A method used by funds and exchange-traded products to mirror the performance of an index or asset without buying all the underlying securities, typically by using derivatives such as total return swaps or futures. It matters to investors because it changes the sources of return and risk — for example it can lower trading costs and improve tracking but introduces counterparty, collateral and legal risks that differ from owning the actual assets, like renting performance instead of holding it.
swap-basedfinancial
Swap-based describes a security, fund, or strategy that gains exposure to an asset or index through swap contracts—agreements to exchange the returns, interest payments, or cash flows of one party for those of another. Think of it like borrowing someone else’s performance: instead of owning the underlying stocks or bonds, the investor receives the gains or losses via a contract with a counterparty. It matters because counterparty credit risk, fees, and contract terms can affect returns and liquidity differently than owning the underlying assets directly.
index replicationfinancial
Index replication is the process an investment fund uses to copy a market index’s composition and returns, either by buying all the index’s securities in the same weights (full replication) or by holding a representative subset (sampling). It matters to investors because the method affects how closely the fund tracks the index, the costs, liquidity and tax consequences they experience, and the potential difference between the fund’s performance and the index (tracking error).
exchange-traded fundsfinancial
An exchange-traded fund is an investment product that bundles many stocks, bonds, or other assets into a single package that trades on a stock exchange like an individual share; think of it as a ready-made basket you can buy or sell throughout the trading day. For investors it matters because ETFs provide easy access to broad exposure, typically lower costs and built-in diversification, and the ability to adjust positions quickly without buying each asset separately.
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Supporting Invesco’s Distribution of Synthetic Replication Capabilities to European Mutual Fund Investors
DUBLIN--(BUSINESS WIRE)--
Northern Trust (Nasdaq: NTRS) today announced it has been appointed by Invesco to provide administration, custody and depositary services for its new Irish-domiciled index tracking mutual fund range, Invesco Markets V ICAV.
Invesco is a U.S. asset management company serving clients in more than 120 countries. Headquartered in Atlanta, Georgia, the firm has US$2.45 trillion in assets under management across public, private, active, and passive investments (as of 31 May 2026).
The new fund range is designed to make Invesco’s swap-based (synthetic) approach to index replication available to mutual fund investors in Europe via investment platforms and other institutional channels. This replication model has previously been provided solely across Invesco’s exchange-traded funds (ETFs).
The mandate further extends Northern Trust’s relationship with Invesco, building on its long-standing support of the firm’s synthetic ETF platform, Invesco Markets Plc, and administration services provided for its digital assets platform, Invesco Digital Markets Plc.
“This appointment reflects the strength of our long-standing collaboration with Invesco and our ability to support its evolving product structures,”commented Melíosa O’Caoimh, country head, Ireland, at Northern Trust. “For this new range, we have delivered a scalable end-to-end solution – an operating model that integrates with Invesco’s mutual fund investor servicing infrastructure while establishing connectivity to a network of investor platforms – closely supporting its distribution plans and growth strategy.”
“As we continue to expand our product offering to meet evolving investor requirements, we want to work with service providers able to support innovative structures at scale,” said Gary Buxton, head of Product, EMEA at Invesco. “Northern Trust’s experience supporting the evolution and growth of our platform, coupled with its track record of consistent service quality, were key to its selection as asset servicing provider for Invesco Markets V ICAV.”
Northern Trust provides a complete suite of asset servicing solutions for global investment managers including fund administration, global custody, investment operations outsourcing and data solutions – supporting a range of complex investment strategies across the full spectrum of asset classes.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking services to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2026, Northern Trust had assets under custody/administration of US$18.6 trillion, and assets under management of US$1.8 trillion. For more than 135 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit us on northerntrust.com. Follow us on Instagram @northerntrustcompany or Northern Trust on LinkedIn.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/terms-and-conditions.
