Invesco PowerShares has rolled out actively managed multi-asset exchange traded funds with targeted levels of risk exposure to help investors achieve the risk tolerance they are comfortable with.
On Thursday, PowerShares launched four new active ETFs, including:
– PowerShares Conservative Multi-Asset Allocation Portfolio (BATS: PSMC), which seeks total return consistent with a lower level of risk relative to the broad stock market. PSMC has a 0.37% expense ratio.
– PowerShares Moderately Conservative Multi-Asset Allocation Portfolio (BATS: PSMM), which seeks to provide current income and some capital appreciation. PSMM has a 0.38% expense ratio.
– PowerShares Balanced Multi-Asset Allocation Portfolio (BATS: PSMB), which seeks to provide current income and capital appreciation. PSMB has a 0.39% expense ratio.
– PowerShares Growth Multi-Asset Allocation Portfolio (BATS: PSMG), which seeks to provide long-term capital appreciation. PSMG has a 0.39% expense ratio.
The multi-asset portfolios are based on a suite of models designed by the Invesco Global Solutions and Development and Implementation team to help provide investors with a convenient and diversified investment through a single easy-to-use investment vehicle.
“Given the increasingly complex markets and varying risk profiles of our clients, we’re excited to bring Invesco’s broad range of capabilities together in simplified, single ticket solutions,” Jason Bloom, Global Market Strategist at PowerShares by Invesco, said in a note.
The four new active ETFs act as fund-of-funds, providing exposure to smart beta ETFs and using factor select and alternative weighting approaches in an effort to outperform a benchmark while diminishing portfolio risk to generate improved risk-adjusted returns.
The active ETFs provide increasingly greater risk exposure and potentially greater returns. More risk tolerant investors or younger investors seeking to grow their wealth will likely turn to something like PSMG, whereas more risk adverse or those closer to retirement would look to PSMC to preserve capital.
Specifically, PSMC’s target allocation includes 50% to 80% in fixed income ETFs, 20% to 50% in equity ETFs and 5% to 10% in underlying ETFs that invest in foreign stocks and bonds as well as American depositary receipts (ADRs) and global depositary receipts (GDRs).
PSMM’s target portfolio includes 50% to 80% in fixed income ETFs, 20% to 50% in equity ETFs and 5% to 15% in underlying ETFs that invest in foreign stocks and bonds as well as American depositary receipts and global depositary receipts.
PSMB includes 50% to 70% in equity ETFs, 30% to 50% in fixed income ETFs and 10% to 25% in underlying ETFs that invest in foreign stocks and bonds as well as American depositary receipts and global depositary receipts.
Lastly, PSMG holds 60% to 80% in equity ETFs, 20% to 40% in fixed income ETFs and 20% to 30% in underlying ETFs that invest in foreign stocks and bonds as well as American depositary receipts and global depositary receipts.
For more information on new fund products, visit our new ETFs category.