PowerShares Plans Int’l Volatility, Beta ETFs

September 15, 2011

PowerShares broadens its plans to push into the world of 'enhanced beta' ETFs.

Invesco PowerShares, the company behind the $22 billion “Q’s” ETF of Nasdaq’s 100 biggest companies, filed paperwork with U.S. regulators to expand its lineup of beta-and volatility-focused ETFs with funds focused on international companies in the developed and emerging markets, respectively.

The funds would join PowerShares’ volatility and beta plays on the S&P 500 Index, launched in May. The PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV) and the PowerShares S&P 500 High Beta Portfolio (NYSEArca: SPHB) have gathered $250 million and $11 million, respectively, in four months.

They each cost 0.25 percent in annual fees, but PowerShares did not specify planned fees for proposed internationally focused new funds.

The four funds and their planned tickers are:

  • PowerShares S&P International Developed High Beta Portfolio (NYSEArca: IDBH)
  • PowerShares S&P International Developed Low Volatility Portfolio (NYSEArca: IDLV)
  • PowerShares S&P Emerging Markets High Beta Portfolio (NYSEArca: EEHB)
  • PowerShares S&P Emerging Markets Low Volatility Portfolio (NYSEArca: EELV)


PowerShares’ plan to expand its offering of so-called enhanced beta funds is in line with a growing trend in the ETF market emphasizing more nuanced rules-based ways to access markets.

PowerShares itself today rolled out the PowerShares Fundamental Investment Grade Corporate Bond Portfolio (NYSEArca: PFIG), an ETF using an index from Rob Arnott’s Newport Beach, Calif.-based firm Research Affiliates.

Arnott’s so-called RAFI indexes screen securities based on four parameters: book value, cash flow, revenue and dividends, eschewing traditional market-capitalization weighting.

MSCI, the preeminent provider of international indexes, released research recently arguing that enhanced beta approaches may deliver superior long-term portfolio performance to any other form of security selection, including old-fashioned stock or bond picking.


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