Invesco PowerShares Capital Management is to waive its unitary fee for the four new ETFs based on Keefe, Bruyette & Woods, Inc (KBW) indexes that are expected to begin trading 1 November on the NYSE Arca.
The portfolios provide investors with targeted access to the bank, capital markets and insurance sectors. The ETFs are: PowerShares KBW Bank; PowerShares KBW Capital; PowerShares KBW Insurance; and Banking Index Banking Portfolio.
“KBW is well known for producing industry-leading research on the financial services sector and the KBW indexes are widely used by industry professionals as performance benchmarks,” says Ben Fulton (pictured), Invesco PowerShares managing director of global ETFs. “Accordingly, we are very excited to expand our partnership with KBW with four additional ETFs that provide precise access to key financial sub-sectors. In order to ease the transition for investors that would like to continue to retain their portfolio’s exposure to the KBW financial Indexes, we are waving the unitary fee on these four ETFs through February 1, 2012. We are able to take this unprecedented step with the full support from our key partners who are also waiving their fees.”
KBW research reveals that each sub-sector of the financial services sector responds differently to various economic indicators. KBW indexes are clearly defined; offering investors pure exposure to each individual sector, without overlapping components or including unwanted securities.
“Financial services is the second largest sector in the S&P 500, accounting for 16% of the index’s overall weight, and targeted allocation to this sector should be considered a core part of any diversified portfolio,” said Frederick Cannon, director of research at KBW. “With these new ETFs, investors can target says in specific sub-sectors, taking advantage of a changing equity environment in which many companies are undervalued and financials are becoming more attractive.”
Public filings show that effective 24 October, 2011, State Street changed the underlying indexes and names for the SPDR KBW funds, and began using S&P as the new index provider. Invesco PowerShares is now the new exclusive licensee of the KBW Indexes effective 1 November, 2011.
The PowerShares KBW Bank Portfolio (KBWB) is based on the KBW Bank Index. The Fund will normally invest at least 90%of its total assets in securities that comprise the Underlying Index. The Index is a float adjusted modified-market capitalisation-weighted index that seeks to reflect the performance of companies that do business as banks or thrifts that are publicly-traded in the U.S. The Index is compiled, maintained and calculated by Keefe Bruyette & Woods, Inc. and is composed of approximately 24 companies representing leading national money centres and regional banks or thrifts.
The PowerShares KBW Capital Markets Portfolio (KBWC) is based on the KBW Capital Markets Index. The Fund will normally invest at least 90% of its total assets in securities that comprise the Underlying Index. The Index is a float adjusted modified-market capitalisation-weighted index that seeks to reflect the performance of companies that do business as broker-dealers, asset managers, trust and custody banks or exchanges that are publicly traded. The Index is compiled, maintained and calculated by KBW.
The PowerShares KBW Insurance Portfolio (KBWI) is based on the KBW Insurance Index. The Fund will normally invest at least 90% of its total assets in securities that comprise the Underlying Index. The Index is a float adjusted modified-market capitalisation-weighted index that seeks to reflect the performance of companies in the insurance industry that are publicly traded in the US The Underlying Index is compiled, maintained and calculated by KBW and is composed of 24 companies representing approximately three-quarters of the market capitalisation of the entire US public insurance company universe.
The PowerShares KBW Regional Banking Portfolio (KBWR) is based on the KBW Regional Banking Index. The Fund will normally invest at least 90% of its total assets in securities that comprise the Underlying Index. The Index is an equal weighted float-adjusted market capitalisation index that seeks to reflect the performance of publicly traded companies that do business as regional banks or thrifts listed on US.stock markets. The Index is compiled, maintained and calculated by KBW and is composed of approximately 50 companies.
