In its latest filing, Invesco PowerShares outlines plans for three smart-beta ETFs, two of which will track low-beta, equal-weight indexes from Russell and FTSE, and a third that will track yet another Dorsey Wright strategy. The proposed funds are as follows:
- PowerShares Russell 1000 Low Beta Equal Weight Portfolio
- PowerShares FTSE International Low Beta Equal Weight Portfolio
- PowerShares DWA Tactical Sector Rotation Portfolio
The first two funds’ indexes will select stocks with below-average betas from their respective parent indexes and equal weight those components. The Russell 1000 is basically the top 1,000 stocks in the U.S. in terms of market capitalization, while the FTSE All-World ex-US Index covers both developed and emerging market stocks falling into the large-cap and midcap designations.
Meanwhile, the DWA fund will simply invest in other PowerShares ETFs. Its underlying index can cover up to four PowerShares funds as well as three-month U.S. Treasury bills. The fund will select its holdings on a monthly basis from the nine momentum-focused sector ETFs offered by PowerShares based on their relative strength:
- PowerShares DWA Basic Materials Momentum Portfolio (PYZ | B-80)
- PowerShares DWA Consumer Cyclicals Momentum Portfolio (PEZ | B-62)
- PowerShares DWA Consumer Staples Momentum Portfolio (PSL | B-60)
- PowerShares DWA Energy Momentum Portfolio (PXI | B-54)
- PowerShares DWA Financial Momentum Portfolio (PFI | B-62)
- PowerShares DWA Healthcare Momentum Portfolio (PTH | B-46)
- PowerShares DWA Industrials Momentum Portfolio (PRN | B-55)
- PowerShares DWA Technology Momentum Portfolio (PTF | B-55)
- PowerShares DWA Utilities Momentum Portfolio (PUI | B-89)
The four funds in the portfolio are equal-weighted, but if fewer than four of the designated ETFs exhibit acceptable levels of relative strength, the sector-rotation ETF will replace that portion of its portfolio with T-bills.
The filing did not include expense ratios or tickers.