%) YTD 1Yr 3Yr 5Yr 10Yr Since Inception
Bloomberg US Corporate High Yield 2% Issuer Capped Total Return Index 2.48 -5.45 1.32 2.85 4.09 -1.22
Fund History (%)
Fund NAV 2.76 -6.43 N/A N/A N/A -1.78
After Tax Held 2.31 -8.62 N/A N/A N/A -3.77
After Tax Sold 1.63 -3.83 N/A N/A N/A -2.14
Fund Market Price 3.24 -6.29 N/A N/A N/A -1.75
Index History (%) YTD 1Yr 3Yr 5Yr 10Yr Since Inception
Bloomberg US Corporate High Yield 2% Issuer Capped Total Return Index -11.18 -11.18 0.03 2.30 4.03 -2.48
Fund History (%)
Fund NAV -11.86 -11.86 N/A N/A N/A -3.20
After Tax Held -13.93 -13.93 N/A N/A N/A -5.20
After Tax Sold -6.99 -6.99 N/A N/A N/A -3.19
Fund Market Price -12.16 -12.16 N/A N/A N/A -3.38

This is a new Fund and has no full-year Fund performance to report as of most recent quarter end.

Market returns are based on the midpoint of the bid/ask spread at 4 p.m. ET and do not represent the returns an investor would receive if shares were traded at other times. Performance data quoted represents past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than performance data quoted. After-tax returns reflect the highest federal income tax rate but exclude state and local taxes. Fund performance reflects applicable fee waivers, absent which, performance data quoted would have been lower. After Tax Held and After Tax Sold are based on NAV. Returns less than one year are cumulative.

An investor cannot invest directly in an index. The results assume that no cash was added to or assets withdrawn from the Index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.

as of 12/31/2022

Growth of $10,000

Data beginning 10 years prior to the ending date of 12/31/2022. Fund performance shown at NAV.

An investor cannot invest directly in an index. The results assume that no cash was added to or assets withdrawn from the Index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.

as of 07/08/2021

Market Cap & Style Allocations

Large-Cap Value 100.00%
Large-Cap Blend -
Large-Cap Growth -
Mid-Cap Value -
Mid-Cap Blend -
Mid-Cap Growth -
Small-Cap Value -
Small-Cap Blend -
Small-Cap Growth -

Quality Allocations as of 03/24/2023

S&P Moody's
AAA : 0% Aaa : 0%
AA : 0% Aa : 0%
BBB : 2% Baa : 6%
BB : 57% Ba : 42%
B : 34% B : 44%
CCC : 5% Caa : 6%
Not Rated : 6% Not Rated : 5%

Cash is excluded from the credit rating quality allocations table.

as of 03/24/2023

Maturity

Years % of Fund
0 - 1 years 4.69
1 - 5 years 59.75
5 - 10 years 32.25
10 - 15 years 0.80
15 - 20 years 1.38
20 - 25 years 0.17
25 years and over 0.96

as of 03/24/2023 Top Fixed-Income Holdings | View All

Holding Name Coupon Rate Maturity Date Next Call Date S&P / Moody's Rating† Weight
CBOT 10 Year US Treasury Note N/A 06/21/2023 N/A NR/NR 4.81%
CBOT 5 Year US Treasury Note N/A 06/30/2023 N/A NR/NR 2.94%
Ultra 10-Year US Treasury Note Futures N/A 06/21/2023 N/A NR/NR 1.45%
TransDigm Inc 6.25% 03/15/2026 04/24/2023 B+/Ba3 0.80%
CBOT US Treasure Bond Futures N/A 06/21/2023 N/A NR/NR 0.78%
Carnival Corp 5.75% 03/01/2027 12/01/2026 B/B3 0.67%
Directv Financing LLC / Directv Financing Co-Obligor Inc 5.88% 08/15/2027 08/15/2023 BB/Ba3 0.63%
Sprint LLC 7.62% 02/15/2025 11/15/2024 BB+/Baa3 0.61%
Jaguar Land Rover Automotive PLC 7.75% 10/15/2025 04/24/2023 B+/B1 0.60%
Drax Finco PLC 6.62% 11/01/2025 04/04/2023 BB+/NR 0.59%

