Toronto-based Invesco Canada Ltd. is offering investors two new ETFs using the RAFI methodology of Newport Beach, Calif.-based Research Affiliates, LLC at the lowest price point available in Canada.
The addition of the PowerShares FTSE RAFI Canadian Fundamental Index ETF (TSX: PXC) and PowerShares FTSE RAFI US Fundamental (CAD Hedged) Index ETF (TSX: PXU) further strengthens PowerShares Canada’s growing ETF lineup. The ETFs two are now trading on the Toronto Stock Exchange.
“We’re pleased to be able to offer ETFs using the RAFI methodology to the Canadian marketplace,” says Michael Cooke, head of distribution for PowerShares Canada. “PowerShares globally is the largest provider of product based on RAFI’s unique and proven investment methodology.”
The two new ETFs are based on the FTSE RAFI family of fundamental indices, which use a weighting structure based on four fundamental measures of company size: sales, cash flow, book value and dividends.
“Unlike traditional cap-weighted indices, the RAFI methodology breaks the link with market price and helps reduce investor exposure to market imbalances, like the ‘tech bubble’ of 2000,” Cooke says.
PowerShares FTSE RAFI Canadian Fundamental Index ETF, with an annualized management fee of only 45 basis points, seeks to replicate (before fees and expenses) the performance of the FTSE RAFI Canada Index and gives investors exposure to all Canadian equities in the FTSE RAFI Developed ex US 1000 Index, a fundamentally weighted index.
PowerShares FTSE RAFI US Fundamental (CAD Hedged) Index ETF, with a management fee of just 60 bps, less a 5-bp management fee waiver until at least Aug. 31, 2012, seeks to replicate (before fees and expenses) the performance of the FTSE RAFI US 1000 Index (Canadian Hedged), and the ETF provides investors exposure to the 1,000 U.S. equities with the largest fundamental value by investing in securities of the PowerShares FTSE RAFI US 1000 Portfolio.