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PowerShares Rolls Out Suite of RAFI ETFs

PIMCO launches a high-yield corporate-bond ETF. Plus, the week's best- and worst-performing ETFs.

Robert Goldsborough, ETF Analyst, 06/21/2011

On Thursday, June 16, PowerShares launched two exchange-traded funds that complete its family of nine fundamental pure-style ETFs that use the Research Affiliates Fundamental Index methodology.

PowerShares Fundamental Pure Large Growth Portfolio PXLG and PowerShares Fundamental Pure Large Value Portfolio PXLV, which, not surprisingly, are large-cap funds in the growth and value spaces, respectively, round out PowerShares' creation of a RAFI-geared suite of fundamental value, core, and growth ETFs, with one for each of the three market-cap ranges: large-, mid-, and small-cap.

The family of funds uses RAFI methodology to try to mitigate market-cap weighting strategies of several index funds. Research Affiliates argues that market-cap-weighted strategies tend to overweight overvalued stocks and underweight undervalued ones. Instead, RAFI methodology aims to weight positions by "economic size," screening for dividends, revenues, book value, and cash flows. Research Affiliates believes that those metrics offer far better representation of a firm's size than whatever its stock price happens to be.

Concurrent with the launches of PXLG and PXLV, PowerShares also on June 16 made official the changes of the names, strategies, tickers, fees, and indexes of seven of its fundamental ETFs so that the seven funds would fill the remaining seven boxes in its suite of RAFI ETFs. The seven thinly traded ETFs previously had been based on Intellidex indexes but now, like PXLG and PXLV, will track RAFI indexes. We had mentioned this index-switch change on May 2, shortly after it was first announced.

The seven former Intellidex ETFs with their former names and tickers, followed by their new names and tickers:

PowerShares Dynamic Large Cap Portfolio PJF -- PowerShares Fundamental Pure Large Core Portfolio PXLC
PowerShares Dynamic Mid Cap Growth Portfolio PWJ -- PowerShares Fundamental Pure Mid Growth Portfolio PXMG
PowerShares Dynamic Mid Cap Portfolio PJG -- PowerShares Fundamental Pure Mid Core Portfolio PXMC
PowerShares Dynamic Mid Cap Value Portfolio PWP -- PowerShares Fundamental Pure Mid Value Portfolio PXMV
PowerShares Dynamic Small Cap Growth Portfolio PWT -- PowerShares Fundamental Pure Small Growth Portfolio PXSG
PowerShares Dynamic Small Cap Portfolio PJM -- PowerShares Fundamental Pure Small Core Portfolio PXSC
PowerShares Dynamic Small Cap Value Portfolio PWY -- PowerShares Fundamental Pure Small Value Portfolio PXSV

The nine ETFs all charge net expense ratios of 0.39%.

PIMCO Rolls Out High-Yield Corporate-Bond ETF
On Friday, June 17, PIMCO launched the latest addition to its stable of ETFs: a short-duration high-yield corporate-bond fund.

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