Holdings are subject to change and are not buy/sell recommendations.

as of 03/24/2023 Summary Holdings | View All

Fund Holdings subject to change

Investment Long / Short % of Net Assets
Communication Services Long 12.14
Consumer Discretionary Long 19.85
Consumer Staples Long 2.28
Derivatives Long 10.40
Derivatives Short -7.38
Energy Long 12.01
Financials Long 9.54
Financials Short -0.84
Health Care Long 6.05
Industrials Long 11.69
Information Technology Long 5.28
Materials Long 7.52
Real Estate Long 3.77
Telecommunication Services Long 3.63
U.S. Government Securities Long 0.34
UnClassified Long 0.22
Utilities Long 3.49
Collateral Long / Short % of Net Assets
No holdings available

as of 03/24/2023 Holdings | View All

Fund Holdings subject to change

Futures % of Net Assets
No holdings available
Swaps % of Net Assets
No holdings available

Collateral % of Net Assets
CBOT 10 Year US Treasury Note 4.81
CBOT 5 Year US Treasury Note 2.94
Ford Motor Credit Co LLC 1.69
Ultra 10-Year US Treasury Note Futures 1.45
CHS/Community Health Systems Inc 1.29
DISH DBS Corp 1.22
Carnival Corp 1.14
Ardagh Packaging Finance PLC / Ardagh Holdings USA Inc 1.14
LCPR Senior Secured Financing DAC 1.06
CSC Holdings LLC 0.98
Sprint LLC 0.94
Seagate HDD Cayman 0.94
Standard Industries Inc/NJ 0.93
Hilcorp Energy I LP / Hilcorp Finance Co 0.89
New Fortress Energy Inc 0.84
Navient Corp 0.81
TransDigm Inc 0.80
Service Properties Trust 0.80
EQM Midstream Partners LP 0.80
Las Vegas Sands Corp 0.79
CBOT US Treasure Bond Futures 0.78
Occidental Petroleum Corp 0.78
NRG Energy Inc 0.76
Rockies Express Pipeline LLC 0.76
Mineral Resources Ltd 0.72
United Wholesale Mortgage LLC 0.68
Tallgrass Energy Partners LP / Tallgrass Energy Finance Corp 0.65
MPT Operating Partnership LP / MPT Finance Corp 0.64
Directv Financing LLC / Directv Financing Co-Obligor Inc 0.63
Bausch Health Cos Inc 0.63
Crescent Energy Finance LLC 0.61
OneMain Finance Corp 0.60
Jaguar Land Rover Automotive PLC 0.60
Drax Finco PLC 0.59
Nordstrom Inc 0.59
Rakuten Group Inc 0.59
Tenet Healthcare Corp 0.59
ASG Finance Designated Activity Co 0.59
Telecom Italia SpA/Milano 0.59
Commerzbank AG 0.57
Banijay Entertainment SASU 0.57
Macy's Retail Holdings LLC 0.57
Connect Finco SARL / Connect US Finco LLC 0.57
Telenet Finance Luxembourg Notes Sarl 0.56
Travel + Leisure Co 0.56
Gen Digital Inc 0.56
ZF North America Capital Inc 0.56
TEGNA Inc 0.54
IHO Verwaltungs GmbH 0.53
AmeriGas Partners LP / AmeriGas Finance Corp 0.53
JELD-WEN Inc 0.53
CCO Holdings LLC / CCO Holdings Capital Corp 0.53
Pitney Bowes Inc 0.53
Albion Financing 2SARL 0.53
Newell Brands Inc 0.52
C&S Group Enterprises LLC 0.52
EnfraGen Energia Sur SA / EnfraGen Spain SA / Prime Energia 0.51
Howmet Aerospace Inc 0.51
Affinity Interactive 0.50
US Acute Care Solutions LLC 0.50
Masonite International Corp 0.50
Bath & Body Works Inc 0.50
Iron Mountain Inc 0.50
Builders FirstSource Inc 0.49
Melco Resorts Finance Ltd 0.49
Premier Entertainment Sub LLC / Premier Entertainment Financ 0.49
WPX Energy Inc 0.48
Midcap Financial Issuer Trust 0.48
LGI Homes Inc 0.47
Altice Financing SA 0.47
Enstar Finance LLC 0.47
Sands China Ltd 0.46
Cinemark USA Inc 0.45
Viasat Inc 0.45
Office Properties Income Trust 0.45
Resorts World Las Vegas LLC / RWLV Capital Inc 0.45
Open Text Holdings Inc 0.45
Staples Inc 0.45
Abercrombie & Fitch Management Co 0.45
Avient Corp 0.44
