The Invesco Agriculture Commodity Strategy No K-1 ETF issues
a Form 1099 rather than a Schedule K-1 tax form.
ATLANTA, Aug. 24,
2022 /PRNewswire/ -- Invesco Ltd. (NYSE: IVZ), a
leading global asset management firm, announced today that it has
expanded its Invesco Commodities Exchange-Traded Fund (ETF) Suite
with the launch of Invesco Agriculture Commodity Strategy
No K-1 ETF (PDBA). The new ETF is actively investing in
derivatives and other financially linked instruments to gain
exposure to a diversified range of eleven different grains,
livestock, and soft commodities, through a structure that does not
produce a K-1 tax form.
"Invesco Agriculture Commodity Strategy No K-1 ETF builds on our
history of strategically launching new commodity ETFs that pioneer
easy and cost-effective1 exposure to sectors, like
agriculture, that may otherwise be difficult for investors to
access," says Anna Paglia, Global
Head of ETFs and Indexed Strategies at Invesco.
The Invesco PDBA ETF is structured as a 1940 Act
Fund2 which issues a Form 1099 tax form rather than a
Schedule K-1. This tax structure is preferential for some
investors and will complement the pre-existing Invesco DB
Agriculture ETF (DBA), which is a 1933 Act Commodity
Pool3 and issues a Schedule K-1 form. By offering both
ETF structures, Invesco allows investors the opportunity to choose
which tax structure best meets their needs in a broad-based
agriculture commodities ETF.
PDBA generally invests in the commodities included in its
benchmark index, DBIQ Diversified Agriculture Index Excess
Return; however, PDBA has the ability to make active portfolio
management decisions to respond promptly to changes in agriculture
commodities markets and address the dynamic nature of commodity
forward curves.
"Agriculture may be one of the most important sectors of the
global economy. Recent geopolitical events coupled with climate
change and extreme weather have created supply constraints and
price volatility, directly impacting the global grains trade," says
Kathy Kriskey, Product Strategist,
Commodities and Alternatives ETFs at Invesco. "PDBA provides
exposure to a variety of futures contracts including grains,
livestock and soft commodities with an updated tax structure that
issues a Form 1099 rather than a K-1."
Invesco's Commodities ETF line-up has seen over $3.2 billion of inflows in 20224
thus far, as commodities ETFs may offer a portfolio hedge against
economic issues including rising interest rates, U.S. inflation and
geopolitical unrest.
PDBA will seek long-term capital appreciation by utilizing a
strategy designed to exceed the performance of its benchmark, the
DBIQ Diversified Agriculture Index. PDBA will generally align
holdings in a weighting consistent with the benchmark, although it
may not seek exposure to all the components of the benchmark or in
the same proportion.
1
|
Since ordinary
brokerage commissions apply for each buy and sell transaction,
frequent trading activity may increase the cost of ETFs.
|
2
|
A 1940 Act fund
is a pooled investment vehicle offered by a registered
investment company as defined in the Investment Company Act of
1940 (commonly referred to in the United States as the '40 Act or,
in some instances, the Investment Company Act (ICA).
|
3
|
A 1933 Act Commodity
Pool means any investment trust, syndicate, or similar form of
enterprise operated for the purpose of trading in commodity
interests, including futures, swaps, options, retail forex
transactions, retail commodity transactions, and leverage
transactions and is registered under the Securities Act of
1933.
|
4
|
Based on Bloomberg
Assets Under Management across 9 products on August 4,
2022.
|
About Invesco Ltd.
Invesco Ltd. (Ticker NYSE: IVZ) is a global independent
investment management firm dedicated to delivering an investment
experience that helps people get more out of life. Our distinctive
investment teams deliver a comprehensive range of active, passive
and alternative investment capabilities. With offices in more than
20 countries, Invesco managed US$1.4
trillion in assets on behalf of clients worldwide as of
June 30, 2022. For more information,
visit www.invesco.com/corporate.
About Risk - PDBA:
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 unfavourable 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.
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 involve greater risks than direct investments. 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 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.
Leverage created from borrowing or certain types of transactions
or instruments may impair liquidity, cause positions to be
liquidated at an unfavourable 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.
The Fund is non-diversified and may experience greater
volatility than a more diversified investment.
