Invesco Peak II Index
Powered by high quality companies with adaptive asset allocation technology.
High quality companies
Powered by high quality companies, which have historically outperformed the broader stock market1
Responsive bond strategy
Utilizes a dynamic bond strategy to diversify equity exposure while responding to varying interest rates.
Adaptive asset allocation
Exposure to equities, bonds, and cash are adjusted daily with Salt Financial’s truVol® technology.
About Invesco Peak II Index
Stock market exposure built from high quality companies. Bond exposure that responds to changes in market conditions. Daily, dynamic allocation that seeks to deliver strong risk-adjusted returns over time.
How it works
The Invesco Peak II Index focuses on three key components to gauge company quality.
Management Quality
Companies with a strong track record of returning excess cash to shareholders through stock buybacks rather than diluting existing ownership through new equity issuance.
Operating quality
Companies that generate higher levels of profit from their available assets by demonstrating a superior ability to manage their resources efficiently.
Earnings quality
Companies marked by high earnings quality are those that can generate higher-than-average cash flows from their businesses relative to their accounting earnings.
The index provides exposure to bonds as an additional and complementary source of returns.
An attractive feature of bonds — in particular, US Treasury bonds — is that they often experience less dramatic swings in returns relative to stocks.2
However, a price drop combined with higher volatility in 10-year Treasuries often signals a rise in interest rates. When this happens, the index allocates a portion of the bond exposure from 10-year Treasuries into 2-year Treasuries, potentially offering more price stability. The goal is to provide more defensive exposure and help cushion the impact of declining bond prices.
Exposure to equities, bonds, and cash is adjusted daily using Salt Financial’s truVol® technology – that seeks to deliver a smoother performance over time.
When the riskiness of stock holdings rises, the index will shift away from stocks into bonds and/or cash. When the riskiness of stock holdings decreases, the index will shift away from bonds and/or cash into stocks.
As the riskiness of a combined allocation of stocks and bonds rises or falls, the index allocates more or less, respectively, to cash.
In periods of high volatility, the index may be comprised heavily or fully of bonds and/or cash, which may persist as volatility is elevated. Due to excess return index construction, cash allocations in the index are non-remunerated.3
Resources
Fact sheet
Provides an overview of the index, strategy highlights, and performance
Transcript
Methodology
Features rules and guidelines followed to build and maintain the index.
Transcript
Brochure
Illustrations key facts and features of the index
Transcript
Footnotes
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1
The Invesco US Quality Index has returned 13.41% annualized and the Invesco US Large Mid Cap Index has returned 11.08% annualized since Dec. 31, 2002 (as of June 30, 2024). The Invesco US Large Mid Cap Index was launched on Oct. 20, 2017, and the Invesco US Quality Index launched on Aug. 3, 2020. All data prior to launch dates is backtested (i.e., calculations of how the index might have performed over that time period had the index existed). Backtested performance is subject to inherent limitations because it reflects the retroactive application of an index methodology and selection of index constituents with the benefit of hindsight. Past performance, actual or backtested, is no guarantee of future performance.
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2
For the 10-year period from September 30, 2014, to September 30, 2024, the annualized volatility of the S&P 500 Index and Bloomberg U.S. Trsy Bellwether 10-Year TR Index were 15.25% and 7.18%, respectively. Volatility is the standard deviation of returns.
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3
The cash position is non-remunerated means that the amount of readily available cash does not directly generate income or provide any financial return; it simply represents the current level of liquid funds on hand, not a source of earnings itself.
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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.
Diversification/Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns and does not assure a profit or protect against loss.
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 index discussed in this material will achieve their investment objectives.
Although bonds generally present less short-term risk and volatility than stocks, the bond market is volatile and investing in bonds involves interest rate risk; as interest rates rise, bond prices usually fall, and vice versa. Bonds also entail issuer and counterparty credit risk, and the risk of default. Additionally, bonds generally involve greater inflation risk than stocks. Holding cash or cash equivalents may negatively affect performance.
This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions.
Invesco Indexing LLC is an indirect, wholly owned subsidiary of Invesco Ltd. The group is legally, technologically and physically separate from other business units of Invesco, including the various global investment centers.
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