Invesco PowerShares, the fourth largest exchange traded fund provider, is working on two new income generating funds, one to provide access to emerging market debt and another to dividend paying U.S. stocks.
According to a SEC filing, the PowerShares S&P 500 High Dividend Portfolio (NYSEArca: SPHD) will try to reflect the performance of the PS&P 500 High Dividend Index, which selects 75 stocks from a pool of 100 stocks that have historically provided high dividends and exhibited relatively low volatility. Additionally, the index weights stocks according to their yield, with the highest dividend-yielding stocks receiving the heaviest allocations.
The new dividend offering will compete with the likes of SPDR S&P Dividend ETF (NYSEArca: SDY), which yields 3.17%; iShares High Dividend Equity Index Fund (NYSEArca: HDV), which yields 2.83%; and Vanguard High Dividend Yield ETF (NYSEArca: VYM), which yields 2.87%.
According to another SEC filing, the PowerShares Fundamental Emerging Markets Local Debt Portfolio will try to reflect the performance of the Citi RAFI Sovereign Emerging Markets Bond Index, which is comprised of bonds issued by 14 emerging market governments. No ticker symbol was provided.
The emerging market local debt portfolio follows a fundamental indexing methodology that selects country’s based on GDP, population land area and energy use. Current country exposure includes Brazil, Colombia, Chile, the Czech Republic, Hungary, Indonesia, Malaysia, Mexico, Peru, the Philippines, Poland, South Africa, Thailand and Turkey. Moreover, the bonds have at least one year to maturity and a debt rating of “C.”
The PowerShares emerging market bond fund will be competing with other local currency denominated emerging market debt funds like the WisdomTree Emerging Markets Local Debt Fund ETF (NYSEArca: ELD), which yields 3.61%; Market Vectors Emerging Markets Local Currency Bond ETF (NYSEArca: EMLC), which yields 4.73%; SPDR Barclays Capital Emerging Markets Local Bond ETF (NYSEArca: EBND), which yields 1.23%; and iShares Emerging Markets Local Currency Bond Fund ETF (NYSEArca: LEMB), which yields 3.76%.
For more information on new product launches, visit our new ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.