SEC Company Response from INVESCO EXCHANGE-TRADED FUND TRUST (CIK 0001209466) — Oct 13, 2020
INVESCO EXCHANGE-TRADED FUND TRUST (CIK 0001209466)
Date: Oct. 13, 2020 · CIK: 0001209466 · Accession: 0001193125-20-268044
AI Filing Summary & Sentiment
File numbers found in text: 811-21265
Letter
VIA EDGAR Division of Investment Management Securities and Exchange Commission 100 F Street N.E. Washington DC 20549
RE: Invesco Exchange-Traded Fund Trust (File No. 811-21265) (the “Registrant”)
Dear Ms. Fettig:
On behalf of the Registrant and its series thereof listed in Appendix A (each, a “Fund,” and collectively, the “Funds”), this letter responds to comments provided by the staff of the Division of Investment Management (the “Staff”) of the Securities Exchange Commission to the undersigned on August 31, 2020, with respect to the Registrant’s annual report to shareholders filed on Form N-CSR for the fiscal year ended April 30, 2020.
The Staff’s comments are summarized below in italicized text. The Registrant’s responses are set out immediately under the restated comment.
1.
Comment:
The annual report for each of Invesco Dynamic Energy Exploration & Production ETF, Invesco Dynamic Food & Beverage ETF, Invesco Dynamic Leisure and Entertainment ETF, Invesco Dynamic Networking ETF, Invesco Dynamic Oil & Gas Services ETF, Invesco Dynamic Pharmaceuticals ETF, Invesco Raymond James SB-1 Equity ETF, Invesco Zacks Mid-Cap ETF and Invesco Zacks Multi-Asset Income ETF states that such Funds are non-diversified. The Staff notes, however, that each Fund appears to have been operating as diversified for more than three years. Please confirm whether any such Fund has been operating as diversified for more than three years and, if so, that the Fund will obtain shareholder approval prior to changing its operating status back to non-diversified.
Response:
For each of the above-listed Funds, a Fund may, from time to time, operate as diversified based on the composition of such Fund’s underlying index. However, none of these Funds has operated as diversified for a continuous three-year period. If a Fund were to operate in a diversified manner continuously for a three-year period, the Fund would seek shareholder approval prior to changing its operating status back to non-diversified.
2.
Comment:
The Staff notes that the Invesco WilderHill Clean Energy ETF uses the “Price Only” variant of the NASDAQ Composite Index as its benchmark index. Please explain how this index is an appropriate broad-based securities market index.
Response:
We will include benchmark information calculated on a “total return” basis going forward, beginning with reports relating to fiscal periods ending after the date of this letter.
3.
Comment:
The Staff notes that in the “Manager’s Analysis” section of the annual report for each of the sector-based Invesco DWA Momentum ETFs,1 the first sentence of the second paragraph for each Fund, other than the Invesco DWA Consumer Cyclicals Momentum ETF, references the incorrect sector in the discussion of the Fund’s strategy (i.e., it references the consumer discretionary sector, rather than the sector pertaining to the respective Fund).
Response:
For each Fund (except for Invesco DWA Consumer Cyclicals Momentum ETF), the reference cited by the Staff to the consumer discretionary sector was an inadvertent oversight. The Registrant notes that for each Fund, the “Manager’s Analysis” section correctly identifies the underlying index and correctly discloses, in the fourth paragraph, the name and description of the sector from which component securities are selected.
4.
Comment:
In the notes to the financial statements in the annual report, the charts included in the note titled “Additional Valuation Information,” which sets forth information on the fair value hierarchy for the Funds, do not include data on the levels of investments for each of Invesco Dynamic Building & Construction ETF and Invesco Dow Jones Industrial Average Dividend ETF.
Response:
It is the Registrant’s practice to include a narrative disclosure within the “Additional Valuation Information” note for any Funds where all securities held are valued based on level 1 inputs. This disclosure was omitted in error for each of Invesco Dynamic Building & Construction ETF and Invesco Dow Jones Industrial Average Dividend ETF and will be reflected going forward.
