Exchange-traded fund developer Invesco PowerShares Capital Management plans to list two ETFs on Friday that will give investors access to what it calls “high-beta strategies,’’ covering the emerging and international developed markets.
The two ETFs, the PowerShares S&P Emerging Markets High Beta Portfolio and the PowerShares S&P International Developed High Beta Portfolio, are expected to begin trading February 24 on the NYSE Arca exchange
The emerging markets portfolio is based on the S&P BMI Emerging Markets High Beta Index and will invest at least 90% of its total assets in the securities of companies that comprise the index.
Meanwhile, the international product is based on the S&P BMI International Developed High Beta Index and will invest at least 90% of its assets in companies within that index.
Ed McRedmond, senior vice president of institutional and portfolio strategies at Invesco PowerShares, told Money Management Executive that since the start of the year, “flows have been good and fairly widespread. Somewhat of a change from what we’ve seen over the course of last year. A lot more products have seen nice flows on a weekly or daily basis, where last year it was less so.”
In mathematical calculation known as a regression analysis, a beta of 1 indicates that a security's price will move in tandem with its market. A beta of greater than 1 indicates that the security's price will be more volatile than the market.
For example, if a stock’s beta is 1.2, it's theoretically 20% more volatile than the market. http://www.investopedia.com/terms/b/beta.asp#axzz1n97gZjh6
PowerShares launched its first exchange-traded products covering high-beta and low volatility products for the U.S. market in May, with the PowerShares S&P 500 High Beta and the PowerShares S&P 500 Low Volatility portfolios.
It then followed up in January with two global low volatility products: the PowerShares S&P Emerging Markets Low Volatility Portfolio and the PowerShares S&P International Developed Low Volatility Portfolio.
Currently, the set of funds has more than $1.3 billion in assets under management.
The S&P 500 low volatility and high beta products, and the international developed low volatility and high beta products charge 25 basis points.
The PowerShares Low Volatility and High Beta Emerging market ETFs charge 29 basis points.