PowerShares Introduces Active Stock ETFs

April 11, 2008

SAN DIEGO (ETFguide.com) - The first actively managed equity exchange-traded funds (ETFs) were launched today on the NYSE Arca by PowerShares Capital Management.

The four new PowerShares funds are:

--Active AlphaQ, benchmarked against the Nasdaq-100 index (PQY);

--Active Alpha Multi-Cap, benchmarked against the S&P 500 index (PQZ);

--Active Mega-Cap, benchmarked against the Russell Top 200 index (PMA);

--Active Low-Duration, benchmarked against the Lehman Brothers 1-3 year U.S. Treasury index (PLK)

Despite today's offering, most ETFs are still benchmarked to an index or a single security. Nevertheless, the infinite number of active investment strategies could mean a paradigm shift where active ETFs outnumber index-based funds.

According to PowerShares, the benefits of active ETFs include lower costs compared to actively managed mutual funds, trading flexibility, and the potential for greater tax savings. Investors would still have bear the transaction costs of buying or selling their shares.

All three stock funds will charge annual expense ratios of 0.75 percent and the lone bond fund will charge 0.29 percent.

"Today’s listings include the first actively managed equity ETFs, granting investors direct access to a diverse range of products, these listings begin yet another chapter in the dynamic and growing ETF industry,” said Senior Vice President, Exchange Traded Funds and Indexes, Lisa Dallmer. 

The Wheaton, IL-based company manages$12 billion in assets and is a unit of Invesco, Ltd.