PowerShares Adds International Low-Volatility ETFs

tlydon@globaltrend.com (Tom Lydon)
January 17, 2012

Invesco PowerShares launched a successful low-volatility exchange traded fund last year that focuses on U.S. stocks, and now the ETF provider is expanding the lineup with international offerings.

On Friday, PowerShares launched two new low-volatility ETFs, the PowerShares S&P Emerging Markets Low Volatility Portfolio (NYSEArca: EELV - News) and the PowerShares S&P International Developed Low Volatility Portfolio (NYSEArca: IDLV - News) .

PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV - News) has already attracted about $1 billion in assets with investors looking for conservative exposure to U.S. stocks.

“Given today’s market environment, investors are naturally seeking better ways to reduce volatility in their portfolios,” Ben Fulton, Invesco PowerShares managing director of global ETFs, said in a press release . “We believe the PowerShares family of low volatility ETFs may provide investors a degree of protection in down cycles while still participating in upward trending cycles, and have the potential to improve risk-adjusted returns over the long term.”

The PowerShares Emerging Markets Low Volatility Portfolio consists of the 200 least volatile stocks from the S&P Emerging BMI Plus LargeMid Cap Index over the past 12 months. The fund has an expense ratio of 0.25%.

EELV’s country allocations include Malaysia 24.1%, South Africa 18.1%, Taiwan 12.0%, unclassified 11.2%, Brazil 9.2%, Chile 6.0%, Morocco 4.7%, Mexico 4.6%, South Korea 2.5% and Thailand 2.4%. Sector allocations include consumer discretionary 6.8%, consumer staples 14.8%, energy 3.3%, financials 24.1%, health care 2.5%, industrials 8.7%, info tech 1.0%, materials 9%, N/A 4.0%, telecom services 10.6% and utilities 14.4%.

It should be noted that the fund holds both foreign securities and ETFs to achieve its target objective. For instance, the largest holding is an ETF – Global X FTSE Colombia 20 ETF (NYSEArca: GXG - News ), at 4.0% of the fund. The rest of the holdings are weighted at around 1% or lower.

The PowerShares International Developed Low Volatility Portfolio holds the 200 least volatile stocks of the S&P Developed ex. U.S. and South Korea LargeMid Cap BMI Index for the past 12 months. The fund has an expense ratio of 0.25%.

IDLV’s country allocations include Canada 20.4%, Japan 16.9%, U.K. 11.4%, Singapore 11.0%, New Zealand 9.0%, Australia 8.2%, Hong Kong 5.0%, Switzerland 3.2%, Netherlands 2.8% and France 2.4%. Sector allocations include consumer discretionary 11.3%, consumer staples 18.0%, energy 3.0%, financials 22.2%, health care 10.4%, industrials 13.9%, info tech 0.4%, materials 1.3%, telecom services 8.6% and utilities 11.1%. All of the fund’s holdings are mostly evenly distributed below 1%.

PowerShares S&P 500 Low Volatility Portfolio


For more information on market volatility, visit our volatility category .

Max Chen contributed to this article.