PowerShares Plans 4 Finance-Related ETFs

August 08, 2011

PowerShares looks to climb into the asset-gathering game by putting four finance-related ETFs into registration.

Invesco PowerShares, the Wheaton, Ill.-based money management firm behind the world’s biggest Nasdaq 100 exchange-traded fund, filed paperwork with Securities and Exchange Commission detailing plans to market four separate U.S.-focused bank-, insurance and finance-related ETFs.

The new funds would add to a number of bank-focused funds it already has on the market, though none seems to have gone gangbusters as far as asset gathering. For example, its PowerShares Dynamic Banking Portfolio (NYSEArca: PJB) has less than $13 million in assets, and its PowerShares KBW International Financial Portfolio (NYSEArca: KBWX) has $2.2 million, according to data compiled by IndexUniverse.

The four proposed funds, all of which will be listed on Arca, the New York Stock Exchange’s electronic trading platform, are the:

  • PowerShares Bank Portfolio
  • PowerShares Regional Banking Portfolio
  • PowerShares Capital Markets Portfolio
  • PowerShares Insurance Portfolio

 

State Street has two of the more successful finance-related funds now on the market. The Financial Select Sector SPDR ETF (NYSEArca: XLF) had just shy of $5 billion in assets as of Aug. 5, and the SPDR KBW Bank ETF (NYSEArca: KBE) had $1.31 billion. Such ETFs have traded with great volatility in the market’s ebb and flow as the economy has worked its way—in fits and starts—out of the worst slump since the 1930s.

The Four PowerShares Funds

The distinction between the two banking ETFs PowerShares put into registration is that the one will focus on larger money center banks and leading regional banks and thrifts, while the “Regional Banking Portfolio will focus on mid-capitalization regional banks and thrifts, the filing said.

The insurance ETF will include publicly traded U.S. companies active in the insurance industry, including, but not limited to, personal and commercial lines, property/casualty, life insurance, reinsurance, brokerage and financial guarantee companies, according to the filing, which was dated Aug. 5.

Lastly, the capital markets fund will be based on a float-adjusted, modified-market capitalization-weighted, index that targeting publicly traded companies that do business as broker-dealers, asset managers, trust and custody banks or exchanges, according to the paperwork.

PowerShares didn’t say what the funds’ tickers or annual expense ratios would be.

 

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