The Active AlphaQ Fund (PQY) is PowerShares’ largest actively-managed ETF with about $21 million in assets at the end of May 2010. The AlphaQ fund has been one of the few Active ETFs provided by PowerShares that has gained some sort of traction with investors. It was the part of the group of 4 Active ETFs that were launched together by PowerShares in Feb 2008 and now represent the oldest actively-managed ETFs in the US.
Invesco PowerShares
ActiveETFs | InFocus spoke with – Ed McRedmond, Senior Vice President of Institutional & Portfolio Strategies at Invesco PowerShares. Invesco PowerShares was one of the first companies to bring Actively-Managed ETFs to the US market in 2008. Ed talks to us about the outlook for Active ETFs, the capabilities that PowerShares’ hopes to capitalize on to become a leader in Active ETFs.
On Feb 18, 2010, the US Fed announced an increase in the short-term discount rate from 0.25% to 0.75%. This is likely just the first of many more gradual increases in interest rates implemented by the Fed as the year unfolds. So what options to investors have when looking to stash away their cash?
Few investors even consider investing in real estate these days, given how much real estate market has suffered in the past 2-3 years. However, as David Fessler points out, it might be the right time to start considering a contrarian approach to this space. The above expectations housing starts coming in at 590,000 seem to support this view.
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 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.
PMA is an actively-managed ETF part of a group of PowerShares products all launched at the same time. PMA invests at least 80% of its assets in mega-cap securities with market capitalizations greater than the smallest company in the Russell Top 200 Index, which is the fund’s benchmark. However, the fund can invest in securities outside the benchmark as well. PMA invests in securities that are shown to have above-average growth prospects, through analysis of fundamental and behavioural factors.
PLK tries to achieve its objective of “total return” by investing at least 80% of its assets in US government, corporate and agency debt instruments. PLK seeks to provide alpha over the Barclay’s Capital 1–3 Year U.S. Treasury Index. Their strategy involves managing portfolio construction and security selection according to market conditions, macro-economic and sector level factors as well as issue specific factors.
PQZ is an actively managed ETF that invests at least 95% of its assets in 50 US-listed securities based on a methodology which involves rating companies with market caps greater than $400 million and ranking them using AER’s proprietary “NOW” ranking system based on earnings growth, valuations and money flow. The portfolio managers than narrow their universe down to the 2000 largest capitalization securities and then go on to hold 50 of those stocks.
