PowerShares takes a step forward toward an actively managed exchange traded fund (ETF). Once it’s approved, it will represent the first stock ETF able to invest outside of pre-set benchmarks. Murray Coleman for MarketWatch reports that PowerShares has won the race to be the first provider to offer an actively-managed stock-based ETF. While there are other providers working on actively managed ETFs, PowerShares is the first to file for final approval.
It appears that after four years of work, transparency issues have been overcome, reports Joe Morris for Ignites. PowerShares’ solution is each week stocks would be ranked by a number of variables, such as money-sector flows, stock-money flows and earnings outlooks. Computers would screen for highest returns on equity, making the overall process a weighing of fundamental data, such as revenue and profit margins.
PowerShares’ proposed ETFs are anticipated to launch in the first quarter of 2008 and include Active Alpha Q and Active Multi-Cap.
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