Following a breakneck pace of share repurchases by U.S. companies ($445.3 billion was spent on buybacks in just the first three quarters of 2013), the pace is slowing a bit in 2014.
While 140 companies authorized buybacks last month, up from 130 in February 2013, the authorization was “just” $80 billion, or 32% below the year-earlier period, reports Steven Russolillo for the Wall Street Journal.
The slowing pace of buybacks, if it can really be called that, is not a cause for alarm. Market research firm Birinyi forecasts buyback authorizations are running at a full-year annualized rate of $745 billion, on pace with last year’s total, the Journal reported.
The impact of February’s slack pace of buyback authorizations, if any, has had a negligible impact on the PowerShares Buyback Achievers Portfolio (NYSEArca: PKW). Buybacks slowed in February, but PKW said “So what?” as the ETF gained 8.6%. The $2.97 billion is up 2% year-to-date, roughly the same as the S&P 500, but if U.S. stocks trade higher this year, it would not be surprising to PKW outperform the S&P 500 as it has done in so many previous years. [Buyback ETF Better Than Many Large Repurchasers]
And while share repurchases ebbed a bit last month, that does not mean investors are skirting PKW. Actually, the opposite is true. The ETF has hauled in $403.4 million in fresh assets this year, making it the second-best PowerShares ETF in terms of year-to-date inflows, according to issuer data. Year-to-date and over the past year, 30 and 90 days, PKW is no worse than the third-best asset gatherer among PowerShares ETFs.