Invesco S&P MidCap Quality ETF (XMHQ US) – Portfolio Construction Methodology

The underlying S&P MidCap 400 Quality Index targets mid-cap U.S. equities by selecting the 80 highest-scoring stocks from the committee-maintained S&P MidCap 400 universe using a composite quality score based on return on equity, the accruals ratio and financial leverage. Weights are proportional to each constituent’s float-adjusted market cap multiplied by its quality score, with single-name weights capped at 5% and sector weights limited to 40% to manage concentration. The parent S&P MidCap 400 admits additions within typical mid-cap market-capitalization bands set by the Index Committee; as of the current guideline update, new entrants generally fall between about USD 8.0–22.7 billion in market cap. Reconstitution and rebalancing occur semi-annually, effective in June and December on the standard S&P timetable, aligning the membership review and the score-weighted rebalance to the parent’s maintenance cycle while preserving mid-cap purity and capacity.

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