PowerShares Takes On … PowerShares?

October 12, 2006

PowerShares launches eleven sector-focused Intellidex ETFs, going head-to-head with its own FTSE RAFI fund; we compare the two fund-by-fund.

Let the battle of the enhanced indexers begin.

In a rarity in the exchange-traded fund (ETF) industry, PowerShares has launched a new slate of ETFs that compete directly with existing PowerShares products already on the market.  The company eleven new ETFs include one market-timing fund, two industry funds and eight sector products.

The sector funds will go head-to-head with a recently launched slate of FTSE RAFI "fundamentally weighted" sector ETFs, which debuted on the Nasdaq Stock Exchange on September 20

 The new funds track "Intellidex" indexes developed by the American Stock Exchange (AMEX), and not surprisingly, they listed on the Nasdaq as well.  Intellidex indexes use a proprietary mix of quantitative screens in an attempt to outperform the market. Generally speaking, the indexes choose stocks based on some combination of growth-at-a-reasonable-price and momentum-based strategies. 

The funds charge 60 basis points per year in annual expenses, and are:

Market Timing
PowerShares Dynamic MagniQuant Portfolio (AMEX: PIQ)

PowerShares Dynamic Banking Portfolio (AMEX: PJB)
PowerShares Dynamic Healthcare Services Portfolio (AMEX: PTJ)

PowerShares Dynamic Basic Materials Sector Portfolio (AMEX: PYZ)
PowerShares Dynamic Consumer Discretionary Sector Portfolio (AMEX: PEZ)
PowerShares Dynamic Consumer Staples Sector Portfolio (AMEX: PSL)
PowerShares Dynamic Energy Sector Portfolio (AMEX: PXI)
PowerShares Dynamic Financial Sector Portfolio (AMEX: PFI)
PowerShares Dynamic Industrials Sector Portfolio (AMEX: PRN)
PowerShares Dynamic Healthcare Sector Portfolio (AMEX: PTH)
PowerShares Dynamic Technology Sector Portfolio (AMEX: PTF)

The Magniquant fund is a sector-rotation fund that uses macroeconomic data to make allocations across different sectors.

"We are very excited to welcome PowerShares back to the Amex for their 11 new ETF listings," said Cliff Weber, Senior Vice President of the Amex ETF Marketplace. "The Amex takes great pride in supporting PowerShares' 47 ETF listings on the Exchange as we continue to bring innovative products to the marketplace."

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