PowerShares, the Wheaton, Ill.-based fund company best known for
its Nasdaq ETF (NasdaqGM:QQQQ), filed to offer an international
corporate bond ETF, joining a proposed fund from State Street
Global Advisers that will also give investors exposure to corporate
debt outside the U.S.
The International Corporate Bond Portfolio (NYSEArca:PICB) will
have a 0.50 percent annual management fee. It will be based on the
S&P International Corporate Bond Index.
The fixed-income portion of the ETF world has been growing
recently, as investors seek securities with attractive yields,
increasingly outside the U.S. In March, Boston-based SSgA filed to
offer the SPDR Barclays Capital International Corporate Bond ETF
(NYSEArca:IBND). Official U.S. interest rates are close to zero
after the Federal Reserve cut rates to stimulate an economy in its
worst crisis since the 1930s.
The new PowerShares ETF will invest investment-grade corporate
bonds issued by non-U.S. issuers in the following currencies:euros;
Australian, Canadian and New Zealand dollars; British pounds;
Japanese yen; Swiss francs; Danish and Norwegian krone; and Swedish
The fund will use a "sampling" methodology, meaning it won't own
all the securities in the index to achieve its objective of
tracking the index. The underlying index is generated and published
under an agreement between Standard & Poor's and Credit Suisse,
the filing said.
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