Invesco PowerShares, the Wheaton, Ill.-based fund sponsor best
known for its Nasdaq ETF (NasdaqGM:QQQQ), received approval from
the Securities and Exchange Commission to change the indexes
underlying five of its funds, in a move designed to improve its
The index changes, which took effect today, affect PowerShares'
three asset allocation funds that used indexes from New Frontier
Advisors and two of its specialized products.
"We wanted to put the funds in a better position to provide
investors with the potential for improved risk-adjusted returns and
position our family of ETFs for continued growth," Ed McRedmond, an
Invesco PowerShares executive in charge of institutional and
portfolio strategies, said in a telephone interview.
The changes to the asset allocation funds are as follows:
- The Ibbotson Alternative Completion Portfolio replaces the
Autonomic Growth NFA Global Asset Portfolio (NYSEArca:PTO);
- The PowerShares Riverfront Tactical Balanced Growth Portfolio
replaces the Autonomic Balanced Growth NFA Global Asset Portfolio
- The PowerShares Riverfront Tactical Growth & Income
Portfolio replaces the Autonomic Balanced NFA Global Asset
"While a firm like New Frontier [Advisors] has a very strong
institutional reputation, in the retail financial adviser
community, which the asset allocation funds are designed for,
advisers may better recognize RiverFront and Ibbotson," McRedmond
The two other index changes are:
- The S&P 500 High Quality Portfolio replacing the Value
Line Timeliness Select Portfolio (NYSEArca:PIV);
- The Morningstar StockInvestor Core Portfolio replacing the
Value Line Industry Rotation Portfolio (NYSEArca:PYH).
PowerShares has only switched underlying indexes on its funds
once before, when it expanded the reach of its private equity
offering, the Global Listed Private Equity Portfolio
(NYSEArca:PSP), to encompass firms outside the U.S. He didn't rule
out further index changes for PowerShares down the road.
McRedmond noted that PowerShares filed with the SEC for
permission to change the underlying index of its high-yield bond
fund, the High Yield Corporate Bond Portfolio (NYSEArca:PHB) from a
capitalization-weighted index provided by Wachovia to a
fundamental-weighted index from Research Affiliates LLC, the
Newport Beach, Calif.-based investment manager.
Invesco PowerShares expects that change to take place once SEC
approval is obtained, according to McRedmond.
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