Netflix Inc 0.43
Delta Air Lines Inc 0.43
Lumen Technologies Inc 0.43
Chemours Co/The 0.42
Imola Merger Corp 0.42
Scientific Games Holdings LP/Scientific Games US FinCo Inc 0.42
Ultra U.S. Treasury Bond Futures 0.42
Intesa Sanpaolo SpA 0.42
AdaptHealth LLC 0.42
EnLink Midstream Partners LP 0.42
Parkland Corp 0.41
American Airlines Inc 0.41
ACCO Brands Corp 0.41
PRA Group Inc 0.41
Frontier North Inc 0.41
Carnival Holdings Bermuda Ltd 0.41
American Airlines Inc/AAdvantage Loyalty IP Ltd 0.41
NGL Energy Operating LLC / NGL Energy Finance Corp 0.41
CoreCivic Inc 0.40
Global Atlantic Fin Co 0.40
AMN Healthcare Inc 0.40
NCL Corp Ltd 0.40
Chart Industries Inc 0.40
Aramark Services Inc 0.40
Likewize Corp 0.39
DISH Network Corp 0.39
Sirius XM Radio Inc 0.39
Brookfield Property REIT Inc / BPR Cumulus LLC / BPR Nimbus 0.39
Allegiant Travel Co 0.39
NuStar Logistics LP 0.39
Enviva Partners LP / Enviva Partners Finance Corp 0.38
MPH Acquisition Holdings LLC 0.38
Veritas US Inc / Veritas Bermuda Ltd 0.38
Xerox Holdings Corp 0.37
Royal Caribbean Cruises Ltd 0.37
Comstock Resources Inc 0.35
Caesars Resort Collection LLC / CRC Finco Inc 0.35
Prime Security Services Borrower LLC / Prime Finance Inc 0.35
Neptune Bidco US Inc 0.35
WESCO Distribution Inc 0.35
Methanex Corp 0.35
Coinbase Global Inc 0.35
AMC Networks Inc 0.35
PM General Purchaser LLC 0.34
Rayonier AM Products Inc 0.34
United States Treasury Bill 0.34
Gap Inc/The 0.34
Tri Pointe Homes Inc 0.33
Koppers Inc 0.33
Grand Canyon University 0.33
Vista Outdoor Inc 0.33
Specialty Building Products Holdings LLC / SBP Finance Corp 0.33
Level 3 Financing Inc 0.33
Windstream Escrow LLC / Windstream Escrow Finance Corp 0.33
Under Armour Inc 0.33
Scripps Escrow II Inc 0.33
Domtar Corp 0.32
Cleveland-Cliffs Inc 0.32
AthenaHealth Group Inc 0.32
Infrabuild Australia Pty Ltd 0.31
Buckeye Partners LP 0.31
Sabre GLBL Inc 0.31
Sealed Air Corp 0.30
Summit Midstream Holdings LLC / Summit Midstream Finance Cor 0.30
CVR Energy Inc 0.30
NFP Corp 0.30
LSF9 Atlantis Holdings LLC / Victra Finance Corp 0.29
United Natural Foods Inc 0.29
Advantage Sales & Marketing Inc 0.29
Varex Imaging Corp 0.29
Trinity Industries Inc 0.29
Vital Energy Inc 0.29
Sunnova Energy Corp 0.29
Paramount Global 0.28
iHeartCommunications Inc 0.28
Moss Creek Resources Holdings Inc 0.28
ModivCare Inc 0.28
Hawaiian Brand Intellectual Property Ltd / HawaiianMiles Loy 0.28
Necessity Retail REIT Inc/The / American Finance Operating P 0.28
Algonquin Power & Utilities Corp 0.27
Vector Group Ltd 0.27
Owens & Minor Inc 0.27
Legacy LifePoint Health LLC 0.27
Herbalife Nutrition Ltd / HLF Financing Inc 0.27
USA Compression Partners LP / USA Compression Finance Corp 0.27
United Airlines Inc 0.26
Oceaneering International Inc 0.26
Southwestern Energy Co 0.26
Ally Financial Inc 0.26
SunCoke Energy Inc 0.26
QVC Inc 0.25
Kaiser Aluminum Corp 0.25
G-III Apparel Group Ltd 0.25
AG Issuer LLC 0.25
NMI Holdings Inc 0.24
Harvest Midstream I LP 0.24
1375209 BC Ltd 0.23
Berry Global Inc 0.23
Taylor Morrison Communities Inc 0.23
ITT Holdings LLC 0.23
Hanesbrands Inc 0.23
Enact Holdings Inc 0.23
PDC Energy Inc 0.23
HLF Financing Sarl LLC / Herbalife International Inc 0.23
Ladder Capital Finance Holdings LLLP / Ladder Capital Financ 0.23
Hughes Satellite Systems Corp 0.22
New Home Co Inc/The 0.22
Brookfield Residential Properties Inc / Brookfield Residenti 0.22
