Back in early July we featured two unique exchange traded fund products that were just starting to gather some momentum, PowerShares S&P 500 High Beta Portfolio (NYSEArca: SPHB) and PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV). [ETF Chart of the Day]
We have seen an acceleration in trading activity in both products which is not terribly surprising given the nature of both products as based on subsets of the S&P 500, and the fact that there are billions of dollars currently invested in S&P 500 Index tracking funds such as SPDR S&P 500 (NYSEArca: SPY) and iShares S&P 500 (NYSEArca: IVV).
It is very possible that fund managers are engaging in tax related swap activity and getting into either SPLV or SPHB while maintaining core exposure to the S&P 500.
Since inception, SPLV has demonstrated impressive performance versus the benchmark, down 0.32% versus the S&P 500 down 7.79%, while SPHB as we would expect (since it invests in the higher beta names of the S&P 500), has lost 26.87% during this time period.
SPLV has grown to over $600 million in assets under management, while SPHB has considerably less, $12 million in AUM currently.