CHICAGO, IL--(Marketwired - Oct 10, 2013) - Invesco PowerShares Capital Management LLC, a leading global provider of exchange-traded funds (ETFs), today announced the launch of the PowerShares China A-Share Portfolio (
"U.S. investors currently have very limited access to China's domestic A-Shares market, which embodies the amazing growth story of the world's second largest economy by GDP," said Lorraine Wang, Invesco PowerShares global head of ETF products and research. "The PowerShares China A-Share Portfolio (CHNA) is uniquely designed to provide a liquid, efficient and cost effective alternative to direct investments in China A-Shares."
CHNA is an actively managed ETF that seeks long-term capital appreciation by providing exposure to the China A-Shares market using a quantitative, rules-based investment strategy. CHNA will invest primarily in the SGX FTSE China A50 index futures, as well as other instruments such as ETFs providing exposure to the largest companies within the China A-Shares market, and A-Shares to the extent permissible under Chinese law. CHNA will have a management fee of 0.50%. 1
"We are very excited to work with Invesco PowerShares on this landmark investment vehicle allowing US investors to allocate and diversify their portfolios into Asia's dominant growth engine," said Michael Syn of the Singapore Exchange (SGX). "The SGX FTSE China A50 Index Futures is the only offshore futures on the China A-Shares market without Qualified Financial Institutional Investor (QFII) requirements, and is the most liquid offshore exchange-traded vehicle providing exposure to China A-Shares market." 2
To learn more about PowerShares China A-Share Portfolio (CHNA), visit http://www.invescopowershares.com/china-a/
1. Since ordinary brokerage commissions apply for each buy and sell transaction, frequent trading activity may increase the cost of ETFs.
2. Source: SGX Singapore Exchange, as of Aug. 31, 2013
About Singapore Exchange (SGX)
Singapore Exchange (SGX) is the Asian Gateway, connecting investors in search of Asian growth to corporate issuers in search of global capital. SGX represents the premier access point for managing Asian capital and investment exposure, and is Asia's most internationalized exchange with more than 40% of companies listed on SGX originating outside of Singapore. SGX offers its clients the world's biggest offshore market for Asian equity futures market, centered on Asia's three largest economies - China, India and Japan. The SGX Asian Gateway provides central-clearing on a CFTC-regulated platform.
About the FTSE China A50 Index
The Index is a real-time index providing exposure to the largest 50 A-Share companies on a market-cap-weighted basis. The index has a correlation to the broader Chinese domestic equity market of 0.97 as represented by the CSI 300 Index.
About Invesco PowerShares Capital Management LLC and Invesco, Ltd.
Invesco PowerShares Capital Management LLC is leading the Intelligent ETF Revolution® through its family of more than 140 domestic and international exchange-traded funds, which seek to outperform traditional benchmark indexes while providing advisors and investors access to an innovative array of focused investment opportunities. With franchise assets over $78 billion as of June 30, 2013, PowerShares ETFs trade on both US stock exchanges. For more information, please visit us at invescopowershares.com or follow us on Twitter @PowerShares.
Invesco Ltd. is a leading independent global investment management firm, dedicated to helping investors worldwide achieve their financial objectives. By delivering the combined power of our distinctive investment management capabilities, Invesco provides a wide range of investment strategies and vehicles to our clients around the world. Operating in more than 20 countries, the firm is listed on the New York Stock Exchange under the symbol IVZ. Additional information is available at www.invesco.com.
Not FDIC Insured | May Lose Value | No Bank Guarantee
Important Risk Information
There are risks involved with investing in ETFs, including possible loss of money. Index-based ETFs are not actively managed. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Both index-based and actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Index.
The Fund does not intend use leverage.
The Fund's use of derivatives may increase the amount of risk associated with the Fund and may magnify changes in the Fund's value positively and negatively. The use of this Fund may not be suitable for all investors.
The Fund is subject to management risk because it is an actively managed portfolio. There can be no guarantee that the investment techniques and risk analyses used in making investment decisions for the Fund will produce the desired results.
The Fund may have significant investment in futures contracts. Because futures contracts project price levels in the future, market circumstances may cause a discrepancy between the price of a stock index future and the movement in the FTSE China A50 Index. In the event of adverse price movements, the Fund would be required to make daily cash payments to maintain its required margin. The Fund also must segregate liquid assets or enter into off-setting positions to "cover" open positions in futures contracts. By investing in futures contracts, the Fund also is subject to capacity constraints and liquidity risks.
Investing in futures contracts based on the performance of Chinese companies involves several risks: The economy of China differs, sometimes unfavorably, from the U.S. economy in such respects as structure, general development, government involvement, wealth distribution, rate of inflation, growth rate, allocation of resources and capital reinvestment, among others; the central government has historically exercised substantial control over virtually every sector of the Chinese economy through administrative regulation and/or state ownership; and actions of the Chinese central and local government authorities continue to have a substantial effect on economic conditions in China. The regulatory oversight of Chinese companies differs from that in the United States and may not otherwise deter or uncover fraudulent actions by the issuers.
