Invesco PowerShares, looking to leverage on the success it's had
with its PowerShares S&P 500 Low Volatility Portfolio
(NYSEArca:SPLV), today is launching another two funds that serve up
low-volatility exposure to different market-capitalization pockets
of the market.
The PowerShares S&P MidCap Low Volatility Portfolio
(NYSEArca:XMLV) will track the S&P MidCap 400 Low Volatility
Index, a benchmark that consists of the 80 least-volatile
securities found in the broader S&P MidCap 400 Index.
In similar fashion, the PowerShares S&P SmallCap Low
Volatility Portfolio (NYSEArca:XSLV) hones in on 120 of the S&P
SmallCap 600 Index's least-volatile stocks. Both XMLV and XSLV will
each have a 0.25 percent expense ratio, meaning investors will be
charged $25 for each $10,000 invested.
The two funds would bring to five the number of PowerShares
. It all began in May 2011 with SPLV, a fund that was not only the
first low-volatility play on the S&P 500 to come to market, but
one that has gathered a loyal following and now boasts $3.36
billion in assets gathered in less than two years.
"Investors continue to embrace low-volatility ETF strategies as
a simple and effective way to maintain equity exposure while
mitigating overall portfolio risk," Ben Fulton, PowerShares
managing director of global ETFs, said in a press release.
Volatility is a measure of equity risk, and the popularity of
low-volatility ETFs with investors comes from the belief that a
focus on low-vol stocks tends to outperform the broader market on
SPLV has been fitting the bill in that regard.
Since inception, SPLV has outperformed the broader S&P 500
by weeding out the more volatile securities. It has gained 23.5
percent, while the broader index rose 16.6 percent in the same
period, according to data provided by PowerShares.
On a risk-adjusted basis, SPLV's returns were double that of the
What's more, SPLV's volatility, as measured by standard
deviation, also came ahead at 13.6 percent compared with 19.5
percent in the S&P 500 since the fund came to market in May
PowerShares hopes the new additions to the low-volatility roster
of funds-which also include an emerging-markets-focused
low-volatility ETF linked to an S&P benchmark, and an
international developed low-volatility portfolio, "EELV" and
"IDLV'-will replicate the success SPLV has had.
Securities will be ranked in the portfolios by measures of
volatility, with the least volatile carrying the most weight in
each respective portfolio. The underlying benchmarks are rebalanced
Permalink | 'copy; Copyright 2009 IndexUniverse LLC. All rights
Don't forget to check IndexUniverse.com's ETF Data
2013 IndexUniverse LLC
. All Rights Reserved.