After consulting with an advisor, investors looking for increased access to real estate shares may wish to consider the PowerShares Dynamic Building & Construction Portfolio (PKB), a smart beta exchange-traded fund (ETF) based on the Dynamic Building & Construction Intellidex Index. PKB comprises the common stocks of 30 US building and construction companies.
1 Source: Zillow Real Estate Research, “At 2015 Midpoint, Buying Remains a Better Bargain than Renting,” August 12, 2015
2 Source: Dodge Data & Analytics, June 30, 2015
3 Source: The American Institute of Architects Economics & Market Research Group, June 19, 2015
Important information
Beta is a measure of risk representing how a security is expected to respond to general market movements. Smart beta is an alternative and selection index based methodology that seeks to outperform a benchmark or reduce portfolio risk, or both in both active and passive vehicles. Smart beta funds may underperform cap-weighted benchmarks and increase portfolio risk.
The Architecture Billings Index (ABI) is a diffusion index conducted by the American Institute of Architects Economics & Market Research Group. The ABI serves as a leading economic indicator that leads nonresidential construction activity by approximately 11 months. A score above 50 indicates that firms in aggregate are reporting an increase in activity that month compared to the previous month, while a score below 50 indicates that firms are reporting a decrease in activity.
The Dodge Momentum Index is a monthly measure of the first reporting for a non-residential building project (excluding manufacturing) in the planning process. The index is a leading indicator for US construction activity, and has been shown to lead non-residential construction spending by 12 months.
Dynamic Building & Construction IntellidexSM Index comprises stocks of US building and construction companies. The Index is designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. The Fund’s return may not match the return of the Underlying Index. The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.
Investments focused in a particular industry, such as building and construction, are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.