Four New ETFs Focused on Low Volatility, Momentum, and Value Added to the Existing Line Up of Factor-Based ETFs to Create the Industry’s Largest Offering..
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Invesco PowerShares Capital Management, LLC, a leading global provider of exchange-traded funds (ETFs), announced the launch of four new S&P 500® Factor ETFs, which were listed today on the NYSE Arca:
– PowerShares S&P 500 Momentum Portfolio (SPMO)
– PowerShares S&P 500 Value Portfolio (SPVU)
– PowerShares Developed EuroPacific Currency Hedged Low Volatility Portfolio (FXEP)
– PowerShares Japan Currency Hedged Low Volatility Portfolio (FXJP)
PowerShares’ new portfolios apply a factor-based approach designed to generally correspond to the price and yield of the S&P 500 Momentum Index, the S&P 500 Enhanced Value Index, the S&P EPAC ex. Korea Low Volatility USD Hedged Index, and the S&P Japan 500® Low Volatility USD Hedged Index, respectively.
“Factor strategies can serve an important role in a diversified portfolio,” said Dan Draper, Managing Director and Head of Invesco PowerShares. “By extending our line-up of low volatility ETFs and adding
new momentum and value portfolios, we are offering investors more innovative ways to incorporate factor strategies into their financial plans.”
“Factor based indices continue to increase in popularity for investors who seek alternatives to traditional market-cap weighted indices,” says Vinit Srivastava, Senior Director of Strategy Indices at S&P Dow
Jones Indices. “We are proud to be the index provider for PowerShares’ comprehensive suite of factor ETFs based on the S&P 500.”
Momentum and Value
SPMO is designed to track the performance of stocks in the S&P 500 Index that have a high “momentum score,” based on upward price movements of the security as compared to other eligible securities within the S&P 500 Index. SPVU is designed to track the performance of stocks in the S&P 500 Index that have a high “value score,” calculated based on book value-to-price ratio, earnings-to-price ratio, and sales-toprice ratio.
Currency Hedged
FXEP is designed to provide access to the 200 least volatile stocks in the S&P EPAC Ex. Korea LargeMidCap Index based on their volatility over the past year. Constituents are weighted relative to the inverse of their volatility with the least volatile stocks receiving the highest weightings. The portfolio is then 100% currency hedged to the US dollar using rolling one month forward contracts.
Investing in Japan can result in the dual risk of uncertain stock selection and foreign exchange fluctuations. FXJP can be added to a portfolio with Japanese equity exposure to potentially help mitigate unexpected equity market developments through exposure to a low volatility strategy that seeks to dampen currency risk via the currency hedge feature.
These new ETFs are the next installment of the firm’s established lineup of five smart beta funds derived from components of the S&P 500 Index, including: PowerShares S&P 500 Low Volatility ETF (SPLV), PowerShares S&P 500 High Quality ETF (SPHQ), PowerShares S&P 500 High Dividend ETF (SPHD), PowerShares S&P 500 High Beta ETF (SPHB), and PowerShares S&P 500 ex-Rate Sensitive Low Volatility ETF (XRLV).
Source: ETFWorld.com
WMCR
Wilshire Micro-Cap ETF (based on the Wilshire US Micro-Cap Index)
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