Risks of investing the agriculture sector include but are not
limited to general economic conditions or cyclical market patterns
negatively affecting supply and demand; legislative or regulatory
developments related to food safety, the environment, and other
governmental policies; environmental damage, depletion of
resources, and mandated expenditures for safety and pollution
control devices; and increased competition. The Fund's performance
is linked to the daily spot price performance of certain
agriculture commodities, which may be highly volatile and can
change quickly and unpredictably due to several factors, including
the supply and demand of each commodity, environmental or labor
costs, political, legal, financial, accounting and tax matters and
other events the Fund cannot control. Increased competition caused
by economic recession, labour difficulties and changing consumer
tastes and spending can affect the demand for agricultural
products, and consequently the value of investments in that sector.
As a result, the price of an agricultural commodity could decline,
which would adversely affect the Fund if it held that commodity and
may materially adversely affect Fund performance.
DBA:
This Fund is not suitable for all investors due to the
speculative nature of an investment based upon the Fund's trading
which takes place in very volatile markets. Because an investment
in futures contracts is volatile, such frequency in the movement in
market prices of the underlying future contracts could cause large
losses. See the Prospectus for risk disclosures.
Commodities and futures generally are volatile and are not
suitable for all investors.
The value of the Shares of the Fund relate directly to the
value of the futures contracts and other assets held by the Fund
and any fluctuation in the value of these assets could adversely
affect an investment in the Fund's Shares.
Please review the prospectus for break-even figures for the
Fund.
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.
This material must be accompanied or preceded by a DBA
prospectus. Please read the prospectus carefully before
investing.
This Fund issues a Schedule K-1.
Invesco Capital Management LLC, investment adviser and Invesco
Distributors, Inc., ETF distributor are indirect, wholly owned
subsidiaries of Invesco Ltd.
Invesco Capital Management LLC and Invesco Distributors, Inc. are
not affiliated with Deutsche Bank Securities, Inc.
Shares are not individually redeemable and owners of the Shares
may acquire those Shares from the Fund and tender those Shares for
redemption to the Fund in Creation Unit aggregations only,
typically consisting of 10,000, 20,000, 25,000, 50,000, 75,000,
80,000, 100,000, 150,000 or 200,000 Shares.
The DBIQ Diversified Agriculture Index is a rule-based index
composed of futures contracts of commodities in the agriculture
sector, across grains, livestock and soft commodities. An
investment cannot be made directly into an index.
DBIQ Diversified Agriculture Index is a product of Deutsche Bank
AG and/or its affiliates. Information regarding this Index is
reprinted with permission. ©Copyright 2022. All rights reserved.
Deutsche Bank®, DB, DBIQ®, Optimum Yield, DBIQ Diversified
Agriculture Index are trademarks of Deutsche Bank AG. The Indices
and trademarks have been licensed for use for certain purposes by
Invesco Capital Management LLC, an affiliate of Invesco
Distributors, Inc. The Fund is not sponsored, endorsed, sold or
promoted by DB Parties or their third party licensors and none of
such parties makes any representation, express or implied,
regarding the advisability of investing in the Fund, nor do such
parties have any liability for errors, omissions, or interruptions
in the Indices. As the Index Provider, Deutsche Bank AG is
licensing certain trademarks, the underlying Index and trade names
which are composed by Deutsche Bank AG without regard to Index,
this product or any investor.
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 Distributors, Inc. is the US distributor for Invesco's
retail products and private placements, and is an indirect, wholly
owned subsidiary of Invesco Ltd.
Before investing, investors should carefully read the
prospectus/summary prospectus and carefully consider the investment
objectives, risks, charges and expenses. For this and more complete
information about the Fund call 800 983 0903 or visit invesco.com
for the prospectus/summary prospectus.
Not a Deposit | Not FDIC Insured | Not
Guaranteed by the Bank | May Lose Value |
Not Insured by any Federal Government Agency
Invesco Distributors, Inc.
08/22 NA2382778
Contact: Stephanie Diiorio,
stephanie.diiorio@invesco.com, 212.278.9037
View original content to download
multimedia:https://www.prnewswire.com/news-releases/invesco-adds-a-new-agriculture-etf-to-its-robust-commodities-etf-suite-301610970.html
SOURCE Invesco Ltd.