Invesco S&P SmallCap High Dividend Low Volatility ETF (XSHD US) - Portfolio Construction Methodology

Core Viewpoint - The Invesco S&P SmallCap High Dividend Low Volatility ETF (XSHD) is designed to target U.S. small-cap equities that offer high dividend yields while maintaining low price volatility, utilizing the S&P SmallCap 600 Low Volatility High Dividend Index as its benchmark [1] Group 1: Portfolio Construction Methodology - The underlying index focuses on U.S. small-cap stocks with high indicated dividend yields and low price volatility, sourced from the S&P SmallCap 600 [1] - Eligible stocks must have a positive indicated regular dividend and are selected based on trailing 12-month price volatility during semiannual reviews [1] - The index consists of 60 constituents weighted by indicated annual dividend yield, with individual stock weights capped around 3% and sector weights limited to approximately 25% to manage concentration [1] - The index undergoes reconstitution and rebalancing twice a year, following the third Friday of January and July [1]