PowerShares Canada has listed three new smart beta ETFs on the Toronto Stock Exchange (TSX). All three ETFs have now closed the initial offerings of units and will be available for trading on TSX when the market opens today.
The new ETFs are: PowerShares FTSE RAFI Canadian Small-Mid Fundamental Index ETF (PZC); PowerShares FTSE RAFI US Fundamental Index ETF (PXS); and the PowerShares FTSE RAFI Global+ Fundamental Index ETF (PXG).
The new ETFs each employ the FTSE RAFI Fundamental Index strategy, which selects and weights constituents in the index based on four fundamental measures of size: the five-year averages for sales, cash flow and dividends, as well as current book value.
"The strategy looks beyond the simplistic cap-weighted index to assess the true economic size of each company and weight it accordingly," says Jamie Kingston, Senior Vice President, Product Management and Development, Invesco Canada. "By breaking the link between price and portfolio weight, fundamental index strategies do not allow the market to dictate the weight a stock receives in an index."
"We are thrilled to continue our longstanding relationship with PowerShares Canada and congratulate them on the launch of their three new ETFs that track our indices," says Jacqueline O'Flanagan, managing director of Canada for FTSE Group. "It's great to see the steady growth of smart beta ETFs in the Canadian market."
"PowerShares Canada has been a great partner in not just making these ideas available to Canadian investors through ETFs, but in educating investors on their merits," says Jason Hsu, vice chairman of Research Affiliates. "The Fundamental Index approach is a great way to access any equity market using less expensive, more transparent strategies. It's wonderful to see it continue to gather momentum worldwide."
PZC is the first Canada-listed fundamental index ETF to provide exposure to Canadian small- and mid-cap companies. It seeks to replicate, before fees and expenses, the performance of the FTSE RAFI Canada Mid-Small Index. PZC invests, directly or indirectly, primarily in Canadian equity securities of small- and medium-sized companies.
The FTSE RAFI Canada Mid-Small Index is comprised of the constituents from the FTSE Canada All Cap Index that are not constituents of the FTSE RAFI Canada 100 Index.
PXS seeks to replicate, before fees and expenses, the performance of the FTSE RAFI US 1000 Index. PXS invests, directly or indirectly, primarily in US equity securities.
The FTSE RAFI US 1000 Index is comprised of the 1,000 US companies with the largest fundamental value that are included in the FTSE US All Cap Index. This strategy is also available for purchase in US dollars, listed on TSX as PXS.U.
PXG seeks to replicate, before fees and expenses, the performance of the FTSE RAFI All World 3000 Index. PXG invests, directly or indirectly, primarily in companies with the highest fundamental weightings from across both developed and emerging markets globally.
The FTSE RAFI All World 3000 Index is comprised of 3,000 developed- and emerging-market companies with the largest fundamental value that are included in the FTSE Global All Cap Index. This strategy is also available for purchase in US dollars, listed on TSX as PXG.U.