PowerShares Revamps Its High Yield Bond ETF to Track Fundamental Index
Tuesday, August 3rd, 2010Kevin Grewal submits:
In an attempt to better serve the needs of investors and offer a different way to gain exposure to fixed income, Invesco PowerShares recently announced that it has renamed the PowerShares High Yield Corporate Bond Portfolio (PHB) to the PowerShares Fundamental High Yield Corporate Bond Portfolio.
PHB will now seek to replicate and track the RAFI High Yield Bond Index, making it the first bond ETF to utilize a holdings methodology which is based on fundamentals, including book value, revenues, dividends and cash flow, to set constituent weights. This approach differs from the traditional methodology of allocating the largest weights to the biggest debtors, which could potentially expose investors to enhanced risks of default.
