Invesco PowerShares lowers fees on six ETFs

Dec 1st, 2012 | By | Category: ETF and Index News

Invesco PowerShares, a leading global provider of exchange-traded funds (ETFs), has lowered the fees on six of its ETFs.

Invesco PowerShares lowers fees on six ETFs

Invesco PowerShares has lowered the fees on six ETFs.

Rival ETF providers, including iShares, Vanguard, SPDR and Schwab, have announced similar fee reductions over the past year in what many commentators are calling a ‘price war’.

Ben Fulton, managing director of global ETFs at Invesco PowerShares, said: “We continuously analyse ways to improve our overall ETF product lineup for investors. We believe the lower fees announced today better align the six funds with our existing offerings, and help position the PowerShares family of ETFs for continued growth.”

John Feyerer, head of product strategy & research, added: “To broaden their exposure, investors will often use multiple ETFs within a specific fund category – such as our fundamental-weighted and factor-driven categories. Consistent with this finding, we are lowering fees on our international fundamentals-weighted and high-quality factor-driven ETFs.”

The funds affected are as follows:

Fundamentals Weighted

Ticker Fund Name Old TER New TER
PXF PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio 0.75% 0.45%
PXH PowerShares FTSE RAFI Emerging Markets Portfolio 0.85% 0.49%
PAF PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio 0.80% 0.49%
PDN PowerShares FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio 0.75% 0.49%

Factor Driven

Ticker Fund Name Old TER New TER
IDHQ PowerShares S&P International Developed High Quality Portfolio 0.75% 0.45%
SPHQ PowerShares S&P 500 High Quality Portfolio 0.50% 0.29%

Unlike traditional benchmark indices, FTSE RAFI indices use a weighting structure that embodies four fundamental measures of size: sales, cash flow, book value and dividends. By breaking the link between price and portfolio weight, the strategy does not allow the market to dictate the weight a stock receives in an index. In total, Invesco PowerShares offers 17 ETFs based on the FTSE RAFI Index series.

Factor-driven indexing is a strategy that looks at time-tested indices, such as the S&P 500 Index, and uses a specific factor in order to determine stock selection and weighting. By using a factor such as volatility or beta, rather than market capitalisation, when constructing an index, an entirely new set of objectives and returns may be achieved. Invesco PowerShares offers 12 factor-driven ETFs.

The PowerShares ‘High Quality’ ETFs listed above are based on S&P indices. Quality is determined by S&P Capital IQ’s International Quality Rankings, which reflect the long-term growth and stability of a company’s earnings and dividends. Common stocks do not assure dividend payments. Dividends are paid only when declared by an issuer’s board of directors and the amount of any dividend may vary over time.

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