Explore how ETFs can be cost-effective tools that help you invest in new possibilities.
Our ETF capabilities cover major equity, fixed income and commodity benchmarks and those providing access to innovative strategies and more specialist market segments, some not available from any other ETF issuer.
ETFs can offer convenient access to broad and diversified baskets of bonds at a low cost.
ETFs have become key components in ESG portfolios.
As one of the world’s largest ETF providers with over US$524 billion1 globally in ETF assets under management, we’ve been dedicated to ETF investing since 2003.
Our capabilities span regions and strategies across equities, fixed income and commodities.
Our culture of innovation lets us find new opportunities for investors, as well as ways to improve the performance of core ETF exposures.
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Monthly fixed income update
Following the sell-off in April, May was a better month for bond markets and saw strong inflows of US$7.0bn into fixed income ETFs, taking the year-to-date total to US$24.8bn. Read our latest thoughts on how fixed income markets performed and what we think you should be looking out for in the near term.
Gold’s supply and demand in Q1 2024
In this second part of the Gold Report, we explore the various sources of supply and demand to further explain recent movements in the gold price.
Explore the benefits of laddering
Bond ladders are portfolios of bonds with sequential maturity dates. As bonds reach maturity, the proceeds can be used to fund a specific expense, such as saving for a house or retirement, or reinvested into new bonds with longer maturities.
Monthly gold update
The gold price rose by 2.5% in April; the metal again broke multiple price records. We believe the key drivers for the upward trend in the gold price remain intact. Discover insights into the key macro events and what we think you should be keeping your eyes on in the near term.
Bitcoin: To halve and to hold
The crypto market is preparing for the next Bitcoin halving. What does the halving mean and what are the longer-term prospects for investors in Bitcoin?
An Exchange Traded Fund (ETF) is a pooled investment vehicle with shares that can be bought and sold throughout the day on the stock exchange, in the same way that ordinary stocks and shares are traded.
Exchange Traded Commodities (ETCs) are listed debt instruments traded on a stock exchange and backed by a commodity. They are not funds or ETFs.
Benefits:
Low cost of ownership – ETFs tend to be cheaper than most other funds.
Liquidity – Creation/redemption process ensures liquidity
Ease of trading – ETFs can be traded on a stock exchange at any time, when open. May be an attractive feature for investors who are looking for more flexibility around when to buy and sell an investment.
Transparency – ETFs are very transparent and usually disclose their full list of holdings daily on the ETF provider’s website.
Index tracking – Physical and synthetic replication models may offer economic advantages
Risks:
Tracking differences: ETFs may not track an index perfectly. The difference between fund return and index return is called ‘tracking difference’.
Capital risk: Like any investment product, the value of an ETF may go down as well as up, and you may not get back the amount invested.
There are many ways for fund managers to track the performance of an index. These ‘replication methods’ fall into two broad categories, physical and synthetic.
Physical ETFs own the underlying stocks or bonds that comprise the benchmark index; whereas a synthetic ETF aims to deliver the index performance through a swap provided by an investment bank. A swap is a type of derivative contract where two parties agree to exchange (“swap”) one stream of flows for another.
At Invesco, we pioneered a synthetic method called “physical with swap overlay” whereby the ETF holds a basket of quality securities, which are not the same as those in the index but are expected to produce most of the returns. To reduce tracking error, the ETF has swaps often with multiple counterparties (investment banks) that pay the difference between the index return and the return of the basket of securities.
Smart beta is a term for any rules-based strategy that uses characteristics other than just geography and market capitalisation to select and weight the securities of the index.
1 30 November 2023
For complete information on risks, refer to the legal documents.
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Views and opinions are based on current market conditions and are subject to change.Data as at 31 October 2023, unless otherwise stated.
This is marketing material and not financial advice. It 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.
