The combination of an Average People Pillar rating and a Below Average Process Pillar rating limit  Invesco Glb ex-US High Yld Corp Bd ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy gets a Below Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in BB rated bonds and government bonds compared with category peers. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Venator Materials PLC

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Invesco Glb ex-US High Yld Corp Bd ETF earns a Below Average Process Pillar rating. Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. The process benefits from tracking an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. However, the rating is limited by the fund's unremarkable long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category average, which suggests that the process has struggled over that period. The parent firm's five-year risk-adjusted success ratio of 44% also holds the process back. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

The investment strategy as stated in the fund's prospectus is: 

The investment seeks to track the investment results (before fees and expenses) of the ICE USD Global High Yield Excluding U.S. Issuers Constrained Index.  The fund invests at least 80% of its total assets in the components that comprise the underlying index. The underlying index is composed of U.S. dollar denominated and below investment grade corporate debt that is publicly issued in the U.S. domestic and eurobond markets by non-U.S. issuers.  

 This strategy has an 8.2% 12-month yield, higher than its average peer's 6.3%. Plus, its 30-day SEC yield (a standardized, point-in-time estimate of the fund’s future income return) sits at 7.7%. While a higher yield may deliver more income, it also tends to indicate higher credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been higher than the average yield of its Morningstar Category peers. The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated B. In terms of long-term interest-rate risk, this strategy is on par with peers. The longer a strategy's duration, the more sensitive it is to shifts in interest rates. This fund, with a 3.3-year duration, is expected to gain 3.3% of its net asset value if interest rates drop by 1 percentage point, and vice versa.

Below Average

Process

Invesco’s  team is comparable to peers, resulting in an Average People Pillar rating. There are four managers listed on the fund: Peter Hubbard, Gary Jones, Richard Ose, Greg Meisenger. The team is well equipped, with an average of 11 years of portfolio management experience. Together, they manage a total of three strategies, with a Negative asset-weighted average Morningstar Medalist Rating, indicating the team is positioned to generate negative alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Average

People

Invesco succeeds in a number of areas but also has its share of subpar offerings, along with many others that land somewhere in the middle. A mid-2023 change of CEO, from longtime chief Marty Flanagan to veteran Invesco executive Andrew Schlossberg, is noteworthy, and several other executives retired or departed in 2023. Portfolio-manager shuffles aimed at bolstering poor performers, which began under Flanagan, have continued under Schlossberg, who told Morningstar his most important aim is bolstering “investment quality.” However, major changes of direction or approach are unlikely. The firm retains a Morningstar Parent rating of Average. 
Invesco’s international-equity teams in Texas and New York remain solid. However, the extensive U.S.-equity lineup needs improvement. Fixed-income offerings run the gamut: The multisector and short-term-bond areas are good, but corporate high-yield is less impressive. The firm’s exchange-traded fund lineup includes the popular Nasdaq-focused QQQ; passive strategies make up around 37% of Invesco’s assets under management. Invesco has not been averse to trying new types of strategies, and it was among the firms that immediately launched a spot bitcoin ETF after SEC approval in early 2024.
The picture outside the United States is mixed. Fund performance has been subpar in Asia, and while the picture has brightened in the United Kingdom and Europe, that region still can’t be considered a strength.

Parent

Invesco Global Short Term High Yield Bond ETF

PGHY tracks an equal-weighted index of short-term USD-denominated, high-yield corporate bonds issues by US and foreign corporations.

PGHY tracks market-value-weighted index of USD-denominated corporate debts from non-US issuers, rated below investment grade. The fund has no maturity limits or duration target in its selection process.

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