How PowerShares Could Boost Your Portfolio

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

We introduce you today to exchange-traded fund (ETF) provider Invesco PowerShares, a company offering a wide range of investment options. Invesco Ltd. is an independent investment management company founded in 1935 with more than $760 billion in assets under management. Among the services it offers to individual investors are ETFs, provided through its Invesco PowerShares subsidiary.

Launched in 2002, PowerShares became part of Invesco in 2006. PowerShares currently offers more than 170 ETFs in its portfolio and has assets of approximately $96 billion.

PowerShares was one of the first ETF providers to move away from the passive index-based composition of traditional ETFs, instead offering funds based on indexes with non-traditional weighting methodology and select securities using criteria other than market capitalization. One sub-family of ETFs that the provider offers involves fundamental weighting. As a result, these securities are weighted in their holdings, based on sales, cash flow, book value and dividends.

One such fund is PowerShares Fundamental Pure Large Value (PXLV). This fund draws from a universe of the 2,500 largest U.S. companies, based on the weighted fundamentals outlined above. The fund’s value has managed to hold fairly steady this year, only falling a slight 0.21% amid the January-February turmoil. Last year, the fund gained 31.06%. PXLV’s current yield is 1.90%.

PXLV_031214

Of course, Invesco PowerShares has a wide variety of other investment opportunities, including a large family of commodity ETFs and some interesting quantitative investment strategies, which use dynamic evaluation of criteria such as risk. In other words, for every investment objective you might have, PowerShares strives to offer an ETF to match it.

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If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please check out my Successful Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed them, I encourage you to read my articles from previous weeks about ETF providers WisdomTree, First Trust, ProShares,  Vanguard, iShares and State Street. I also invite you to share your thoughts below.

previous article

Given all of the geopolitical turmoil of late that’s rocked many of the biggest emerging markets in the world, it’s logical to ask ourselves if there will be a spillover effect -- some call it “contagion” -- here in the U.S. equity markets.

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