) PowerShares, the fourth-largest U.S. ETF issuer, announced
Tuesday the PowerShares Fundamental suite of
recently passed the $5 billion assets under management,
underscoring the rising popularity of ETFs that use alternative
methodologies to weighting by market capitalization.
"Invesco PowerShares has been focused on providing investors
with the broadest and most diverse family of 'smart beta' ETFs
since the firm was founded," said Andrew Schlossberg, head of
global ETFs. "Invesco PowerShares pioneered Fundamentals Weighted
ETFs introducing the first broad-based US 1000 portfolio back in
2005, followed by international portfolios in 2007, and the first
fixed-income portfolio in 2010."
PowerShares lists fundamentally-weighted ETFs in the U.S.,
Canada and Europe. Those funds are based on the Research
Affiliates Fundamental Index methodology that includes the use of
book value, cash flow, sales and dividends, to select and weight
Alternative weighting methodologies have proven increasingly
popular with investors with non-market cap-weighted ETFs
accounting for 42 percent of inflows to equity-based ETFs through
the first four months of this year, according to BlackRock.
More importantly, some of the PowerShares RAFI ETFs have
outpaced their cap-weighted rivals
. For example, the PowerShares FTSE RAFI US 1000 Portfolio (NYSE:
) is up 15.2 percent year-to-date compared to a 12.4 percent gain
for the iShares Russell 1000 Index Fund (NYSE:
). PRF, which debuted in late 2005, has over $2 billion in
The $646.7 million PowerShares FTSE RAFI US 1500 Small-Mid
) has outperformed assorted small- and mid-cap ETFs this year
with a gain of 17.3 percent. PRF and PRFZ are considered the
flagship funds in the PowerShares RAFI suite.
PRF and PRFZ "have established five-year and since inception
track records that demonstrated their effectiveness over varying
market cycles. We believe the PowerShares Fundamental ETFs
provide investors an important alternative to passive
cap-weighted strategies, and also represent great value compared
to actively managed portfolios when relative performance and fees
are considered," said John Feyerer, head of product strategy
& research at Invesco PowerShares, in a statement.
Other popular ETFs in the suite include the PowerShares FTSE
RAFI Emerging Markets Portfolio (NYSE:
), which has nearly $323 million in AUM, and the PowerShares FTSE
RAFI Developed Markets ex-U.S. Portfolio (NYSE:
). PXF has $543.3 million in AUM.
For more on ETFs, click
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