PowerShares has broken some new ground in the exchange traded fund (ETF) industry their launch of the first line of ETFs of ETFs in the United States.
The new funds are:
- PowerShares Autonomic Growth NFA Global Asset Portfolio (PTO): The most growth-oriented of the three funds, with 90% equity and 10% fixed income.
- PowerShares Autonomic Balanced Growth NFA Global Asset Portfolio (PAO): Holds 75% equity and 25% fixed income.
- PowerShares Autonomic Balanced NFA Global Asset Portfolio (PCA): Holds 60% equity and 40% fixed income.
The ETFs hold ETFs primarily hold PowerShares ETFs, but will also contain some from other providers as well, reports Heather Bell for Index Universe. Although the actual expense ratio for each individual fund is low, at 0.25%, the expense ratio for each ETF within the fund are applied on top of that.
This type of investment could appeal to those investors who don’t want to watch their portfolios too closely, yet still want some level of control while having someone else manage their ETFs. With just one of these ETFs, they would be automatically diversified. Bell says these ETFs could also get a lot of attention if ETFs ever gain full acceptance in the 401(k) market.
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.