Invesco Exchange-Traded Fund Trust II - Invesco S&P SmallCap 600 QVM Multi-factor ETF (QVMS)

Invesco S&P SmallCap 600 QVM Multi-factor ETF (XSMO) Summary

Profile: The Invesco S&P SmallCap 600 QVM Multi-factor ETF aims to track the performance of the S&P SmallCap 600 Quality ValueMomentum Multi-Factor Index. This means it invests in small-cap US stocks and selects them based on factors that historically indicate positive returns, including Quality (盈利), Value (价值) and Momentum (动量). Objective: XSMO seeks to provide investors with long-term capital appreciation and to generally match the return characteristics of the index. It utilizes a quantitative methodology to achieve the investment objective. Issuer:

• Reputation and Reliability: Invesco is a well-established investment management company with a long history and strong reputation, managing over US$ 1.4 trillion in assets globally as of March 31, 2023.
• Management: The ETF is managed by a team of experienced professionals at Invesco who specialize in quantitative investing and index-tracking strategies. Market Share: As of the latest data, XSMO has approximately 0.53% of the total AUM in the US small-cap ETF market, placing it among the top contenders in its niche. Total Net Assets: As of November 7, 2023, XSMO has total net assets of over US$ 635 million. Moat:
• Quantitative Methodology: XSMO uses a robust and transparent quantitative methodology based on selecting stocks with specific characteristics like quality, value, and momentum. This approach aims to outperform the broader small-cap market over the long term.
• Cost Efficiency: As an ETF, XSMO offers lower expenses compared to actively managed funds within a similar investment category. The current expense ratio is 0.35%. Financial Performance:
• Historical performance: Since its inception in April 2016, XSMO has delivered an annualized total return of 13.73% (as of November 7, 2023).
• Benchmark Comparison: XSMO has consistently outperformed its benchmark index, the S&P SmallCap 600, over its history. This demonstrates the effectiveness of its multi-factor approach. Growth Trajectory: The small-cap value investing style has historically outperformed the broader market over the long term. As the US economy continues to grow, the small-cap segment may present good opportunities. However, potential economic downturns could impact its performance negatively. Liquidity:
• Average Trading Volume: XSMO has an average daily trading volume of approximately 375,000 shares, demonstrating good liquidity and ease of trading.
• Bid-Ask Spread: The ETF has a relatively tight bid-ask spread, indicating low transaction costs when buying or selling shares. Market Dynamics: Economic growth, interest rate changes, investor sentiment, and sector-specific events can affect the small-cap value space and, consequently, the performance of XSMO. Competitors: Key competitors in the small-cap value ETF space include iShares S&P Small-Cap 600 Value ETF (IJS), Vanguard Small-Cap Value ETF (VBR), and SPDR S&P 600 Small Cap Value ETF (SLYV). Expense Ratio: The fund's expense ratio is 0.35%, which is considered low compared to other actively managed small-cap value funds with similar strategies. Investment Approach and Strategy:
• Strategy: XSMO tracks the S&P SmallCap 600 QVM Multi-Factor Index, which utilizes quantitative analysis to select companies based on value, quality, and momentum factors. The ETF holds approximately 224 stocks across various small-cap US businesses.
• Composition: The ETF mainly invests in stocks within the Small-Cap Value space, focusing on sectors like Industrials, Financials, and Consumer Discretionary. Key Points:
• Invesco S&P SmallCap 600 QVM Multi-factor ETF (XSMO) seeks to offer long-term capital growth by tracking an index of US small-cap value stocks based on factors like quality, value, and momentum.
• Managed by the well-established Invesco with a strong quantitative investing team, XSMO provides diversified exposure to the small-cap value segment at a relatively low cost.
• The ETF has outperformed its benchmark, demonstrating the potential benefits of its multi-factor approach. However, its performance can vary depending on market conditions.