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DUBLIN - Invesco Markets II Plc announced on Friday it will increase the expected proportion of assets subject to securities lending from 50% to 90% across multiple bond funds, while maintaining the maximum allowable limit of 100%.
The change, which takes effect October 13, 2025, applies to 38 share classes across various bond funds including Euro Government, UK Gilt, and US Treasury portfolios, according to a notice to shareholders.
Invesco attributed the increase to "heightened demand from borrowers for securities held by the Funds." The company stated that the adjustment will not impact the risk profile of the affected funds, which are "expected to benefit from the increased exposure to securities lending through the revenue generated."
The current 50% expected lending level has been disclosed in fund supplements, which will be updated to reflect the new 90% threshold. Despite the significant increase in expected lending activity, the maximum permitted level remains unchanged at 100%.
Shareholders who wish to redeem their holdings as a result of this change may do so according to the dealing provisions outlined in the company’s prospectus before the effective date.
Securities lending is a practice where funds temporarily transfer securities to borrowers in exchange for collateral and lending fees, generating additional income for fund shareholders. The practice is common among ETF providers as a method to offset management fees and potentially enhance returns.
The notice affects a range of fixed income ETFs with varying durations, from short-term products like the Invesco US Treasury Bond 0-1 Year UCITS ETF to longer-duration offerings such as the Invesco UK Gilt 15+ Year UCITS ETF.
This information is based on a company press release statement issued by Invesco Markets II Plc.
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