Invesco S&P SmallCap Health Care ETF

Customer and revenue · Customer concentration and key customer dependence

Our revenues and net income would likely be adversely affected by any reduction in AUM as a result of either a decline in market value of such assets or net outflows. We derive substantially all our revenues from investment management contracts with clients. Under these contracts, the investment management fees paid to us are generally based on the market value of AUM.

Strategic execution · Merger acquisition and divestiture risks

We may engage in strategic transactions that could create risks. We regularly review, and from time-to-time engage in strategic transactions, some of which may be material. Strategic transactions also pose the risk that any business we acquire may lose customers or employees or could underperform relative to expectations.

Information management · Information systems and reporting

Our business is vulnerable to deficiencies and failures in support systems, including data management, and customer service functions that could lead to breaches and errors or reputational harm, resulting in loss of customers or claims against us.

Technology infrastructure · Technology systems and infrastructure failure

Our ability to manage and grow our business successfully can be impeded by systems and other technological limitations. Our continued success in effectively managing and growing our business depends on our ability to integrate our varied accounting, financial, information and operational systems on a global basis.

Digital transformation and innovation · Digital transformation and modernization

Our continued success in effectively managing and growing our business depends on our ability to integrate our varied accounting, financial, information and operational systems on a global basis. Moreover, adapting or developing the existing technology systems we use to meet our internal needs, as well as client needs, industry demands and new regulatory requirements, is also critical for our business.

Technology infrastructure · Cloud services and data center operations

Our ability to conduct any of the foregoing actions is highly dependent on communications and information systems and on third-party service providers and their related technology systems and platforms. Our operations and processes rely on commercially available data provided by third parties as well as providers of services, including technology services.

Cybersecurity and data protection · Insider threats and access controls

A breach of our technology systems could damage our reputation and could result in the unauthorized disclosure or modification or loss of sensitive or confidential information (including client data); unauthorized disclosure, modification or loss of proprietary information relating to our business; inability to process client or company transactions.

Capital structure and performance · Dividend policy and capital allocation

This issuance may limit our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes, may restrict our ability to pay dividends to holders of common shares in certain circumstances.

Market and investment · Asset valuation and impairment

The carrying value of goodwill and other intangible assets on our balance sheet has become impaired in the past and could become impaired in the future, which would adversely affect our results of operations. Goodwill and intangible assets totaled $8,477.1 million and $3,927.3 million, respectively, at December 31, 2025. We recorded a non-cash impairment of $1,794.9 million related to our indefinite-lived intangible assets.

Market and investment · Interest rate and yield curve risk

Our business is exposed to risks associated with inflation and fluctuations in interest rates including rapid changes or uncertainty in rate direction. Certain institutional investors using money market products and other short-term duration fixed income products for cash management purposes may shift these investments to direct investments in comparable instruments in order to realize higher yields.

International and currency · Emerging markets exposure

Addressing the key emerging markets in the world, such as China and India, which often have populations with different needs, preferences and horizons than the more developed U.S. and European markets. These markets often have different regulatory requirements and economic conditions.

Credit and liquidity · Debt service and covenant compliance

The breach of any covenant could result in a default under the applicable Credit agreement. Compliance with these covenants may be affected by factors outside our control, including market volatility, declines in AUM or revenues, increased regulatory or operational costs, and adverse macroeconomic conditions.

Tax and financial reporting · Tax compliance and changes in tax law

Legislative and other measures that may be taken by governmental authorities could materially increase our tax burden or otherwise adversely affect our net income or liquidity. The international tax environment continues to change as a result of both coordinated actions by governments and unilateral measures designed by individual countries.

Industry regulation · Licensing and permits

Laws and regulations generally grant governmental agencies and industry self-regulatory authorities broad administrative discretion over our activities, including the power to require registrations or licenses, limit or restrict our business activities, conduct examinations, risk assessments, investigations and capital adequacy reviews.

Data and privacy · Regulatory investigations and penalties

Regulatory inquiries, investigations or findings of wrongdoing, intentional or unintentional misrepresentation of our products and services in regulatory filings, product literature, advertising materials, public relations information, social media or other external communications, operational failures can substantially damage our reputation.

Economic and market conditions · Consumer spending and confidence

Redemptions and other withdrawals from, or shifting among, client portfolios. These changes could be caused by investors reducing their investments in client portfolios in general or in the market segments in which we focus; investors taking profits from their investments.

Geopolitical and trade · Political instability and government changes

Uncertainties regarding geopolitical developments, such as nation state sovereignty, border disputes, diplomatic developments, social instability or changes in governmental policies, can produce volatility in global financial markets and regulatory environments.

Geopolitical and trade · Trade policies tariffs and sanctions

Changes to tax, tariff and import/export regulations and economic sanctions may have a negative effect on global or regional economic conditions, financial markets and our business. Any changes with respect to trade policies, treaties, taxes, government regulations and tariffs may have a material adverse effect on global or regional economic conditions and the stability of global financial markets.

Reputation and brand · Social media and digital reputation

Intentional or unintentional misrepresentation of our products and services in regulatory filings, product literature, advertising materials, public relations information, social media or other external communications, operational failures can substantially damage our reputation.

Stakeholder relations · Investor relations and market confidence

Investors, particularly in the institutional market, rely on external consultants and other third parties for advice on the choice of investment manager. These consultants and third parties tend to exert a significant degree of influence over their clients' choices, and they may favor one of our competitors over us as better meeting their particular clients' needs.