Invesco PowerShares has launched the PowerShares S&P 500 High Dividend Low Volatility UCITS ETF on London Stock Exchange. Further listings across selected European countries are to follow.
The ETF, the first of its kind in Europe, seeks investment results that correspond to the price and yield of the S&P 500 Low Volatility High Dividend Net Total Return Index. The PowerShares S&P 500 High Dividend Low Volatility UCITS ETF seeks to provide a smoother path to US equity income by investing in the 50 least-volatile high dividend-yielding stocks in the S&P 500 Index while meeting diversification, volatility and tradability requirements (to achieve a balance between dividend yield and volatility).
The benchmark index screens the broad market S&P 500 Index constituents and ranks them in descending order of trailing 12 months dividend yields. The top 75 stocks are selected and the number of stock per GICS (Global Industry Classification Standard)** sector is capped at 10. The 50 lowest realised volatility stocks are selected and weighted by dividend yield (each constituent is capped at 3 per cent and each GICS sector is capped at 25 per cent).
The launch of this product is part of Invesco PowerShares’ ongoing strategy to offer new and innovative solutions to the smart beta market and to further strengthen its core US equity exposure proposition.
Bryon Lake, Head of Invesco PowerShares – EMEA, says: “The US plays an important role in investors’ portfolios as the largest single country economy in the world. By expanding our range of smart beta tools, we can help investors gain more refined exposure to US equities.”
“We’re particularly excited about the PowerShares S&P 500 High Dividend Low Volatility UCITS ETF as it combines two of the most proven and relevant factors. The current climate of low interest rates means investors are continuing to seek yield, and are especially wary of the potential of increased volatility. By combining the high dividend and low volatility screens, we’re seeking to present investors with the best of both worlds.”
The PowerShares S&P 500 High Dividend Low Volatility UCITS ETF is planned to be listed across the following exchanges:
Irish Stock Exchange – 11 May (listing complete)
Euronext Paris – 18 May
Borsa Italiana – 21 May
Deutsche Börse – 21 May
SIX Swiss Exchange – (date TBC)
The launch of the PowerShares S&P 500 High Dividend Low Volatility UCITS ETF comes just six months after the unveiling of the PowerShares Global Buyback Achievers UCITS ETF, Europe’s first global buyback ETF. The product has currently USD120 million in assets under management.