TORONTO, July 21, 2014 /CNW/ - The appetite for fixed-income investments remains strong among Canadian investors despite a prolonged period of record-low yields. When interest rates eventually rise, many Canadian fixed-income investors may be surprised by the negative effect on their portfolios.
Historically, a laddered bond strategy has helped reduce the risks associated with rising interest rates, but managing a fixed-income portfolio requires expertise.
PowerShares Canada today announced the listing of two new smart beta exchange-traded funds (ETFs) on the Toronto Stock Exchange (TSX). Both ETFs have now closed the initial offerings of units and will be available for trading on TSX when the market opens today.
"As an innovator in the Canadian ETF market, PowerShares Canada recognizes the value of smart beta investment strategies," said Michael Cooke, Head of Distribution, PowerShares Canada. "Our new additions provide investors with intelligent access to short-term fixed-income investments."
PowerShares 1-3 Year Laddered Floating Rate Note Index ETF (PFL) seeks to replicate, before fees and expenses, the performance of the FTSE TMX Canada 1-3 Year Laddered Floating Rate Note Index. The index is designed to give investors exposure to a laddered basket of Canadian government and corporate investment-grade floating-rate notes. PFL has a low management fee of just 0.20%.
PowerShares LadderRite U.S. 0-5 Year Corporate Bond Index ETF (USB/USB.U) seeks to replicate, before fees and expenses, the performance of the NASDAQ LadderRite 0-5 Year USD Corporate Bond Index. The index is designed to give investors exposure to a laddered basket of U.S.-dollar-denominated, investment-grade corporate bonds. USB has a low management fee of 0.25%. The ticker symbol "USB" represents Canadian-dollar-denominated units, while "USB.U" represents U.S.-dollar-denominated units.
"The low interest rates paid on government bonds makes short-term U.S. corporate debt and floating-rate notes quite attractive to investors seeking yield," Cooke said. "Both the laddering structure and the short duration of the underlying securities help reduce interest-rate sensitivity."
PFL and USB/USB.U complement PowerShares Canada's existing suite of TSX-listed fixed-income ETFs, which includes:
- PowerShares Tactical Bond ETF (PTB)
- PowerShares 1-5 Year Laddered Investment Grade Corporate Bond Index ETF (PSB)
- PowerShares Ultra Liquid Long Term Government Bond Index ETF (PGL)
- PowerShares Senior Loan (CAD Hedged) Index ETF (BKL)
- PowerShares Fundamental High Yield Corporate Bond (CAD Hedged) Index ETF (PFH)
To learn more about TSX-listed PowerShares ETFs, please visit www.powershares.ca.
About Invesco Canada Ltd.
Invesco Canada Ltd., operating under three distinct yet complementary product brands (Trimark, Invesco and PowerShares), is one of Canada's leading investment management companies. A subsidiary of Invesco Ltd., Invesco Canada's singular focus is on investment management, offering a diversified suite of solutions to institutions, organizations, companies and individual investors across Canada and around the world. Additional information is available at www.invesco.ca.
About Invesco Ltd.
Invesco Ltd. is a leading independent global investment management firm, dedicated to helping investors worldwide achieve their financial objectives. By delivering the combined power of our distinctive investment management capabilities, Invesco provides a wide range of investment strategies and vehicles to our clients around the world. Operating in more than 20 countries, the firm is listed on the New York Stock Exchange under the symbol IVZ. Additional information is available at www.invesco.com.
U.S.-dollar-denominated units do not provide a currency hedge between the Canadian dollar and the U.S. dollar.
FTSE TMX Global Debt Capital Markets Inc("FTDCM"), FTSE International Limited ("FTSE"), the London Stock Exchange Group companies (the "Exchange") or TSX INC. ("TSX" and together with FTDCM, FTSE and the Exchange, the "Licensor Parties"). The Licensor Parties make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE TMX Canada Investment Grade 1-5 Year Laddered Corporate Bond Index, FTSE TMX Canada Ultra Liquid Long Government Bond Index and FTSE TMX Canada 1-3 Year Laddered Floating Rate Note Index ("the Index") and/or the figure at which the said Index stands at any particular time on any particular day or otherwise. The Index is compiled and calculated by FTDCM and all copyright in the Index values and constituent lists vests in FTDCM. The Licensor Parties shall not be liable (whether in negligence or otherwise) to any person for any error in the Index and the Licensor Parties shall not be under any obligation to advise any person of any error therein.
"TMX" is a trade mark of TSX Inc. and is used under licence. "FTSE®" is a trade mark of FTSE International Limited in Canada, and Taiwan and FTSE®" is a trade mark of the London Stock Exchange Group companies in the rest of the world, and is used by FTDCM under licence".
NASDAQ®, OMX®, and NASDAQ OMX® are registered trademarks of The NASDAQ OMX Group, Inc. ("NASDAQ OMX") and LadderRite® is a registered trademark of LadderRite Portfolios LLC ("LadderRite"). NASDAQ®, OMX®, NASDAQ OMX® and LadderRite® are collectively the "Marks". The Marks are used under licence to PowerShares Capital Management LLC and Invesco Canada Ltd. The Product(s) have not been passed on by NASDAQ OMX or LadderRite as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by NASDAQ OMX or LadderRite, and NASDAQ OMX AND LADDERRITE MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).
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 www.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.
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.
ETFs are not diversified investments.
PowerShares Canada is registered business name of Invesco Canada Ltd.
This piece was produced by Invesco Canada Ltd.
Invesco® and all associated trademarks are trademarks of Invesco Holding Company Limited, used under licence. PowerShares®, Leading the Intelligent ETF Revolution® and all associated trademarks are trademarks of Invesco PowerShares Capital Management LLC (Invesco PowerShares), used under licence.
© Invesco Canada Ltd., 2014
SOURCE: Invesco Canada Ltd.
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