ActiveETFs | InFocus

Date Launched: Nov 20, 2009

Links: Website, Factsheet, Prospectus

Investment Strategy:

PSR is the latest of five actively-managed ETFs launched by PowerShares. PSR looks to invest at least 80% of its assets in companies operating in the US Real Estate industry (they derive >50% of revenues from real estate operations or invests >50% of its assets in US real estate) and those which are included in the FTSE NAREIT Equity REITs Index. The portfolio managers, Invesco Institutional, identify attractive securities through quantitative and statistical analysis, in order to achieve high total return in terms of capital appreciation and current income. PSR is also allowed to take temporary defensive positions in cash.

Portfolio Managers:

Investment decisions for PSR are made by Invesco Institutional, and involve the following portfolio managers in day-to-day management of the fund:

Joe V. Rodriquez Jr., Portfolio Manager – Is the lead manager overseeing the investment team and has been responsible for the fund since inception. He’s been involved with Invesco Institutional since 1990.

Mark Blackburn, Portfolio Manager – Has been associated with Invesco Institutional since 1998.

Paul S. Curbo, Portfolio Manager – Has been associated with Invesco Institutional since 1998.

James W. Trowbridge, Portfolio Manager – Has been associated with Invesco Institutional since 1989.

Ping-Ying Wang, Portfolio Manager – Has been associated with Invesco Institutional since 1998.

The Numbers:

Expense Ratio – 0.80%

Average Bid-Ask Ratio – 0.24%

Average Volume – 4,371 shares

What’s special about it?

1. PSR is the only actively-managed ETF on the market that provides focused exposure to the US Real Estate market.

2. While the portfolio evaluation process is only repeated once per month, the managers have discretion on when they can perform trades or how frequently they want to refresh the model.

Analysis:

Positives –

- Looking at the performance chart, PSR has quite convincingly outperformed the S&P500, which should give investors confidence in the fund managers.

- PSR is part of a very small group of 4-5 Active ETFs that have exceeded a market cap of $10 million, even though in the grander scheme of things, $10 million isn’t much. However, it does indicate that there is some investor interest out there.

Negatives –

- The low level of trading volumes will still hamper liquidity and will hurt investors looking to move in or out of PSR.

- Whether the US real estate market is completely out of the wood is another debate all together but investors looking to get into PSR should be wary of the commercial real estate market, which still faces numerous challenges.

Performance since inception vs S&P500:

Disclosure: No position in above-mentioned names
 
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