Invesco S&P 500 Equal Weight Index ETF
(EQL)
TORONTO, May 29, 2018 /CNW/ - Invesco today announced
the launch of Canada's first
exchange-traded fund (ETF) to provide equal-weight exposure to the
companies that make up the S&P 500 Index: Invesco S&P 500
Equal Weight Index ETF (EQL). This launch comes after Invesco
Ltd.'s recent acquisition of Guggenheim's ETF business in the
U.S.
EQL seeks to replicate, to the extent reasonably possible and
before fees and expenses, the performance of the S&P 500 Equal
Weight Index or any successor thereto on an unhedged basis, in the
case of any unhedged units, or on a hedged basis, in the case
of any hedged units. EQL invests, directly or indirectly,
primarily in equity securities of companies listed in the United States.
"One of the challenges investors face in tracking a
market-capitalization-weighted index is that the index may have
concentration-risk issues," said Jasmit
Bhandal, Head of ETF Product Strategy and Development with
Invesco Canada.
"The S&P 500® is currently heavily concentrated
in a few securities, with the FAANG companies – Facebook, Apple,
Amazon, Netflix and Alphabet (Google) – making up almost 12% of the
index1. A significant portion of the returns are driven
by these few securities," added Bhandal.
To help investors avoid such overweighting, EQL tracks the
S&P 500 Equal Weight Index, which weights each company at 0.2%
at each quarterly rebalancing.
"This ETF gives investors an alternative way to get exposure to
the U.S. equity market," said Bhandal.
The initial offering of Invesco S&P 500 Equal Weight Index
ETF has now closed. Units in the ETF will be available for trading
on TSX when the market opens today.
Three series allow investors to choose the currency exposure
that best suits their unique investment goals: CAD-unhedged (EQL),
USD-unhedged (EQL.U) and CAD-hedged (EQL.F)
EQL offers investors the following potential benefits:
- Balanced exposure: The S&P 500®'s
performance is disproportionally dominated by the largest company
names. Equal weighting the companies in the index results in
reduced portfolio concentration risk and a more balanced portfolio
than investing in the S&P 500®
- Disciplined rebalancing: Equal-weight exposure is
maintained through quarterly rebalancing, which creates a
buy-low/sell-high effect over time. Quarterly rebalancing also
creates more stable exposure to sectors compared to the S&P
500®, which may reduce the impact of market bubbles
versus the S&P 500®
- Higher return potential: The S&P 500 Equal Weight
Index has historically outperformed the
market-capitalization-weighted S&P 500® over the
long term2
On April 9, 2018, Invesco Ltd.
announced that it had finalized the acquisition of Guggenheim
Investments' ETF business. The acquisition strengthens Invesco
Ltd.'s market-leading ETF capabilities3 as well as the
firm's efforts to help meet the needs of institutional and retail
clients across the globe. With the addition of these ETFs, Invesco
Ltd.'s ETF assets under management total more than US$215.3 billion globally, bringing overall
assets to US$984.2 billion (as at
February 28, 2018).
For more information on Invesco's line of factor-based smart
beta ETFs, visit invesco.ca.
About Invesco Ltd.
Invesco Ltd. is an independent
investment management firm dedicated to delivering an investment
experience that helps people get more out of life. NYSE:
IVZ; invesco.com.
Commissions, management fees and expenses may all be associated
with investments in exchange-traded funds (ETFs). ETFs are not
guaranteed, their values change frequently and past performance may
not be repeated. Please read the prospectus before investing.
Copies are available from Invesco Canada Ltd. at invesco.ca.
1 As at April 30,
2017.
2 Based on the performance of the S&P 500 Equal
Weight Index's over January 8, 2003
(inception) to April 30, 2018.
3 With US$176.5 billion in
assets under management globally, PowerShares ranked as the
fourth-largest ETF provider globally, as at February 28, 2018. Source: PowerShares. With
US$55 billion in smart beta assets
under management, PowerShares' smart beta lineup ranked second in
the U.S., as at January 31, 2018.
Source: PowerShares and Bloomberg L.P.
There are risks involved with investing in ETFs. Please read the
prospectus for a complete description of risks relevant to the ETF.
Ordinary brokerage commissions apply to purchases and sales of ETF
units.
Some ETFs seek to replicate, before fees and expenses, the
performance of the applicable index, and are not actively managed.
This means that the sub-advisor will not attempt to take defensive
positions in declining markets and the ETF will continue to provide
exposure to each of the securities in the index regardless of
whether the financial condition of one or more issuers of
securities in the index deteriorates. In contrast, if an ETF is
actively managed, then the sub-advisor has discretion to adjust
that ETF's holdings in accordance with the ETF's investment
objectives and strategies.
S&P®, Standard & Poor's® and
S&P 500 Equal Weight® are registered trademarks
of Standard & Poor's Financial Services LLC and have been
licensed for use by S&P Dow Jones Indices LLC. The S&P
Equal Weight Index is a product of S&P Dow Jones Indices LLC
and has been licensed for use by Invesco Canada Ltd. This
Invesco ETF is not sponsored, endorsed, sold or promoted by S&P
Dow Jones Indices LLC, and S&P Dow Jones Indices LLC makes no
representation regarding the advisability of investing in such a
product.
Invesco® and all associated trademarks are
trademarks of Invesco Holding Company Limited, used under
licence.
© Invesco Canada Ltd., 2018
SOURCE Invesco Canada Ltd.