PowerShares Introduces Three Smart Beta ETFs
PowerShares Canada has listed three new "smart beta" exchange traded funds (ETFs) on the Toronto Stock Exchange. The constituents of the underlying index are selected and weighted according to four measurements, namely the five-year averages for sales, cash flow, dividends, and current book value.
"The strategy looks beyond the simplistic cap-weighted index to assess the true economic size of each company and weight it accordingly," explains Jamie Kingston, Senior Vice President of Product Management and Development at Invesco Canada. "By breaking the link between price and portfolio weight, fundamental index strategies do not allow the market to dictate the weight a stock receives in an index."
- The PowerShares FTSE RAFI Canadian Small-Mid Fundamental Index ETF (PZC) provides exposure to Canadian small- and mid-cap companies. It seeks to replicate (before fees and expenses) the performance of the FTSE RAFI Canada Mid-Small Index and will invest, directly or indirectly, primarily in Canadian equity securities of small- and medium-sized companies.
- The PowerShares FTSE RAFI U.S. Fundamental Index ETF (PXS) seeks to replicate (before fees and expenses) the performance of the FTSE RAFI US 1000 Index, which is made up of the 1,000 U.S. companies with the largest fundamental value that are included in the FTSE US All Cap Index. This fund will invest, directly or indirectly, primarily in U.S. equity securities.
- The PowerShares FTSE RAFI Global+ Fundamental Index ETF (PXG) seeks to replicate (before fees and expenses) the performance of the FTSE RAFI All World 3000 Index, which is made up of 3,000 developed- and emerging-market companies with the largest fundamental value that are included in the FTSE Global All Cap Index. The ETF will invest, directly or indirectly, primarily in companies with the highest fundamental weightings from both developed and emerging markets.
All three ETFs are now available for trading.