Fortress Transportation and Infrastructure Investors LLC 0.22
Eco Material Technologies Inc 0.22
Credit Acceptance Corp 0.22
Murphy Oil Corp 0.22
Zayo Group Holdings Inc 0.22
WR Grace Holdings LLC 0.22
Tempur Sealy International Inc 0.22
Qwest Corp 0.21
Vail Resorts Inc 0.21
Ball Corp 0.21
Univision Communications Inc 0.21
HAT Holdings I LLC / HAT Holdings II LLC 0.21
Northriver Midstream Finance LP 0.21
Shea Homes LP / Shea Homes Funding Corp 0.21
SBA Communications Corp 0.20
Prime Healthcare Services Inc 0.20
Spirit AeroSystems Inc 0.20
Radiate Holdco LLC / Radiate Finance Inc 0.20
Six Flags Theme Parks Inc 0.20
Videotron Ltd 0.20
Dana Inc 0.20
Glatfelter Corp 0.20
Camelot Return Merger Sub Inc 0.19
Ferrellgas LP / Ferrellgas Finance Corp 0.19
Cornerstone Building Brands Inc 0.19
Starwood Property Trust Inc 0.19
Seaspan Corp 0.19
Albertsons Cos Inc / Safeway Inc / New Albertsons LP / Alber 0.18
Evergreen Acqco 1 LP / TVI Inc 0.18
CoreLogic Inc 0.18
Titan International Inc 0.18
Urban One Inc 0.18
JPW Industries Holding Corp 0.18
Kohl's Corp 0.17
Rand Parent LLC 0.17
Xerox Corp 0.17
Harsco Corp 0.17
Midland Cogeneration Venture LP 0.17
Realogy Group LLC / Realogy Co-Issuer Corp 0.17
Mohegan Tribal Gaming Authority 0.17
Elanco Animal Health Inc 0.17
McAfee Corp 0.16
Foot Locker Inc 0.16
Blue Racer Midstream LLC / Blue Racer Finance Corp 0.16
Brightsphere Investment Group Inc 0.16
Icahn Enterprises LP / Icahn Enterprises Finance Corp 0.15
US Foods Inc 0.15
Goodyear Tire & Rubber Co/The 0.15
Trinseo Materials Operating SCA / Trinseo Materials Finance 0.15
CD&R Smokey Buyer Inc 0.15
Cedar Fair LP / Canada's Wonderland Co / Magnum Management C 0.14
Sizzling Platter LLC / Sizzling Platter Finance Corp 0.14
CNX Resources Corp 0.14
FS Energy and Power Fund 0.14
Five Point Operating Co LP / Five Point Capital Corp 0.14
AECOM 0.14
Gannett Holdings LLC 0.13
Millennium Escrow Corp 0.13
Cloud Software Group Holdings Inc 0.13
Rocket Mortgage LLC / Rocket Mortgage Co-Issuer Inc 0.13
Coty Inc 0.13
Manitowoc Co Inc/The 0.12
Crown Americas LLC / Crown Americas Capital Corp VI 0.12
Intelligent Packaging Ltd Finco Inc / Intelligent Packaging 0.12
Lions Gate Capital Holdings LLC 0.12
Cogent Communications Group Inc 0.12
Caesars Entertainment Inc 0.12
Consolidated Communications Inc 0.12
Photo Holdings Merger Sub Inc 0.11
Western Midstream Operating LP 0.11
Block Inc 0.11
Clarios Global LP / Clarios US Finance Co 0.11
CommScope Technologies LLC 0.11
Sonic Automotive Inc 0.11
MGM Resorts International 0.11
PBF Holding Co LLC / PBF Finance Corp 0.10
Unisys Corp 0.10
Strathcona Resources Ltd/Alberta 0.09
Cumulus Media New Holdings Inc 0.09
P&L Development LLC / PLD Finance Corp 0.08
Stericycle Inc 0.08
Liberty Interactive LLC 0.08
StoneX Group Inc 0.08
Mauser Packaging Solutions Holding Co 0.07
TripAdvisor Inc 0.07
TreeHouse Foods Inc 0.07
American Airlines 2016-1 Class A Pass Through Trust 0.07
RegionalCare Hospital Partners Holdings Inc / LifePoint Heal 0.06
Ritchie Bros Holdings Inc 0.05
Ligado Networks LLC 0.03
American Airlines 2014-1 Class A Pass Through Trust 0.03
Global Medical Response Inc 0.02
TEEKAY OFFSHORE PARTNERS LP / TEEKAY OFFSHORE FINANCE CORP 0.01
Endo Dac / Endo Finance LLC / Endo Finco Inc 0.01
Diamond Sports Group LLC / Diamond Sports Finance Co -
Intercontinental Exchange Inc -
CBOT 2 Year US Treasury Note Future -