5.
Comment:
With respect to the table in the footnotes to the Schedule of Investments, please explain how the information in the column entitled “Dividend Income” agrees with the amounts of affiliated income shown in the Statement of Operations as required by Footnote 6 to Rule 12-14 of Regulation S-X (17 CFR §210.12-14 - Investments in and Advances to Affiliates).
Response:
The Registrant notes that the information contained in the table in the footnotes to the Schedule of Investments reflects the gross amount of dividends received from investments in affiliates. The information provided in the Statement of Operations reflects the dividends received from investments in affiliates net of any rebates or fees charged by the securities lending agent for investment of securities lending collateral in affiliated money market funds.
6.
Comment:
The Staff notes that for certain Funds, the amounts listed in the “Accrued Expenses” line item of the Statements of Assets and Liabilities appears high as a percentage of overall total expenses, as compared to Funds that did not list a separate line item for such expenses. Please explain whether any items contributing to the accrued expenses require separate disclosure.
Response:
The Registrant confirms that no item contributing to accrued expenses was material and therefore did not require separate disclosure. For certain Funds, the accrued expenses balance primarily consisted of printing fees and licensing fees, which were accrued during the period and paid in arrears following fiscal year end.
The “Invesco DWA Momentum ETFs” consist of the Invesco DWA Basic Materials Momentum ETF, Invesco DWA Consumer Cyclicals Momentum ETF, Invesco DWA Consumer Staples Momentum ETF, Invesco DWA Energy Momentum ETF, Invesco DWA Financial Momentum ETF, Invesco DWA Healthcare Momentum ETF, Invesco DWA Industrials Momentum ETF, Invesco DWA Technology Momentum ETF and Invesco DWA Utilities Momentum ETF.
7.
Comment:
In note 2.B to the financial statements of the annual report for Invesco Global Listed Private Equity ETF, consider revising the language in the subsection “Risk of Investing in Listed Private Equity Companies” to disclose that some business development companies (“BDCs”) may have asset coverage of 150%, rather than 200%.
Response:
The Registrant confirms that going forward it will revise the language cited by the Staff to reflect the ability of some BDCs to maintain an asset coverage ratio of 150%.
* * * *
Please do not hesitate to contact me at 630.315.2349 or Will McAllister at 630.315.2341 if you have any questions or wish to discuss any of the responses presented above.
Sincerely,
/s/ Abigail Murray
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CORRESP 1 filename1.htm CORRESP October 13, 2020 VIA EDGAR Ms. Christina DiAngelo Fettig Division of Investment Management Securities and Exchange Commission 100 F Street N.E. Washington DC 20549 RE: Invesco Exchange-Traded Fund Trust (File No. 811-21265) (the “Registrant”) Dear Ms. Fettig: On behalf of the Registrant and its series thereof listed in Appendix A (each, a “Fund,” and collectively, the “Funds”), this letter responds to comments provided by the staff of the Division of Investment Management (the “Staff”) of the Securities Exchange Commission to the undersigned on August 31, 2020, with respect to the Registrant’s annual report to shareholders filed on Form N-CSR for the fiscal year ended April 30, 2020. The Staff’s comments are summarized below in italicized text. The Registrant’s responses are set out immediately under the restated comment. 