Invesco has announced the listing of Canada’s first low-volatility Canadian equity index ETF, the PowerShares S&P/TSX Composite Low Volatility Index ETF (TLV), along with the country’s first high-beta index ETFs: the PowerShares S&P/TSX Composite High Beta Index ETF (THB) and the PowerShares S&P 500 High Beta (CAD Hedged) Index ETF (UHB).
PowerShares’ low-volatility offerings, TLV and the recently launched PowerShares S&P 500 Low-Volatility (CAD Hedged) Index ETF (ULV), are designed to provide investors with core exposure to Canadian and US equities, while offering a measure of protection against market downturns. Meanwhile, the high-beta ETFs, THB and UHB, allow investors to potentially capitalise on bull markets by adding beta to their portfolio.
Commenting on the launch, Michael Cooke, Head of Distribution for PowerShares Canada, said: “Be it a bull or bear market, PowerShares’ suite of high-beta/low-volatility ETFs now gives Canadian investors the tools needed to respond to changing market environments”.
Using a index methodology created by S&P Indices, a leading index provider, TLV is designed to give investors exposure to the 50 stocks from the S&P/TSX Composite Index with the lowest realised volatility, or standard deviation, over the past 252 trading days, rebalanced on a quarterly basis.
“With a management fee of just 30 basis points, TLV provides investors with a simple and cost-effective way to gain exposure to a diversified portfolio of low-volatility Canadian equities,” said Cooke. “As a core equity holding, Canadian investors are finding that low-volatility strategies can improve a portfolio’s risk-return profile.”
Meanwhile, THB is designed to give investors exposure to the 50 stocks in the S&P/TSX Composite Index with the highest beta (i.e., sensitivity to changes in market returns), while UHB provides exposure to the 100 stocks in the S&P 500 Index with the highest beta.
TLV and THB have annual management fees of 0.30%, while UHB and ULV charge 0.35%. All the funds are listed on the Toronto Stock Exchange (TSX).