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Invesco PowerShares to mark 10th anniversary of FTSE RAFI ETFs


The Invesco PowerShares FTSE RAFI range in EMEA, launched in 2007 by Invesco PowerShares, will celebrate its 10th year since inception in November.

“In my opinion, the rise of alternative-weighted strategies continues unabated with the RAFI strategies’ strong long term investment performance being largely driven by the market’s increasing preference for Value-oriented stocks compared to Growth-oriented ones. As a value-tilted strategy based on fundamentals, the RAFI methodology benefits from increased market preference for value style stocks,” says Nicolas Samaran, head of product development at PowerShares (EMEA).
The underlying index of the PowerShares FTSE RAFI US 1000 UCITS ETF separates the link between share price and portfolio weight and instead selects holdings based on four fundamental measures of company size: book value, cash flow, sales, and dividends. Based on these measures the index serves to trim stocks that have performed well, while adding out-of-favour shares that have underperformed.
Samaran adds: “This disciplined, rules-based methodology lies at the heart of smart beta investing, and is a contrarian method. November 2017 marks a decade that we have launched the PowerShares FTSE RAFI US 1000 UCITS ETF. Since then, smart beta has been increasingly seen as a tool of choice to provide greater control in meeting investment objectives and is playing an increasing role in investment portfolios throughout Europe.”
Since inception in November 2007, the PowerShares FTSE RAFI US 1000 UCITS ETF has returned 100.67 per cent (NAV cumulative performance). In comparison, the S&P 500 Net Index has returned 82.18 per cent over the same time period.
Caroline Baron, head of PowerShares ETF Distribution – UK, says: “The management fees across the suite of Invesco PowerShares products are reviewed on a regular basis, to ensure rates remain competitive and in line with the rest of the industry. These adjustments across the five fundamentally-weight products are welcome news, giving even better value for money.”
Invesco PowerShares was the first-to-market with smart beta ETFs. Since 2003 in the US and 2007 in Europe, it has been offering a selection of ETFs that track “next generation” indices; indices that go beyond merely tracking a particular market. It offers an alternative to traditional market-capitalisation-weighted indexing, offering solutions with the objective to outperform through intelligent security selection and weighting.

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