Invesco’s (NYSE: IVZ) PowerShares, the fourth-largest U.S. ETF sponsor, is planning to introduce a multi-strategy alternative exchange traded fund later this month.
The PowerShares Multi-Strategy Alternative Portfolio is expected to begin trading on May 29 on the NASDAQ under the ticker “LALT.” LALT, which will be actively managed, is designed to damp portfolio volatility while boosting risk-adjusted returns. The new ETF will employ a long-short strategy.
Illinois-based PowerShares is partnering with Morgan Stanley (NYSE: MS) on the new ETF.
“Morgan Stanley has an established platform of proprietary liquid alternative indices across asset classes,” said Nikki Tippins, Managing Director, Head of Americas Equity Derivatives Distribution, in a statement. “The Morgan Stanley Multi-Strategy Alternative Index is designed to combine such strategies that seek to offer attractive risk-adjusted returns with low correlation to traditional asset classes. We’re delighted to provide this benchmark for such an original ETF.”
The Morgan Stanley Multi-Strategy Alternative Index employs quantitative, rules-based strategies and has previously been offered to institutional investors.
“Anticipating an unwinding of historic central bank intervention, the stock and bond markets have greater potential to experience heightened volatility against a backdrop of subpar growth. In such an environment, a multi-strategy alternative solution may be able to help investors navigate through more challenging market environments by reducing the volatility of returns and mitigate drawdowns,” said PowerShares in the statement.
Other new ETFs introduced by PowerShares this year include the PowerShares NYSE Century Portfolio (NYSEArca: NYCC), PowerShares International BuyBack Achievers Portfolio (NasdaqGM: IPKW) and the most recent addition, the PowerShares Variable Rate Preferred Portfolio Fund (NYSEArca: VRP). [New Variable Rate ETF Debuts]
ETF Trends editorial team contributed to this post.