PowerShares Takes On … PowerShares?

October 12, 2006

Basic Materials

In the Basic Materials category, the Intellidex index has strongly outperformed the FTSE RAFI fund over the past one-, three- and five-years.  That is most likely due to its strong small-cap, although a sharply higher return-on-equity might help as well.  The results are compared below.

Performance Comparison - Index Only - Through 6/30/2006
Time Period

FTSE RAFI

Intellidex

1-Year

11.19

13.32

3-Year

20.08

23.77

5-Year

17.06

27.80

Fundamentals

Category

FTSE RAFI

Intellidex

Average P/E

13.86

13.52

Average P/B

2.53

2.77

Return on Equity

16.74

23.86

Average Market Cap.

$18.544 ($USB)

$8.096 ($USB)

Number of Securities

51

60

Capitalization Comparison (%)

Category

FTSE RAFI

Intellidex

Large Cap Growth

9.69

3.92

Large Cap Value

52.95

16.48

Mid-Cap Growth

8.59

16.28

Mid-Cap Value

23.52

35.40

Small Cap Growth

0.08

2.9

Small Cap Value

5.16

25.02

ENERGY

In the Energy patch, the Intellidex index once again handily beats the FTSE RAFI index on a 1-, 3- and 5-year basis.  And once again, the small-cap tilt is the likely explanation: the average company in the Intellidex index is one-fifth the size of the average company in the FTSE RAFI index.

Note also the significant discrepancy in the price/earnings ratio. Many experts believe that small-caps have gotten overly pricey, and that may be the case here. 

Performance Comparison - Index Only - Through 6/30/2006
Time Period

FTSE RAFI

Intellidex

1-Year

22.94

27.29

3-Year

32.23

36.87

5-Year

15.30

22.44

Fundamentals

Category

FTSE RAFI

Intellidex

Average P/E

9.41

12.13

Average P/B

2.38

2.75

Return on Equity

28.40

28.89

Average Market Cap.

$151.539 ($USB)

$29.715 ($USB)

Number of Securities

51

60

Capitalization Comparison (%)

Category

FTSE RAFI

Intellidex

Large Cap Growth

111.24

13.90

Large Cap Value

73.87

18.91

Mid-Cap Growth

3.04

18.63

Mid-Cap Value

10.40

22.90

Small Cap Growth

0.61

8.40

Small Cap Value

0.83

17.27

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