The A-Shares market in China is an emerging market with a limited operating history, and it is not as developed as capital markets in the United States. The various restrictions on the free flow of capital into the Chinese A-Shares market may adversely impact the liquidity of the market and increase the volatility of the trading prices of A-Shares, which in turn could impact the performance of the FTSE China A50 Index and of the Fund. The investment regulations in China under which the Fund would invest are relatively new and the application and interpretation of those investment regulations are relatively untested; therefore, if and when the Fund is permitted to invest directly in A-Shares, there is no certainty as to how they will be applied.
The Chinese government in the past has taken actions that benefited holders of A-Shares. If A-Shares continue to become more available to foreign investors, the Chinese government may be less likely to take action that would benefit holders of A-Shares. Moreover, the laws, regulations, government policies and political and economic climate in China may change with little or no advance notice, and there can be no assurance that the Chinese government will continue to take similar actions in the future. Any such change could adversely affect the market conditions for A-Shares.
If the Fund were to invest directly in A-Shares, such investments would be subject to pre-approved government limitations on the quantity of A-Shares in which the Fund may invest. If the Adviser obtains a QFII license, it would be required to remit the entire investment principal for its A-Share quota into a local sub-custodian account after the Adviser obtains a foreign exchange registration certificate from the Chinese government agency responsible for foreign exchange administration. Once remitted, investment capital only may be repatriated at certain designated times. Repatriation of investment capital and profits currently is subject to a lock-up period and other restrictions. This means that the Fund may be limited in its ability to transfer its investment principal for the Fund's A-Share quota outside of China. Future changes to the repatriation rules could further limit the Fund's ability to repatriate capital and could have a negative effect on the Fund's operations.
Investments in the foreign securities involve additional risks, such as less reliable financial information, higher transactional costs, taxation by foreign governments, decreased market liquidity and greater market volatility and political instability.
The dollar value of the Fund's foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded.
If the Fund invests in another ETF to obtain exposure to the China A-Shares market, it will be subject to the risks associated with the underlying ETF, which include, but are not limited to, the risk that the underlying ETF's investment strategy may not produce the intended results. The Fund also may pay indirectly a proportional share of the fees and expenses of the underlying ETFs in which it invests.
The Fund's investments in U.S. Government securities will change in value in response to interest rate changes and other factors, such as the perception of an issuer's creditworthiness. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. In addition, the Fund's investments in fixed-income securities with longer maturities will fluctuate more in response to interest rate changes.
The Fund currently intends to effect creations and redemptions principally for cash, rather than principally in-kind, because of the nature of the Fund's investments. As such, investments in the Fund may be less tax efficient than investments in ETFs that create and redeem in-kind.
The Fund may invest in stock index futures contracts that provide exposure to the China A-Shares market, including futures contracts listed on the Singapore Exchange on the FTSE China A50 Index. To qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (RIC), the Fund must meet a qualifying income test each taxable year. Failure to comply with the qualifying income test in any taxable year would have significant negative tax consequences to Fund shareholders. If the Internal Revenue Service were to determine that income the Fund derives from these futures contracts did not constitute qualifying income, and if that position were upheld, the Fund would likely be required to reduce its exposure to such investments in order to maintain its qualification as a RIC, which may result in difficulty in implementing its investment strategies.
The Fund is considered non-diversified and may be subject to greater risks than a diversified fund, including increased volatility and that the performance of a relatively small number of issuers may have a greater impact on the Fund's performance.
The Fund's investments in stock index futures contracts will cause it to be deemed to be a commodity pool, thereby subjecting the Fund to regulation under the Commodity Exchange Act and Commodity Futures Trading Commission (CFTC) rules. The Adviser is registered as a Commodity Pool Operator (CPO), and the Fund will be operated in accordance with CFTC rules. Registration as a CPO subjects the registrant to additional laws, regulations and enforcement policies, all of which could increase compliance costs and may affect the operations and financial performance of funds whose adviser is required to register as a CPO. Registration as a commodity pool may have negative effects on the ability of the Fund to engage in its planned investment program.
Shares are not individually redeemable and owners of the shares may acquire those shares from the Fund and tender those shares for redemption to the Fund in Creation Unit aggregations only, typically consisting of 50,000 shares.
PowerShares® is a registered trademark of Invesco PowerShares Capital Management LLC (Invesco PowerShares). Invesco PowerShares and Invesco Distributors, Inc. are indirect, wholly owned subsidiaries of Invesco Ltd.
All rights in the FTSE China A50 Index (the Index) invest in FTSE International Limited (FTSE). FTSE® is a trade mark of the London Stock Exchange Group companies and is used by FTSE under license. The PowerShares China A-Share Portfolio (the Fund) has been developed solely by Invesco PowerShares. The Index is calculated by FTSE or its agent. FTSE and its licensors are not connected to and do not sponsor, advise, recommend, endorse or promote the Fund and do not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. FTSE makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by Invesco PowerShares.
Invesco Distributors, Inc. is the distributor of the PowerShares Actively Managed Exchange-Traded Fund Trust.
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An investor should consider the Fund's investment objective, risks, charges and expenses carefully before investing. The prospectus contains this and other information about the Fund. For this and more complete information about the Fund call 800 983 0903 or visit invescopowershares.com for a prospectus. Please read the prospectus carefully before investing.