Investors can now choose their currency exposure
TORONTO, May 11, 2017 /CNW/ - In response to investor demand, Invesco has added two additional series to one of its most popular PowerShares exchange-traded funds (ETFs).
The new series provide greater flexibility for Canadians to choose the currency exposure that best meets their personal investing goals. Launched in April 2012, the PowerShares Senior Loan Index ETF (BKL.F)† was Canada's first senior loan ETF. Marking the fifth anniversary of that launch, the new series set a new milestone: the first Canadian ETF to offer investors unhedged exposure to senior loans.
"After many years of interest-rate stagnation, monetary policy appears to be tightening in the U.S., which may introduce greater volatility to the fixed-income market," says Christopher Doll, Vice President, Head of Product and Business Strategy, PowerShares Canada. "Investors seeking to dampen the potential impact of rising rates may want to consider diversifying their fixed-income portfolios beyond traditional government and corporate bonds."
The initial offering of the two new series of PowerShares Senior Loan Index ETF has now closed. These new series, available in unhedged Canadian-dollar-denominated units (BKL.C) and unhedged U.S.-dollar-denominated units (BKL.U), will be available for trading on TSX when the market opens today.
Previously, PowerShares Senior Loan Index ETF was available only in Canadian-dollar-hedged units, which will continue to trade on TSX under the ticker BKL.F.
Senior loans present a unique set of potential benefits for investors, including
- Enhanced yield: Senior loans have historically provided a higher yield than other fixed-income securities of equal or higher credit quality
- Reduced interest-rate sensitivity: The low-duration nature of senior loans may help to reduce a portfolio's overall interest-rate sensitivity. Senior loans deliver yield without exposing investors to the long end of the interest-rate curve. This is due to the LIBOR component of the senior loan interest payments, which resets, on average, every 90 days. The reset mechanism not only reduces the risk of the loan price falling, but it also allows investors to participate positively in any further rate increases at the short end of the curve
- Priority of repayment and protection: In the event of default, senior secured loans rank the highest in the capital structure
- Low correlation to traditional bonds: Senior loans, as represented by the S&P/LSTA U.S. Leveraged Loan 100 Index, have had low correlation to other segments of the fixed-income market
Invesco will consider rolling out similar series of additional ETFs, based on investor demand.
About Invesco Ltd.
Invesco Ltd. is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. NYSE: IVZ; invesco.com.
Commissions, management fees and expenses may all be associated with investments in exchange-traded funds (ETFs). ETFs are not guaranteed, their values change frequently and past performance may not be repeated. Please read the prospectus before investing. Copies are available from Invesco Canada Ltd. at powershares.ca. There are risks involved with investing in ETFs. Please read the prospectus for a complete description of risks relevant to the ETF. Ordinary brokerage commissions apply to purchases and sales of ETF units.
† Effective on January 12, 2017, the following name and ticker changes were made: PowerShares Senior Loan (CAD Hedged) Index ETF (BKL) became PowerShares Senior Loan Index ETF (BKL.F).
S&P® is a registered trademark of Standard & Poor's Financial Services LLC and has been licensed for use by S&P Dow Jones Indices LLC and sublicensed for certain purposes by Invesco Canada Ltd. LSTA® is a registered trademark of Loan Syndications and Trading Association and has been licensed for use by S&P Dow Jones Indices LLC and Invesco Canada Ltd. The S&P/LSTA U.S. Leverage Loan 100 Index is a product of S&P Dow Jones Indices LLC, and has been licensed for use by Invesco Canada Ltd. Invesco Canada Ltd.'s PowerShares Senior Loan Index ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC or its affiliates or LSTA, and none of S&P Dow Jones Indices LLC or its affiliates or LSTA make any representation regarding the advisability of investing in such a product.
Most PowerShares ETFs seek to replicate, before fees and expenses, the performance of the applicable index, and are not actively managed. This means that the sub-advisor will not attempt to take defensive positions in declining markets and the ETF will continue to provide exposure to each of the securities in the index regardless of whether the financial condition of one or more issuers of securities in the index deteriorates. In contrast, if a PowerShares ETF is actively managed, then the sub-advisor has discretion to adjust that PowerShares ETF's holdings in accordance with the ETF's investment objectives and strategies.
PowerShares and Invesco are registered business names of Invesco Canada Ltd.
Invesco® and all associated trademarks are trademarks of Invesco Holding Company Limited, used under licence. PowerShares® and all associated trademarks are trademarks of Invesco PowerShares Capital Management LLC (Invesco PowerShares), used under licence.
© Invesco Canada Ltd., 2017
SOURCE Invesco Canada Ltd.
For further information: Aysha Mawani, Vice President, Corporate Affairs, Tel: 416.324.7712, [email protected]