Invesco KBW Regional Banking ETF (KBWR US) – Portfolio Construction Methodology

The underlying KBW Nasdaq Regional Banking Index provides exposure to US regional banks and thrifts via a rules-based, committee-maintained universe of common stocks. Eligible securities must be classified as primarily engaged in US regional banking activities, have free float ≥ 20%, trade at least 100,000 shares in average daily volume over the prior month, maintain a trailing 30-day average closing price ≥ USD 2, and have listed options or be options-eligible. Only one class per issuer is included and new entrants must have market cap at least as large as the smallest existing index member. The index uses modified market-cap weighting with caps: no stock above 4% and at most five at that cap, with other constituents above 2% capped at 2% and excess redistributed. It is rebalanced quarterly using end-of-February, -May, -August and -November market caps, with changes implemented after the third Friday of the following month.

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