Looking to follow the trail blazed by the PowerShares Buyback Achievers Portfolio (PKW) , one of the most successful broader market exchange traded funds over the past several years, the PowerShares International BuyBack Achievers Portfolio (IPKW) debuts today.
“BuyBack Achievers are companies that have effected a net reduction of 5% or more of their outstanding shares in the past 12 months, and have met additional criteria in accordance with the guidelines and mandated procedures of the NASDAQ OMX Group, Inc., the underlying index provider,” said PowerShares a statement.
IPKW will have an annual expense ratio of 0.55%, which is actually below the 0.71% charged by PKW. Like PKW, IPKW will be rebalanced quarterly in January, April, July and October.
IPKW tracks the NASDAQ International BuyBack Achievers Index (DRBXUS), which debuted in December 2013. On a back-tested basis, the NASDAQ International BuyBack Achievers Index has handily outperformed the NASDAQ Global Ex United States TR Index over the one-, two- and three-year periods ending Jan. 31, 2014, according to NASDAQ OMX Global Indexes data.
The NASDAQ International BuyBack Achievers Index is currently home to 41 companies including Agrium (AGU), AMEC, Betfair Group, Celestica, Domtar and Nippon Meat Packers. [Global Buyback ETF Could be a Winner]
IPKW has rich legacy to live up to in terms of following PKW’s success. In the six-year period ending 2013, PKW outperformed the S&P 500 five times, usually by significant margins. Not only has PKW frequently outpaced the S&P 500, but the ETF also has a penchant for topping some of its largest holdings as well as some of the biggest share U.S. share repurchasers that have yet to enter the fund. [Buyback ETF Beats Some Share Repurchasers]
“The buyback methodology is generally more tax-efficient relative to dividend payments and may provide investors enhanced total shareholder return,” said Lorraine Wang, Invesco PowerShares global head of ETF products and research, in a statement. “The merits of the BuyBack Achievers methodology, and more broadly smart beta, are demonstrated in our US-focused flagship product PowerShares BuyBack Achievers, so we are excited to provide investors a way to participate in global opportunities as well.
PKW has $2.8 billion in assets under management, $2.2 billion of which has come into the fund over the past year, according to PowerShares data.
PowerShares Buyback Achievers Portfolio
ETF Trends editorial team contributed to this post.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
- Investment & Company Information