A negative in Cash or Other, as of the date shown, is normally due to fund activity that has accrued or is pending settlement.

The characterizations of distributions reflected in this table are as of the date noted below. The actual amounts of income, capital gains and return of capital for tax purposes are only determined after the Fund’s fiscal year end, and may differ from the amounts and characterizations reflected in the chart below. Please refer to the Tax Center for the most current and/or final characterizations of these distributions, including any distributions characterized as return of capital.

Distributions | HideView All | Distribution Information

Ex-Date Record Date Pay Date $/
Share
Ordinary Income Short Term Gains Long Term Gains Return of Capital Liquidation Distribution
03/20/2023 03/21/2023 03/24/2023 0.12665 0.12665 - - - -
02/21/2023 02/22/2023 02/24/2023 0.10860 0.10860 - - - -
01/23/2023 01/24/2023 01/27/2023 0.12180 0.12180 - - - -
12/19/2022 12/20/2022 12/23/2022 0.13956 0.13956 - - - -
11/21/2022 11/22/2022 11/25/2022 0.11434 0.11434 - - - -
10/24/2022 10/25/2022 10/28/2022 0.11986 0.11986 - - - -
09/19/2022 09/20/2022 09/23/2022 0.11410 0.11410 - - - -
08/22/2022 08/23/2022 08/26/2022 0.11491 0.11491 - - - -
07/18/2022 07/19/2022 07/22/2022 0.10872 0.10872 - - - -
06/21/2022 06/22/2022 06/30/2022 0.10431 0.10431 - - - -
05/23/2022 05/24/2022 05/31/2022 0.10589 0.10589 - - - -
04/18/2022 04/19/2022 04/29/2022 0.09790 0.09790 - - - -
03/21/2022 03/22/2022 03/31/2022 0.09836 0.09836 - - - -
02/22/2022 02/23/2022 02/28/2022 0.08549 0.08549 - - - -
01/24/2022 01/25/2022 01/31/2022 0.09338 0.09338 - - - -
12/20/2021 12/21/2021 12/31/2021 0.19859 0.08816 0.11043 - - -
11/22/2021 11/23/2021 11/30/2021 0.08935 0.08935 - - - -
10/18/2021 10/19/2021 10/29/2021 0.09371 0.09371 - - - -
09/20/2021 09/21/2021 09/30/2021 0.09211 0.09211 - - - -
08/23/2021 08/24/2021 08/31/2021 0.09434 0.09434 - - - -
07/19/2021 07/20/2021 07/30/2021 0.09477 0.09477 - - - -
06/21/2021 06/22/2021 06/30/2021 0.09387 0.09387 - - - -
05/24/2021 05/25/2021 05/28/2021 0.09508 0.09508 - - - -
04/19/2021 04/20/2021 04/30/2021 0.08624 0.08624 - - - -
03/22/2021 03/23/2021 03/31/2021 0.10074 0.10074 - - - -
02/22/2021 02/23/2021 02/26/2021 0.09456 0.09456 - - - -
01/19/2021 01/20/2021 01/29/2021 0.10139 0.10139 - - - -

