DOWNERS GROVE, Ill.,
Dec. 1, 2016 /PRNewswire/ -- Invesco
(NYSE: IVZ), a leading global provider of exchange-traded funds
(ETFs), announced today the launch of two new factor ETFs that
blend together high dividend and low volatility exposures. With
these two funds, PowerShares now has 76 ETFs in its, factor
lineup.
Combining high dividend and low volatility factors is
potentially attractive to investors in light of government stimulus
across Asia, Europe and the
United States pushing bond yields to historically low levels
and in certain circumstances into negative territory.
Equity income focused products might be an alternative for some
investors that need a higher level of income than lower yielding
fixed income investments, and can take on the additional risk.
Entering the last few months of 2016 and going into 2017,
several events could spur continued volatility well into 2017,
including the US presidential election, rate uncertainty, and
fallout from Brexit earlier this year. Given this uncertain back
drop, a strategy that looks to blend high dividend payers and low
volatility could benefit investors using an income buffer with
added defensiveness through investing in names that have
demonstrated less sensitivity to market movements.
"Blending factors can be a key to unlocking their
diversification power," said Dan
Draper, Global Head of PowerShares by Invesco. "Combining
high dividend and low volatility factors in our two newest ETFs may
also provide investors with more defensive access to equity income
in the face of uncertain markets."
PowerShares S&P International Developed High Dividend Low
Volatility Portfolio (BATS: IDHD)
IDHD's strategy seeks out
the highest-income-producing equities in international developed
markets, and then incorporates a low volatility overlay, with the
goal of avoiding value traps among high dividend stocks. This
systematic, factor approach allows IDHD to efficiently identify
potentially more attractive valuations when selecting equities
based on the combination of high dividend and low volatility.
IDHD's initial screen is the S&P EPAC Ex-Korea Low
Volatility High Dividend Index methodology, which seeks to select
the 300 highest dividend paying companies within the S&P
Developed Ex-US BMI LargeMidCap Index, a comprehensive benchmark
including stocks from developed markets excluding the United States.
The final screen in IDHD's security selection process chooses
the 100 securities that have demonstrated the lowest volatility
over the trailing 12 months, potentially reducing volatility
associated with dividend strategies by helping avoid names that
have fallen into a value trap scenario.
PowerShares S&P SmallCap High Dividend Low Volatility
Portfolio (BATS: XSHD)
XSHD's strategy also seeks out the
highest-income-producing equities, but instead looks at small cap
companies. From there, XSHD overlays a low volatility screen to
seek out more attractive valuations.
XSHD's initial screen is the S&P SmallCap 600 Low Volatility
High Dividend Index, which seeks to select the highest dividend
paying companies by first screening for the highest 90 dividend
yielding securities in the S&P SmallCap 600 Index, which
measures the small-cap segment of the U.S. equity market.
The final screen in XSHD's security selection process selects
the 60 securities that have demonstrated the lowest realized
volatility over the trailing twelve months, potentially reducing
volatility associated with dividend strategies by helping avoid
names that have fallen into a value trap scenario.
About Invesco
Invesco is an independent investment
management firm dedicated to delivering an investment experience
that helps people get more out of life. NYSE: IVZ;
www.invesco.com.
About PowerShares by Invesco
PowerShares by Invesco is
leading the Intelligent ETF Revolution® through its
family of more than 140 domestic and international PowerShares
exchange-traded funds (ETFs). PowerShares ETFs seek to outperform
traditional benchmark indexes while providing advisors and
investors access to an innovative array of focused investment
opportunities. PowerShares has US franchise assets exceeding
$105 billion as of September 30, 2016. For more information, please
visit us at powershares.com or follow us on Twitter
@PowerShares.
Important Risk Information
Diversification does not guarantee a profit or eliminate the
risk of loss.
Factor investing is investment strategy in which securities are
chosen based on certain characteristics and attributes.
Fixed-income investments are subject to credit risk of the
issuer and the effects of changing interest rates. Interest rate
risk refers to the risk that bond prices generally fall as interest
rates rise and vice versa. An issuer may be unable to meet interest
and/or principal payments, thereby causing its instruments to
decrease in value and lowering the issuer's credit rating.
In general, equity values fluctuate, sometimes widely, in
response to activities specific to the company as well as general
market, economic and political conditions.
There are risks involved with investing in ETFs, including
possible loss of money. Index-based ETFs are not actively managed.
Actively managed ETFs do not necessarily seek to replicate the
performance of a specified index. Both index-based and actively
managed ETFs are subject to risks similar to stocks, including
those related to short selling and margin maintenance. Ordinary
brokerage commissions apply. The Fund's return may not match the
return of the Index.
Securities that pay high dividends as a group can fall out of
favor with the market, causing such companies to underperform
companies that do not pay high dividends.
There is no assurance that such ETFs will provide low
volatility.
Investments focused in a particular industry or sector are
subject to greater risk, and are more greatly impacted by market
volatility, than more diversified investments.
IDHD:
The risks of investing in securities of foreign
issuers can include fluctuations in foreign currencies, political
and economic instability, and foreign taxation issues.
Financial information related to foreign securities may be less
reliable. Market quotations may not be readily available for some
securities, and those securities may be fair valued which may be
different than if the security had been valued using market
quotations. There is no assurance that the Fund could sell a
security for the value established for it at any time.
Stocks of medium-sized companies tend to be more vulnerable to
adverse developments, may be more volatile, and may be illiquid or
restricted as to resale.
The Fund is non-diversified and may experience greater
volatility than a more diversified investment.
XSHD:
The Fund is non-diversified and may experience
greater volatility than a more diversified investment.
Stocks of small-capitalization companies tend to be more
vulnerable to adverse developments, may be more volatile, and may
be illiquid or restricted as to resale than large companies.
An investment cannot be made into an index.
Shares are not individually redeemable and owners of the Shares
may acquire those Shares from the Funds and tender those shares for
redemption to the Funds in Creation Unit aggregations only,
typically consisting of 50,000, 75,000, 100,000 or 200,000
Shares.
PowerShares® is a registered trademark of Invesco
PowerShares Capital Management LLC, investment adviser. Invesco
PowerShares Capital Management LLC (PowerShares) and Invesco
Distributors, Inc., ETF distributor, are indirect, wholly owned
subsidiaries of Invesco Ltd.
Before investing, investors should carefully read the
prospectus/summary prospectus and carefully consider the investment
objectives, risks, charges and expenses. For this and more complete
information about the Fund call 800 983 0903 or visit
invescopowershares.com for the prospectus/summary
prospectus.
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SOURCE Invesco Ltd.