Invesco S&P 500® Downside Hedged ETF

Invesco S&P 500® Downside Hedged ETF (PHDG) holds the stocks in the S&P 500 alongside cash and futures on the VIX volatility index. It moves more money into the hedge when market volatility rises. An adviser actively manages it around a rules-based benchmark. That sets it apart from similar S&P 500 funds that hedge with options. Its 0.39% expense ratio is a little below the 0.43% average of those similar funds.

• Over the year to Oct 27, 2026, PHDG returned +10.7%, 3rd of 6 among similar funds.
• Its 5-year annualized return was +4.4% and its 10-year +7.5%.
• In the 2020 COVID crash, while stocks fell, it gained 0.4%.
• Its worst full calendar year was 2022 (-14.1%); its best was 2020 (+19.0%).
• The deepest fall in its price history was 17.7% (Dec 5, 2014 to Nov 3, 2016), recovered by Dec 11, 2017.

As of Jul 31, 2026, the fund held 504 securities; the ten largest made up 30.09% of assets, and 15.45% sat in cash and money-market holdings.

By sector

• Over the three months to Jul 31, 2026, investors withdrew a net $1.8M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +4.70%, -2.92%, -0.56%.

The fund aims for positive total returns in rising or falling markets that don't move directly with stock or bond markets. Its benchmark is the S&P 500® Dynamic VEQTOR Index, which blends three parts: the S&P 500, the S&P 500 VIX Short-Term Futures Index, and cash. The VIX, often called the market's "fear gauge," measures how much volatility traders expect, based on S&P 500 option prices. Volatility tends to jump when stocks fall. So the benchmark leans toward stocks when markets are calm and toward VIX futures when volatility rises.

The stock sleeve uses "full replication," which means it owns every S&P 500 company at its index weight. As of July 31, 2026, the fund held 504 stocks, led by NVIDIA (6.0%), Apple (5.6%) and Microsoft (4.3%), with about 15% in cash and cash-like holdings. Invesco Capital Management actively decides how much goes into each sleeve and may depart from the benchmark. It also manages VIX futures and S&P 500 futures, and it may use ETFs and exchange-traded notes linked to the VIX.

Futures contracts expire, so the fund must keep replacing them. Portfolio turnover was 929%. Owning VIX futures has generally cost money in calm markets. The prospectus warns that sharp price swings that keep reversing can cause substantial losses. This is not a buffer fund, and there is no set floor on losses.

• PHDG charges 0.39% a year, versus an average of 0.43% for the similar funds below (4th of 6, cheapest first).
• The fee includes a 0.05% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $40 in the first year and $549 over 10 years (assuming a 5% annual return).

PHDG owns S&P 500 stocks, and Invesco moves part of the money into VIX futures (contracts that tend to rise when stock markets turn fearful) and cash as volatility climbs, aiming to cushion sell-offs.

PHDG launched in December 2012, so it missed the 2008 crisis. From the market's February 2020 peak to its March low, it gained 0.4%, though it fell 13.9% in late March and recovered by August 2020. Its worst calendar year was 2022, down 14.33%, and a 14.8% drop that year took until June 2024 to recover. Its deepest fall, 17.7% from December 2014 to November 2016, took another 13 months to make up. Retirees selling shares for spending during those slumps would have sold below earlier highs.

The yield was 1.42% as of October 27, 2026, paid quarterly. Its expense ratio (annual fee) of 0.39% is below the 0.43% average of five S&P 500 funds with similar holdings. VIX futures tend to lose value in calm markets, which can drag on long-run returns. Past results don't predict the future, and planning means looking at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.