1. Comment: The annual report for each of Invesco Dynamic Energy Exploration & Production ETF, Invesco Dynamic Food & Beverage ETF, Invesco Dynamic Leisure and Entertainment ETF, Invesco Dynamic Networking ETF, Invesco Dynamic Oil & Gas Services ETF, Invesco Dynamic Pharmaceuticals ETF, Invesco Raymond James SB-1 Equity ETF, Invesco Zacks Mid-Cap ETF and Invesco Zacks Multi-Asset Income ETF states that such Funds are non-diversified. The Staff notes, however, that each Fund appears to have been operating as diversified for more than three years. Please confirm whether any such Fund has been operating as diversified for more than three years and, if so, that the Fund will obtain shareholder approval prior to changing its operating status back to non-diversified. Response: For each of the above-listed Funds, a Fund may, from time to time, operate as diversified based on the composition of such Fund’s underlying index. However, none of these Funds has operated as diversified for a continuous three-year period. If a Fund were to operate in a diversified manner continuously for a three-year period, the Fund would seek shareholder approval prior to changing its operating status back to non-diversified. 2. Comment: The Staff notes that the Invesco WilderHill Clean Energy ETF uses the “Price Only” variant of the NASDAQ Composite Index as its benchmark index. Please explain how this index is an appropriate broad-based securities market index. Response: We will include benchmark information calculated on a “total return” basis going forward, beginning with reports relating to fiscal periods ending after the date of this letter. 3. Comment: The Staff notes that in the “Manager’s Analysis” section of the annual report for each of the sector-based Invesco DWA Momentum ETFs,1 the first sentence of the second paragraph for each Fund, other than the Invesco DWA Consumer Cyclicals Momentum ETF, references the incorrect sector in the discussion of the Fund’s strategy (i.e., it references the consumer discretionary sector, rather than the sector pertaining to the respective Fund). Response: For each Fund (except for Invesco DWA Consumer Cyclicals Momentum ETF), the reference cited by the Staff to the consumer discretionary sector was an inadvertent oversight. The Registrant notes that for each Fund, the “Manager’s Analysis” section correctly identifies the underlying index and correctly discloses, in the fourth paragraph, the name and description of the sector from which component securities are selected. 4. Comment: In the notes to the financial statements in the annual report, the charts included in the note titled “Additional Valuation Information,” which sets forth information on the fair value hierarchy for the Funds, do not include data on the levels of investments for each of Invesco Dynamic Building & Construction ETF and Invesco Dow Jones Industrial Average Dividend ETF. Response: It is the Registrant’s practice to include a narrative disclosure within the “Additional Valuation Information” note for any Funds where all securities held are valued based on level 1 inputs. This disclosure was omitted in error for each of Invesco Dynamic Building & Construction ETF and Invesco Dow Jones Industrial Average Dividend ETF and will be reflected going forward. 5. Comment: With respect to the table in the footnotes to the Schedule of Investments, please explain how the information in the column entitled “Dividend Income” agrees with the amounts of affiliated income shown in the Statement of Operations as required by Footnote 6 to Rule 12-14 of Regulation S-X (17 CFR §210.12-14 - Investments in and Advances to Affiliates). Response: The Registrant notes that the information contained in the table in the footnotes to the Schedule of Investments reflects the gross amount of dividends received from investments in affiliates. The information provided in the Statement of Operations reflects the dividends received from investments in affiliates net of any rebates or fees charged by the securities lending agent for investment of securities lending collateral in affiliated money market funds. 