Invesco Powershares launch Euro Stoxx High Dividend Low Volatility ETF

Jan 25th, 2016 | By | Category: ETF and Index News

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Exchange traded fund provider Invesco PowerShares has launched a new ETF that targets exposure to high dividend paying eurozone stocks while minimising volatility. The PowerShares EURO STOXX High Dividend Low Volatility UCITS ETF (EUHD) began trading in euros on the London Stock Exchange on 8 January 2016.

Invesco Powershares launch Euro Stoxx High Dividend Low Volatility ETF

Bryon Lake, Head of Invesco PowerShares – EMEA.

By tracking firms with high dividend yields the fund seeks to capture a high level of income generation, a significant driver of investment return. Furthermore, screening stocks by volatility attempts to boost the risk/return profile by better protecting portfolio wealth during downturns.

Bryon Lake, Head of Invesco PowerShares – EMEA, said: “We’re very excited about the PowerShares EURO STOXX High Dividend Low Volatility UCITS ETF, which we have launched to potentially help in the search for yield with eurozone stocks, while operating in an uncertain equity environment.

“As our recent European Investor Research as well as recent asset flows have shown, dividend strategies and low volatility strategies are currently two of the most popular factors used as smart beta investments. By combining the high dividend and low volatility screens, we’re seeking to present the best of both worlds for Eurozone equity exposure.”

The fund tracks the Euro Stoxx High Dividend Low Volatility 50 Net Total Return Index, which screens stocks from the broad Euro Stoxx Index based on their 12-month historical volatility and 12-month historical dividend yield. The stocks are ranked in descending order according to their dividend yield and the top 75 stocks are selected with a maximum of 10 securities per country. Secondly, stocks are ranked in ascending order according to their volatility and the top 50 are selected. These final constituents are weighted according to their dividend yield with a cap of 3% per constituent. The index is rebalanced on a quarterly basis.

Hartmut Graf, Chief Executive Officer of STOXX Limited, added: “Our Euro iStoxx High Dividend Low Volatility 50 Index is based on the very liquid Euro Stoxx benchmark. It is the first time that screens for high dividend and low volatility stocks are applied to the renown benchmark. The index offers market participants an innovative way to gain exposure to eurozone companies and further enhance their smart-beta strategies.”

The PowerShares EURO STOXX High Dividend Low Volatility UCITS ETF is scheduled to be rolled out to the Borsa Italiana, Deutsche Borse, and Euronext Paris exchanges on or around 18 January 2016, and on the SIX Swiss Exchange in February 2016.

The fund carries a total expense ratio of 0.30%.

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