Daily ETF Watch: PowerShares Closing 4 Funds

With 2015 drawing to a close, Invesco PowerShares has announced an array of changes that affect eight different funds.

The following funds are slated to see their last day of trading on March 18, 2016:

• PowerShares KBW Capital Markets ETF (KBWC)
• PowerShares KBW Insurance ETF (KBWI)
• PowerShares China A-Share ETF (CHNA)
• PowerShares Fundamental Emerging Markets Local Debt (PFEM)

All four funds have less than $15 million in assets under management.

Another four funds are expected to see important changes as of the market close on March 21:

• The PowerShares S&P Emerging Markets High Beta Portfolio (EEHB | D-43) will see its ticker change to EEMO, while its name will change to the PowerShares S&P Emerging Market Momentum Portfolio and its index will transition from the S&P Emerging Market High Beta Index to the S&P Momentum Emerging Plus LargeMidCap Index.
• The PowerShares S&P International Developed High Beta Portfolio (IDHB | D-36) will change its ticker to IDMO, and its name to the PowerShares S&P International Developed Momentum Portfolio. Its index will be switched from the S&P International Developed High Beta Index to the S&P Developed ex US & South Korea LargeMidCap Index
• The PowerShares S&P International Developed High Quality Portfolio (IDHQ | D-54) will keep its ticker but change its name to the PowerShares S&P International Developed Quality Portfolio and its index from the S&P International Developed High Quality Rankings Index to the S&P Quality Developed ex US LargeMidCap Index.
• The PowerShares S&P 500 High Quality Portfolio (SPHQ | A-79) will change its name to the PowerShares S&P 500 Quality Portfolio and its index from the S&P 500 High Quality Rankings Index to the S&P 500 Quality Index.

SPHQ is by far the largest of the funds mentioned, with $580 million in assets under management. The other high-beta and high-quality ETFs each have less than $20 million in assets under management.

Vanguard Fees Fall

Vanguard reported lower expense ratios on 21 of its U.S. fixed-income and equity ETFs for the year ended August 2015, according to a press release. The firm is known for automatically raising or lowering expense ratios on its funds as their assets under management decrease or increase; it essentially takes advantage of the economies of scale that come with increased assets under management.

In most cases, the ETFs saw their expense ratios fall from their published rate of 12 basis points at the end of the 2014 fiscal year to 10 basis points for a 17% reduction in price by the end of the 2015 fiscal year. The largest fund to see such an expense ratio decrease was the Vanguard Short-Term Corporate Bond ETF (VCSH | B-54), with nearly $11 billion in assets under management.

Those other funds include the following:

• Vanguard Extended Duration
• Vanguard Intermediate-Term Corporate Bond
• Vanguard Intermediate-Term Government Bond
• Vanguard Long-Term Corporate Bond
• Vanguard Long-Term Government Bond
• Vanguard Mortgage-Backed Securities
• Vanguard Short-Term Government Bond
• Vanguard Consumer Discretionary
• Vanguard Consumer Staples
• Vanguard Energy
• Vanguard Financials
• Vanguard Industrials
• Vanguard Information Technology
• Vanguard Materials
• Vanguard Telecommunication Services
• Vanguard Utilities

Meanwhile, the Vanguard Health Care ETF (VHT | A-95) saw its expense ratio fall from 12 basis points to 9 basis points, a 25% reduction. And Vanguard’s three “Mega Cap” ETFs saw their expense ratios fall from 11 basis points to 9 basis points, an 18% reduction.

Contact Heather Bell at [email protected].