Size isn’t everything, in beta-weighted ETF plans from Invesco PowerShares

Invesco PowerShares is planning ETFs based on benchmarks with shares whose movements follow market moves, but are more magnified, in another sign of trackers looking beyond size as the basis for portfolio construction.

The constituents will be selected on the basis of being the stocks in their respective markets that are most sensitive to changes in market returns.

They are designed for investors who yearn for a way to express a bullish strategic or tactical view of companies, according to Alka Banerjee, vice president of strategy and global equity indices at S&P Indices.

Index providers are taking increasingly elegant ways to satisfy the changing tastes – or dislikes – of their customers.

Credit Suisse Asset Management, for example, is planning global bond ETF product with weightings in debt based on fundamental assessments of various countries’ economic strength. These include debt to GDP, budget deficit to GDP and current account balance to GDP.

CSAM’s product will be based on Barclays Capital Fiscal Strength Indices, but it also has variation-on-a-theme ETFs in commodities and equities.

In the case of Invesco PowerShares’ planned ETFs, the underlying international indices will be provided by S&P Indices, and will each follow 200 stocks in developed and developing markets.

The benchmarks are called the S&P BMI International Developed High Beta index and the S&P BMI Emerging Markets High Beta index.

The S&P BMI International Developed High Beta Index has the 200 most market-sensitive constituents from the 24 countries in the S&P Developed Ex-US-Korea LargeMidCap index.

The S&P BMI Emerging Markets High Beta index will also have a list of the 200 most market-sensitive constituents, as applied to the S&P Emerging Plus LargeMidCap index, whichi has 21 countries.


Close Window
View the Magazine

You need to fill all required fields!