Invesco PowerShares launches smart beta UK and EM equity ETFs

Jun 3rd, 2016 | By | Category: Equities

Global exchange-traded fund provider Invesco PowerShares has launched two new ETFs offering smart beta exposure to UK-listed and emerging market equities: the PowerShares FTSE UK High Dividend Low Volatility UCITS ETF (UKHD LN) and the PowerShares FTSE Emerging Markets High Dividend Low Volatility UCITS ETF (EMHD LN).

Invesco PowerShares launches smart beta UK and emerging markets equity ETFs

Bryon Lake, Head of Invesco PowerShares – EMEA.

Bryon Lake, Head of Invesco PowerShares – EMEA, commented in a statement: “These new ETFs complement our existing High Dividend Low Volatility range and, collectively, provide a suite of products seeking to help in the search for yield in the UK and emerging markets, while operating in an uncertain equity environment.

“Dividend strategies and low volatility strategies are two of the most popular factors, according to Invesco’s European Investor Research. By combining the high dividend and low volatility screens, we are seeking to present the best of both factors for UK and emerging markets equity exposure.”

The PowerShares FTSE UK High Dividend Low Volatility UCITS ETF, which trades in British pounds, tracks the performance of the FTSE UK High Dividend Low Volatility Net Total Return Index. The index is constructed by initially ranking all constituents of the FTSE 350 ex-Investment Trusts Index in descending order according to their trailing 12 month dividend yields. The top 75 stocks are selected. Of these the 50 companies with the lowest volatility are selected to form the benchmark. The weight of each constituent is capped, such that the maximum individual company weight does not exceed 3% and the maximum ICB industry weight does not exceed 25%. The fund has a total expense ratio of 0.39%.

The PowerShares FTSE Emerging Markets High Dividend Low Volatility UCITS ETF, which trades in US dollars, tracks the performance of the FTSE Emerging High Dividend Low Volatility Net Total Return Index. The index is constructed by initially ranking all constituents of the FTSE Emerging Index in descending order according to their trailing 12 month dividend yields. The top 150 stocks are selected. Of these the 100 companies with the lowest volatility are selected to form the benchmark. The weight of each constituent is capped, such that the maximum individual company weight does not exceed 3% and the maximum ICB industry weight does not exceed 25%. The fund has a TER of 0.49%.

The launch follows the listings of the PowerShares EURO STOXX High Dividend Low Volatility UCITS ETF in January 2016 and the PowerShares S&P 500 High Dividend Low Volatility UCITS ETF in May 2015.

Ron Bundy, CEO of Benchmarks of FTSE Russell, added: “The FTSE UK and FTSE Emerging Markets High Dividend Low Volatility Indexes are benchmarks designed to achieve a balance between dividend yield and volatility. Measuring the performance of the least-volatile high dividend-yielding stocks in the FTSE UK and FTSE Emerging Markets Indexes. They provide market participants with an innovative way to meet diversification, volatility and tradability requirements, thus further enhancing their smart-beta strategies.”

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