Invesco’s (NYSE: IVZ) PowerShares unit, the fourth-largest U.S. issuer of exchange traded funds, introduced the PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio (NasdaqGM: PDBC) Friday, a new actively managed ETF that helps investors avoid pesky K-1 tax forms.
The PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio is another addition to PowerShares’ expansive lineup of smart beta, or alternatively-weighted ETFs. Illinois-based PowerShares was one of the first ETF issuers to emphasize the advantages of alternatively-weighted ETFs and currently offers 60 smart beta ETFs with track records greater than five years. [Institutions Run to Smart Beta ETFs]
The new PDBC is the 82nd ETF in the PowerShares smart beta stable.
“PDBC provides broad and efficient exposure to commodities with the added benefit of eliminating Scheduled K-1 requirements,” said Lorraine Wang, Invesco PowerShares head of global ETF products & research, in a statement. “Institutional investors allocate commodities into portfolios as an inflation hedge, and for the benefit of low correlation to stocks and bonds.”
PDBC, which charges 0.59% per year, tracks 14 commodities via futures contracts with weights ranging from 1.53% for silver to 12.33% for gasoline. The new ETF also allocates a combined 24.4% of its weight to West Texas Intermediate crude and heating oil futures. Gold futures account for 7.91% of the fund’s weight.
“PDBC seeks to outperform its benchmark through actively managed investments in commodity-linked futures contracts. PDBC provides exposure to components of the DBIQ Optimum Yield Diversified Commodity Index Excess Return (Benchmark) which is composed of futures contracts on 14 heavily traded commodities across the energy, precious metals, industrial metals and agriculture sectors,” according to PowerShares.
PDBC is the twelfth commodity ETF in the PowerShares lineup and joins well-known funds such as the PowerShares DB Energy Fund (NYSEArca: DBE), PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC) and the PowerShares DB Agriculture Fund (NYSEArca: DBA).
PDBC Holdings
ETF Trends editorial contributed to this article.