Invesco PowerShares Capital Management, LLC, begun trading the PowerShares DWA Tactical Multi-Asset Income Portfolio (Nasdaq: DWIN) on Thursday, March 10, 2016. Here is a synopsis of the new ETF:
|Name: PowerShares DWA Tactical Multi-Asset Income Portfolio
|Net Expense Ratio: 0.69%
The PowerShares DWA Tactical Multi-Asset Income Portfolio seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dorsey Wright Multi-Asset Income Index.
The Fund generally will invest at least 90% of its total assets in securities that comprise the Underlying Index. The Fund is a “fund of funds,” meaning that it invests substantially all of its assets in the shares of other ETFs eligible for inclusion.
The Dorsey Wright Multi-Asset Income Index is composed of 1-5 Underlying ETFs selected from a universe of income-producing ETFs (Eligible ETFs), each of which generally is designed to seek to provide high levels of current income, strictly in accordance with the guidelines and mandated procedures of Dorsey, Wright & Associates, LLC (Index Provider) which compiles, maintains and calculates the Underlying Index.
This universe, which the Index Provider may change from time to time, consists mostly of PowerShares ETFs that employ income-oriented strategies. The Eligible ETFs invest their assets in different segments of the securities markets, such as: U.S. Treasuries, domestic and international bonds, dividend paying equities, preferred stock, real estate investment trusts (REITs) and master-limited partnerships (MLPs).
The various Eligible ETFs may hold fixed income securities of any duration, maturity or quality, and certain Eligible ETFs may invest primarily in high-yield (junk) bonds.
The Underlying Index seeks to gain exposure to the income producing segments of the U.S. securities market that display the strongest relative strength, as evaluated on a monthly basis. “Relative strength” is the measurement of a security’s performance in a given universe over time as compared to the performance of all other securities in that universe. Therefore, at any given time, the components of the Underlying Index are those Eligible ETFs that the Index Provider believes offer the greatest potential to outperform other Eligible ETFs.
Using its proprietary methodology, the Index Provider ranks each Eligible ETF by its relative strength and then eliminates those Eligible ETFs that rank in the bottom half of the eligible universe. Next, the Index Provider ranks the remaining Eligible ETFs by current yield, and selects the top 5 highest yielding Eligible ETFs for inclusion in the Underlying Index. At times, however, the Underlying Index may include fewer than 5 components, such as during certain economic conditions when the Index Provider’s relative strength methodology favors overweighting U.S. Treasury Security ETFs.
The Underlying Index is a modified equal weight index. The Index Provider evaluates the components of the Underlying Index each month to determine whether, based on potential changes in the relative strength or weightings of the Eligible ETFs, any change to the composition or rebalancing of component weights of the Underlying Index is necessary. Each Underlying ETF is equally weighted, with each usually representing 20% of the weight of the Underlying Index at the time of rebalance. The Fund generally invests in each Underlying ETF in proportion to its weighting in the Underlying Index.
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DWIN Home Page
Category: Multi Asset> Multi Asset Income
Here is a comment from Dan Draper, Head of Invesco PowerShares:
“Despite increased volatility in financial markets, we recognize that investors still expect better than average returns, which has become increasingly difficult for income investors looking for yield. This new multi-asset income solution helps investors navigate volatility using a sub- sector ETF rotation strategy covering a universe of 7 income producing segments including treasuries.”