Frequency Distribution of Discounts & Premiums

    Bid/Ask MidPoint Above NAV
Quarter
Ending
Days 0.00-
0.25%
0.26-
0.50%
0.51-
0.99%
1.00-
1.49%
1.50-
1.99%
≥2.00%
12/31/2022 63 36 19 4 0 0 0
09/30/2022 64 12 32 13 1 0 0
06/30/2022 62 26 18 4 0 0 0
03/31/2022 62 32 20 2 0 0 0
Year Ended 2022 251 106 89 23 1 0 0
    Bid/Ask Midpoint Below NAV
Quarter
Ending
Days 0.00-
0.25%
0.26-
0.50%
0.51-
0.99%
1.00-
1.49%
1.50-
1.99%
≥2.00%
12/31/2022 63 2 2 0 0 0 0
09/30/2022 64 5 1 0 0 0 0
06/30/2022 62 14 0 0 0 0 0
03/31/2022 62 8 0 0 0 0 0
Year Ended 2022 251 29 3 0 0 0 0

Fund Inception : 12/02/2020

Shareholders may pay more than net asset value when they buy Fund shares and receive less than net asset value when they sell those shares, because shares are bought and sold at current market prices. Performance data quoted represents past performance, which is not a guarantee of future results.

Premiums/Discounts

Shareholders may pay more than net asset value when they buy Fund shares and receive less than net asset value when they sell those shares, because shares are bought and sold at current market prices. Performance data quoted represents past performance, which is not a guarantee of future results.

 Risk & Other Information

† Credit ratings are assigned by Nationally Recognized Statistical Rating Organizations based on assessment of the credit worthiness of the underlying bond issuers. The ratings range from AAA (highest) to D (lowest) and are subject to change. Not rated indicates the debtor was not rated, and should not be interpreted as indicating low quality. Futures and other derivatives are not eligible for assigned credit ratings by any NRSRO and are excluded from quality allocations. For more information on rating methodologies, please visit the following NRSRO websites: standardandpoors.com and select "Understanding Ratings" under Rating Resources and moodys.com and select "Rating Methodologies" under Research and Ratings.

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.

Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. An issuer may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating. The values of junk bonds fluctuate more than those of high quality bonds and can decline significantly over short time periods.

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.

Active trading results in added expenses and may result in a lower return and increased tax liability.

The Fund’s income may decline when interest rates fall if it holds a significant portion of short duration securities and/or securities with floating or variable interest rates. If the Fund invests in lower yielding bonds, as the bond’s portfolio mature; the Fund will need to purchase additional bonds, thereby reducing its income.

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.

Obligations issued by US Government agencies and instrumentalities may receive varying levels of support from the government, which could affect the fund’s ability to recover should they default.

Investing in restricted securities, including 144A securities which are restricted (i.e. not publicly traded). The liquidity market for Rule 144A securities may vary, as a result, delay or difficulty in selling such securities may result in a loss to the Fund.

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.

Factor investing is an investment strategy in which securities are chosen based on certain characteristics and attributes that may explain differences in returns. Factor investing represents an alternative and selection index based methodology that seeks to outperform a benchmark or reduce portfolio risk, both in active or passive vehicles. There can be no assurance that performance will be enhanced or risk will be reduced for strategies that seek to provide exposure to certain factors. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Factor investing may underperform cap-weighted benchmarks and increase portfolio risk. There is no assurance that the investment strategies discussed in this material will achieve their investment objectives.

Bloomberg US Corp High Yield 2% Issuer Capped Index is an unmanaged index considered representative of the US high-yield, fixed-rate corporate bond market. Index weights for each issuer are capped at 2%.