Fund Times: PowerShares Nearly Doubles ETF Family
Plus, Gabelli's settlement, Vanguard's new philosopher board member, and more.
Proving its appetite for new exchange-traded funds is limited only by its imagination, PowerShares Capital Management announced in an SEC filing this week its intention to launch 31 new ETFs.
If they're all approved, the new offerings would almost double the size of the PowerShares exchange-traded fund family, which currently has 37 ETFs. Ten of the new ETFs will be based on the "fundamental indexing" methodology of Rob Arnott, chairman of Research Affiliates, according to the filings. One of these RAFI funds (short for Research Affiliate Fundamental Index) will weight mid- and small-cap stocks based on revenues, book value, cash flow, and dividends instead of by market capitalization. The other ETFs will apply the same weighting scheme to stocks in nine sectors: energy, basic materials, industrials, consumer goods, health care, consumer services, telecommunications and technology, utilities, and financials. The PowerShares FTSE RAFI 1000 (PRF) already tracks Arnott's flagship fundamental index, which he has argued is a better gauge of the stock market than market-cap-weighted indexes in general and the S&P 500 specifically.
Lawrence Jones does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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