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PowerShares Canada launches first low-volatility Canadian equity index ETF

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Invesco Canada has listed the nation’s first low-volatility Canadian equity index exchange traded fund – the PowerShares S&P/TSX Composite Low Volatility Index ETF [TSX: TLV].

Also added today to the PowerShares lineup of intelligent ETFs are Canada’s first high-beta index ETFs: PowerShares S&P/TSX Composite High Beta Index ETF [TSX: THB] and PowerShares S&P 500 High Beta (CAD Hedged) Index ETF [TSX: UHB].

PowerShares’ low-volatility offerings, TLV and the recently launched PowerShares S&P 500 Low-Volatility (CAD Hedged) Index ETF [TSX: ULV], are designed to provide investors with core exposure to Canadian and US equities, while offering a measure of protection against market downturns. Meanwhile, the high-beta ETFs, THB and UHB, allow investors to potentially capitalise on bull markets by adding beta to their portfolio.

“Be it a bull or bear market, PowerShares’ suite of high-beta/low-volatility ETFs now gives Canadian investors the tools needed to respond to changing market environments,” says Michael Cooke (pictured), Head of Distribution for PowerShares Canada.

Using a transparent index methodology created by S&P Indices, one of the world’s leading index providers, TLV is designed to give investors exposure to the 50 stocks from the S&P/TSX Composite Index with the lowest realised volatility, or standard deviation, over the past 252 trading days, rebalanced on a quarterly basis.

“With a management fee of just 30 basis points, TLV provides investors with a simple and cost-effective way to gain exposure to a diversified portfolio of low-volatility Canadian equities,” says Cooke. “As a core equity holding, Canadian investors are finding that low-volatility strategies can improve a portfolio’s risk-return profile.”

Meanwhile, THB is designed to give investors exposure to the 50 stocks in the S&P/TSX Composite Index with the highest beta (ie, sensitivity to changes in market returns), while UHB provides exposure to the 100 stocks in the S&P 500 Index with the highest beta.

 

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