Invesco’s (NYSE: IVZ) PowerShares unit, the fourth-largest U.S. issuer of exchange traded funds, said Wednesday it is temporarily halting creations of new shares of in 11 ETFs, including the PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP), the U.S. Dollar Index tracking ETF.
“During the suspension, Invesco believes that Authorized Participants and other groups that make a market in shares of the funds will continue to actively trade the shares. However, there may be increases in the spread they quote between offers to buy and sell shares to allow them to adjust to the potential uncertainty as to when they might be able to purchase additional Creation Baskets,” said Illinois-based PowerShares in a statement.
Limited or halted creations in ETFs can cause the funds to trade at significant variations to net asset value. Investors can also encounter increased trading costs due to wider bid/ask spreads and limited share availability in exchange traded products that are subject to limited creations.
In addition to UUP, the other PowerShares ETFs subject to halted creations are as follows: The PowerShares DB US Dollar Index Bearish Fund (NYSEArca: UDN), PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC), PowerShares DB G10 Currency Harvest Fund (NYSEArca: DBV), PowerShares DB Energy Fund (NYSEArca: DBE), PowerShares DB Oil Fund (NYSEArca: DBO), Powershares DB Precious Metals Fund ETF (NYSEArca: DBP), Powershares DB Gold Fund ETF (NYSEArca: DGL), PowerShares DB Silver Fund (NYSEArca: DBS), PowerShares DB Base Metals Fund (NYSEArca: DBB) and the PowerShares DB Agriculture Fund (NYSEArca: DBA).
“Invesco is seeking to cause the suspension to be lifted as promptly as practicable,” according to the statement.