Two are first of their kind in Canada
TORONTO, May 6, 2015 /CNW/ - In response to investor demand, PowerShares Canada today announced the listing of three new smart beta exchange-traded funds (ETFs) on the Toronto Stock Exchange (TSX). Two of the ETFs are the first of their kind to be listed in Canada.
All three ETFs have now closed the initial offerings of units and will be available for trading on TSX when the market opens today.
"These distinct offerings truly demonstrate the diversity of smart beta strategies," says Jamie Kingston, Senior Vice President, Product Management and Development, Invesco Canada. "Not only do they break the link between price and portfolio weight, but they provide investors with unique strategies to achieve a variety of investment objectives."
PowerShares Low Volatility Portfolio ETF (PLV) is the first Canada-listed global asset allocation ETF to employ a low-volatility strategy in both its fixed income and equity allocations. PLV is actively managed by Invesco Advisers, Inc., and it seeks to generate capital growth and modest income over the long term by investing, directly or indirectly, primarily in global equity securities and fixed-income securities.
Invesco Advisers will apply a proprietary investment process that analyzes the risks associated with the following asset classes in the following benchmark target allocations:
- 30% Canadian short-term bonds
- 20% Canadian equity securities
- 50% global equity securities
The portfolio will be rebalanced on a monthly basis.
"For investors concerned about volatility but seeking to maintain equity-market exposure, a low-volatility strategy may help reduce downside risk," says Kingston. "PLV also provides exposure to shorter-term bonds, which are less sensitive to interest-rate changes and may provide a good defence against rates eventually rising."
PowerShares Global Shareholder Yield ETF (PSY) represents another first in the Canadian ETF market, delivering exposure to U.S. and international equities of companies with a strong track record of returning free cash flow to shareholders.
"Companies typically return free cash flow to shareholders in one of two ways: share buybacks and dividends," says Kingston. "PSY gives investors exposure to both in a globally diversified equity portfolio."
PSY seeks to generate income and capital growth over the long term by investing, directly or indirectly, primarily in equities from developed markets globally. To achieve this, PSY will hold securities of four PowerShares ETFs in the following strategic target allocations:
- 25% PowerShares Dividend Achievers™ Portfolio (NYSE Arca: PFM)
- 25% PowerShares International Dividend Achievers™ Portfolio (NYSE Arca: PID)
- 25% PowerShares BuyBack Achievers™ Portfolio (NYSE Arca: PKW)
- 25% PowerShares International BuyBack Achievers™ Portfolio (NYSE Arca: IPKW)
This strategy is also available for purchase in U.S. dollars, listed on TSX as PSY.U.
PowerShares FTSE RAFI Global Small-Mid Fundamental ETF (PZW) seeks to generate capital growth over the long term by investing, directly or indirectly, primarily in equities of small- and medium-sized companies from developed markets globally.
In order to achieve its investment objective, PZW will hold securities of the following PowerShares portfolios in the following strategic target allocations:
- 50% PowerShares FTSE RAFI US 1500 Small-Mid Portfolio (Nasdaq: PRFZ)
- 50% PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio (NYSE Arca: PDN)
"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," says Kingston. "An index based on corporate fundamentals is less susceptible to speculation than an index based solely on market capitalization."
The investment objectives of these underlying funds is to seek investment results that generally correspond (before fees and expenses) to the price and yield of the FTSE RAFI US 1500 Small-Mid Index and the FTSE RAFI Developed ex US Mid Small 1500 Index, respectively (each, an "underlying index").
This strategy is also available for purchase in U.S. dollars, listed on TSX as PZW.U.
The ability to purchase USD units is offered as a convenience for investors and will not act as currency hedge between the Canadian dollar and the U.S. dollar.
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.
FTSE® is a trade mark owned by the London Stock Exchange Group companies and is used by FTSE International Limited ("FTSE") under licence. The FTSE RAFI® Index Series is calculated by FTSE in conjunction with Research Affiliates LLC ("RA"). Neither FTSE nor RA sponsor, endorse or promote this product and are not in any way connected to it and do not accept any liability in relation to its issue, operation and trading. Any intellectual property rights in the index values and constituent list vests in FTSE.
Investors should be aware of the risks associated with data sources and quantitative processes used in our investment management process. Errors may exist in data acquired from third-party vendors, the construction of model portfolios, and in coding related to the index and portfolio construction process. While Research Affiliates takes steps to identify data and process errors so as to minimize the potential impact of such errors on index and portfolio performance, we cannot guarantee that such errors will not occur.
"Fundamental Index®" and/or "Research Affiliates Fundamental Index®" and/or "RAFI®" and/or all other RA trademarks, trade names, patented and patent-pending concepts are the exclusive property of Research Affiliates, LLC.
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., 2015
SOURCE Invesco Canada Ltd.
For further information: Aysha Mawani, Vice President, Corporate Affairs, Tel: 416.324.7712, [email protected]