Invesco subsidiary PowerShares Capital Management has announced plans to launch four new international exchange-traded funds based on the FTSE RAFI fundamental indices covering Europe, Jap
Invesco subsidiary PowerShares Capital Management has announced plans to launch four new international exchange-traded funds based on the FTSE RAFI fundamental indices covering Europe, Japan, the Asia-Pacific region outside Japan, and developed markets excluding the US.
‘We are pleased to partner with Research Affiliates and FTSE to offer intelligent exposure to global markets using the ETF structure and Research Affiliates Fundamental Index strategies,’ says PowerShares Capital Management president Bruce Bond.
‘We believe that these portfolios offer material enhancements to the cap-weighted ETFs currently available in the space. We offer investors opportunities to participate in the four new international portfolios that seek to provide better exposure and the potential for outperformance of traditional cap-weighted indexes.’
The four PowerShares portfolios are based on FTSE RAFI indexes designed to track the performance of the largest equities in each country or region selected based on four equally-weighted fundamental measures of firm size: book value, income, sales and dividends. The 1,000 equities in each country or region with the highest fundamental strength are weighted according to their fundamental scores.
The four ETFS are the PowerShares FTSE RAFI Europe Portfolio, PowerShares FTSE RAFI Japan Portfolio, PowerShares FTSE RAFI Asia Pacific Ex-Japan Portfolio and PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio.
Says Research Affiliates chairman Rob Arnott: ‘Research Affiliates, FTSE and PowerShares Capital Management are partners in innovation introducing investment alternatives to traditional cap-weighted indexes.
‘Fundamental index strategies have produced consistently higher returns with lower risk compared to cap-weighted indexes. Our research has found that fundamental index strategies have outperformed cap-weighted strategies in international markets, on average, by more than 250 basis points.’
Adds FTSE Americas president Jerry Moskowitz: ‘We are pleased that PowerShares has chosen to base these new ETFs on the FTSE RAFI Europe, Japan, Asia Pacific ex-Japan and Developed Markets ex-US indices. These indexes open up the fundamental approach to investors looking for exposure to global markets.’
