PowerShares Fills the Void for KBW Indexed ETFs
Invesco PowerShares introduced four ETFs on November 1st, all based on financial sector indexes from Keefe, Bruyette & Woods (KBW). Although they are in fact new ETFs, it may be easier to think of them as replacements for the four SPDR ETFs that recently changed their benchmarks from KBW to S&P indexes.
The new offerings, combined with four other funds introduced last December, give PowerShares a total of eight ETFs tracking KBW financial sector indexes. ProShares also has two ETFs based on the KBW Regional Banking Index.
In an effort to jump start the new ETFs and lure shareholders from the former SPDR KBW funds, PowerShares is waiving its fees until 2/1/2012. Thereafter, the expense ratio will be 0.35%. The new ETFs share a common prospectus (pdf). Here are brief descriptions of each:
PowerShares KBW Bank Portfolio (KBWB) will track the KBW Bank Index, a float-adjusted, modified-market capitalization-weighted index that seeks to reflect the performance of U.S.-listed companies doing business as banks or thrifts.
The fund currently holds 24 stocks, including JPMorgan Chase (JPM) 7.7%, Citigroup (C) 7.7%, U.S. Bancorp (USB) 7.5%, Wells Fargo (WFC) 7.3%, and Bank of America (BAC) 6.6%. KBWB has a current yield of 2.3% and additional information is located in the KBWB overview.
PowerShares KBW Regional Banking Portfolio (KBWR) will track the KBW Regional Banking Index, a multi-tier, equal weighted, float-adjusted market capitalization index that seeks to reflect the performance of U.S.-listed regional banks or thrifts.
The fund has 50 stocks, the largest being Boston Private Financial Holdings (BPFH) 3.1%, CVB Financial (CVBF) 3.1%, Umpqua Holdings (UMPQ) 2.6%, First Financial Bancorp of Ohio (FFBC) 2.5%, and Signature Bank (SBNY) 2.5%. KBWR’s current yield is 2.5% and additional information is located in the KBWR overview.
PowerShares KBW Insurance Portfolio (KBWI) will track the KBW Insurance Index, a float-adjusted, modified-market capitalization-weighted index that seeks to reflect the performance of U.S.-listed insurance stocks.
The fund holds 24 companies representing approximately three-quarters of the market capitalization of the entire U.S. public insurance company universe. The largest holdings are Travelers (TRV) 9.9%, MetLife (MET) 8.0%, Chubb (CB) 7.9%, AFLAC (AFL) 6.8%, and Prudential Financial (PRU) 6.6%. KBWI has a current yield of 2.4% and additional information is located in the KBWI overview.
PowerShares KBW Capital Markets Portfolio (KBWC) will track the KBW Capital Markets Index, a float-adjusted modified-market capitalization-weighted index that seeks to reflect the performance of U.S.-listed broker-dealers, asset managers, trust and custody banks or exchanges.
The fund holds 24 companies, including State Street (STT) 8.7%, Franklin Resources (BEN) 7.5%, Morgan Stanley (MS) 7.4%, CME Group Class A (CME) 6.8%, and Goldman Sachs Group (GS) 5.6%. KBWC has a current yield of about 1.7% and additional information can be found in the KBWC overview.
Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.