May 31, 2011

Portfolio Products Roundup: Invesco Launches Battery of Funds; Russell, Axioma Go Long-Only

Palmer Square initiates its first mutual fund; Global X christens fertile ETF

In the week leading up to Memorial Day, new product launches included Invesco PowerShares’ introduction of nine “Fundamental Pure Style” ETFs, Russell and Axioma’s new suite of “long-only” factor-based indexes and Palmer Square Capital Management’s launch of its first mutual fund. In addition, Global X introduced its new ETF focused on fertilizers.

Invesco PowerShares Introduces Nine ‘Fundamental Pure Style’ ETFs

Invesco PowerShares Capital Management, a global provider of exchange-traded funds, announced May 23 plans for a suite of nine “Fundamental Pure Style” ETFs based on the Research Affiliates Fundamental Index (RAFI) methodology.

PowerShares Fundamental Pure Large Growth Portfolio (PXLG)and PowerShares Fundamental Pure Large Value Portfolio (PXLV) ETFs will be listed on June 16. The full list of portfolios is: Fundamental Pure Large Value Portfolio (PXLV); Fundamental Pure Mid Value Portfolio (PXMV); Fundamental Pure Small Value Portfolio (PXSV); Fundamental Pure Large Core Portfolio (PXLC); Fundamental Pure Mid Core Portfolio (PXMC); Fundamental Pure Small Core Portfolio (PXSC); Fundamental Pure Large Growth Portfolio (PXLG); Fundamental Pure Mid Growth Portfolio (PXMG); and Fundamental Pure Small Growth Portfolio (PXSG).

Invesco will also change the indexes, names and ticker symbols for seven existing ETFs in its Intellidex style/size lineup and switch to RAFI methodology. The rebranded portfolios’ management fees will be reduced to 0.29%, and operating expenses (excluding certain expenses) will be capped at 0.39% until at least August 31, 2012. Each of the portfolios in the group has changed from its corresponding Intellidex Index to its corresponding RAFI index. That full list is:

  • PowerShares Fundamental Pure Large Core (PXLC) on the RAFI Fundamental Large Core Index (was PowerShares Dynamic Large Cap [PJF] on the Dynamic Large Cap Intellidex Index)
  • PowerShares Fundamental Pure Mid Growth (PXMG) on the RAFI Fundamental Mid Growth Index (was PowerShares Dynamic Mid Cap Growth [PWJ] on the Dynamic Mid Cap Growth IntellidexIndex)
  • PowerShares Fundamental Pure Mid Core (PXMC )on the RAFI Fundamental Mid Core Index (was PowerShares Dynamic Mid Cap [PJG] on the Dynamic Mid Cap Intellidex Index)
  • PowerShares Fundamental Pure Mid Value (PXMV) on the RAFI Fundamental Mid Value Index (was PowerShares Dynamic Mid Cap Value [PWP] on the Dynamic Mid Cap Value Intellidex Index)
  • PowerShares Fundamental Pure Small Growth (PXSG) on the RAFI Fundamental Small Growth Index (was PowerShares Dynamic Small Cap Growth [PWT] on the Dynamic Small Cap Growth Intellidex Index)
  • PowerShares Fundamental Pure Small Core (PXSC) on the RAFI Fundamental Small Core Index (was PowerShares Dynamic Small Cap [PJM] on the Dynamic Small Cap Intellidex Index)
  • PowerShares Fundamental Pure Small Value (PXSV) on the RAFI Fundamental Small Value Index (was PowerShares Dynamic Small Cap Value [PWY] on the Dynamic Small Cap Value Intellidex Index)

Russell and Axioma Team Up on New Indexes

Russell Investments and Axioma, Inc. have collaborated to launch a series of long-only large- and small-cap factor indexes. These new Russell-Axioma U.S. Small and Large Cap

Factor Indexes are designed to provide investors with tools to manage their portfolio’s exposure to—and measure their performance against—five individual risk factors within their portfolios.

The series of 10 factor-based indexes includes:

  • Russell-AxiomaU.S.Large Cap High Beta Index
  • Russell-AxiomaU.S.Large Cap Low Beta Index
  • Russell-AxiomaU.S.Large Cap High Volatility Index
  • Russell-AxiomaU.S.Large Cap Low Volatility Index
  • Russell-AxiomaU.S.Large Cap High Momentum Index
  • Russell-AxiomaU.S.Small Cap High Beta Index
  • Russell-AxiomaU.S.Small Cap Low Beta Index
  • Russell-AxiomaU.S.Small Cap High Volatility Index
  • Russell-AxiomaU.S.Small Cap Low Volatility Index
  • Russell-AxiomaU.S.Small Cap High Momentum Index

The Russell-Axioma U.S. Large Cap Factor Indexes start with the members of the U.S. Large-Cap Russell 1000 Index, while the Russell-Axioma U.S. Small Cap Factor Indexes start with the members of the U.S. Small-Cap Russell 2000 Index. Each small- or large-cap index is then reduced down to those securities that meet the requirements of the specific factor index. The resulting small- or large-cap factor indexes are constructed using long-only stock holdings.

Palmer Square Launches First Mutual Fund

Palmer Square Capital Management announced May 20 the introduction of the Palmer Square Absolute Return Fund, its first open-ended mutual fund. Launched in partnership with Montage Investments, the fund’s objective is to seek capital appreciation with an emphasis on absolute (positive) returns and low correlation to the broader equity and bond markets. The fund offers investor and institutional share classes, trading under the symbols PSQAX and PSQIX, respectively.

The fund uses a group of seven institutional managers that operate a broad range of hedge fund-type strategies, including global macro, long/short and event-driven credit, long/short international and domestic equity, and convertible bond arbitrage. It is managed by alternatives veterans Christopher D. Long, founder and president of Palmer Square, and chief investment officer Angie K. Long, a pioneer in credit derivatives and former deputy head of credit trading for North America for JPMorgan Chase & Co.

Global X Launches Fertilizer ETF

Global X Funds launched its Global X Fertilizers/Potash ETF (SOIL) on Thursday. SOIL offers targeted exposure to fertilizer producers around the world, giving investors access to a critical agricultural and commodity sector.

The Global X Fertilizers/Potash ETF tracks the Solactive Global Fertilizers/Potash Index, which is designed to track the performance of the largest and most liquid listed companies globally that are active in some aspect of the fertilizer/potash industry. As of May 23, 2011, the three largest components of the index were CF Industries Holdings Inc., Yara International ASA, and Incitec Pivot Ltd.

Read last week’s Portfolio Products Roundup at AdvisorOne.com

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