Invesco Nasdaq Free Cash Flow Achievers ETF (QOWZ US) – Portfolio Construction Methodology

The underlying Nasdaq US Free Cash Flow Achievers Index targets U.S.-listed equities with long-run growth in free cash flow. The universe is the Nasdaq US Benchmark Index, from which it excludes issuers in the Financials and Real Estate sectors and retains one most-liquid share class per issuer. Eligible securities must have at least eleven years of data and positive free cash flow in each of those years. Among these, the index selects the 50 companies with the highest count of positive year-over-year free cash flow changes over the 11-year window, breaking ties by three-year free cash flow compound growth. It reconstitutes annually each June and rebalances quarterly. Constituents are weighted by full market cap, then transformed by raising weights to an exponent P between 0 and 1 so that no stock exceeds 10% and the aggregate of positions above 4.75% stays at or below 45%, producing a large-cap tilt.

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