Invesco Ltd. (NYSE:IVZ)'s PowerShares unit, the fourth-largest U.S. issuer of exchange-traded funds, launched two new factor-based ETFs on Thursday. PowerShares is one of the largest issuers of smart beta ETFs and with Thursday's launches the company now issues nearly 100 such ETFs.
The PowerShares S&P 500 Value With Momentum Portfolio (BATS: SPVM) allows investors to access the momentum and value factors, two of the most widely followed investment factors. SPVM tracks the S&P 500 High Momentum Value Index.
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SPVM's Index And Holdings
SPVM's underlying index tracks the performance of stocks in the S&P 500 Index that have the highest value and momentum score. Constituents are selected through a two-step process: first, the 200 stocks with the highest value scores; second, 100 securities with the highest positive momentum scores, according to PowerShares.
SPVM holds 99 stocks, none of which account for more than 2.5 percent of the new ETF's weight. The new ETF allocates about 53 percent of its combined weight to financial services and utilities stocks. Industrial and healthcare names combine for another 19 percent. SPVM's top 10 holdings combine for about 17 percent of the ETF's weight. The new ETF charges 0.3 percent per year, or $30 on a $10,000 investment.
XSHQ's Index And Holdings
The PowerShares S&P SmallCap Quality Portfolio (BATS: XSHQ) is the other new PowerShares ETF. That new ETF follows the S&P SmallCap 600 Quality Index.
That index is composed of 120 securities in the S&P SmallCap 600 Index that have the highest quality score, which is calculated based on the average of three fundamental measures: return on equity, accruals ratio and financial leverage ratio, according to PowerShares.
XSHQ holds 114 stocks, none which exceed a weight of 3.1 percent. Industrial and consumer discretionary stocks combine for just over 47 percent of XSHQ's weight. Technology and financial services stocks combine for another 37 percent.
XSHQ charges 0.29 percent on an annual basis, or $29 on a $10,000 stake. Both new ETFs are listed on Bats, adding to that exchange's growing ETF lineup.
Year-to-date, Bats has welcomed 26 ETFs to its U.S. market. In the first quarter of 2017, Bats welcomed a total of 23 ETFs from eight issuers to the Bats ETF Marketplace, and won 33 percent of all new U.S. ETF listings. There are now 161 ETFs listed on Bats ETF Marketplace, from 30 different issuers, according to Bats.
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