ETF Watch: Cambria, PowerShares Launch Funds

April 06, 2017

PowerShares Debuts Two, Two-Factor ETFs
Invesco Powershares is bringing to market two factor-focused funds targeting momentum paired with value, and quality paired with size. The PowerShares S&P 500 Value With Momentum Portfolio (SPVM) and the PowerShares S&P SmallCap Quality Portfolio (XSHQ) come with expense ratios of 0.30% and 0.29%, respectively.

Both funds are listed on the Bats exchange.

SPVM’s index selects its 100 components from the constituents of the S&P 500 Index, by first selecting the 200 stocks with the highest value scores based on book-value-to-price ratios, earnings-to-price ratios and sales-to-price ratios. From that pool, the methodology selects the 100 stocks with highest positive momentum scores. Those 100 stocks are weighted by their value scores to formulate the index, which is rebalanced semiannually, according to the prospectus.

Meanwhile, XSHQ’s underlying index assigns quality scores to the components of the S&P SmallCap 600 Index based on return on equity, accruals ratios and financial leverage ratios. It selects the 120 companies with the highest scores and weights them by those same quality scores. Like SPVM’s index, it is rebalanced semiannually.

The launch of the two funds further rounds out PowerShares’ family of factor ETFs, which currently includes funds targeting low volatility, momentum, quality, value, size and dividend yield.

Contact Heather Bell at [email protected].

 

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