6. Comment: The Staff notes that for certain Funds, the amounts listed in the “Accrued Expenses” line item of the Statements of Assets and Liabilities appears high as a percentage of overall total expenses, as compared to Funds that did not list a separate line item for such expenses. Please explain whether any items contributing to the accrued expenses require separate disclosure. Response: The Registrant confirms that no item contributing to accrued expenses was material and therefore did not require separate disclosure. For certain Funds, the accrued expenses balance primarily consisted of printing fees and licensing fees, which were accrued during the period and paid in arrears following fiscal year end. 1 The “Invesco DWA Momentum ETFs” consist of the Invesco DWA Basic Materials Momentum ETF, Invesco DWA Consumer Cyclicals Momentum ETF, Invesco DWA Consumer Staples Momentum ETF, Invesco DWA Energy Momentum ETF, Invesco DWA Financial Momentum ETF, Invesco DWA Healthcare Momentum ETF, Invesco DWA Industrials Momentum ETF, Invesco DWA Technology Momentum ETF and Invesco DWA Utilities Momentum ETF. 2 7. Comment: In note 2.B to the financial statements of the annual report for Invesco Global Listed Private Equity ETF, consider revising the language in the subsection “Risk of Investing in Listed Private Equity Companies” to disclose that some business development companies (“BDCs”) may have asset coverage of 150%, rather than 200%. Response: The Registrant confirms that going forward it will revise the language cited by the Staff to reflect the ability of some BDCs to maintain an asset coverage ratio of 150%. * * * * Please do not hesitate to contact me at 630.315.2349 or Will McAllister at 630.315.2341 if you have any questions or wish to discuss any of the responses presented above. Sincerely, /s/ Abigail Murray Abigail Murray Senior Counsel cc: Will McAllister Adam Henkel Eric Purple Mark Greer 3 Appendix A Series ID Series Name S000013127 Invesco DWA Basic Materials Momentum ETF S000013128 Invesco DWA Consumer Cyclicals Momentum ETF S000013129 Invesco DWA Consumer Staples Momentum ETF S000013101 Invesco DWA Energy Momentum ETF S000013102 Invesco DWA Financial Momentum ETF S000013104 Invesco DWA Healthcare Momentum ETF S000013105 Invesco DWA Industrials Momentum ETF S000013110 Invesco DWA Technology Momentum ETF S000003046 Invesco DWA Utilities Momentum ETF S000012109 Invesco NASDAQ Internet ETF S000003026 Invesco Dynamic Biotechnology & Genome ETF S000003040 Invesco Dynamic Building & Construction ETF S000003041 Invesco Dynamic Energy Exploration & Production ETF S000003027 Invesco Dynamic Food & Beverage ETF S000003028 Invesco Dynamic Leisure and Entertainment ETF S000003029 Invesco Dynamic Media ETF S000003030 Invesco Dynamic Networking ETF S000003043 Invesco Dynamic Oil & Gas Services ETF S000003031 Invesco Dynamic Pharmaceuticals ETF S000003032 Invesco Dynamic Semiconductors ETF S000003033 Invesco Dynamic Software ETF S000003023 Invesco Dynamic Market ETF S000011995 Invesco FTSE RAFI US 1000 ETF S000013120 Invesco FTSE RAFI US 1500 Small-Mid ETF S000003054 Invesco Dynamic Large Cap Growth ETF S000003055 Invesco Dynamic Large Cap Value ETF S000013106 Invesco S&P 100 Equal Weight ETF S000032768 Invesco S&P 500 GARP ETF S000032769 Invesco S&P 500 Value with Momentum ETF S000003056 Invesco S&P MidCap Momentum ETF S000013108 Invesco S&P MidCap Quality ETF S000003057 Invesco S&P MidCap Value with Momentum ETF S000003024 Invesco S&P SmallCap Momentum ETF S000003025 Invesco S&P SmallCap Value with Momentum ETF S000060804 Invesco Zacks Mid-Cap ETF S000060805 Invesco Zacks Multi-Asset Income ETF S000003039 Invesco Aerospace & Defense ETF S000013122 Invesco Cleantech ETF S000013787 Invesco DWA Momentum ETF S000013789 Invesco Global Listed Private Equity ETF S000003052 Invesco Golden Dragon China ETF S000060806 Invesco Raymond James SB-1 Equity ETF 4 S000020214 Invesco S&P 500 BuyWrite ETF S000003049 Invesco S&P 500 Quality ETF S000060807 Invesco S&P Spin-Off ETF S000003048 Invesco Water Resources ETF S000003053 Invesco WilderHill Clean Energy ETF S000013111 Invesco BuyBack Achievers ETF S000003037 Invesco Dividend Achievers ETF S000060802 Invesco Dow Jones Industrial Average Dividend ETF S000013788 Invesco Financial Preferred ETF S000003045 Invesco High Yield Equity Dividend Achievers ETF S000003036 Invesco International Dividend Achievers ETF 5