Invesco PowerShares Capital Management LLC, a leading provider of
exchange-traded funds (ETFs) with more than $57 billion in
franchise assets, announced today the PowerShares Senior Loan
Portfolio is anticipated to begin trading March 3, 2011, on the
NYSE Arca under the ticker symbol BKLN. The PowerShares Senior Loan
Portfolio is the first ETF that provides investors access to a
portfolio of senior secured bank or floating rate loans. The fund
is expected to issue monthly dividends.
"Senior loans can provide an attractive income stream for
yield-minded advisors and investors interested in shortening
portfolio duration," said Ben Fulton, Invesco PowerShares managing
director of global ETFs. "As a result of shorter maturities and a
floating interest rate feature that typically resets quarterly,
senior secured loans have the ability to keep pace with rate
changes and have historically proven to be more stable than
traditional high yield fixed-income investments. We believe the
PowerShares Senior Loan Portfolio (BKLN) provides a compelling new
means to access this asset class through the benefit-rich ETF
structure."
Senior loans -- also called leveraged loans, syndicated loans,
bank loans or floating rate loans -- are privately arranged
corporate debt instruments that provide capital to a company and
are syndicated to a group of banks and institutional lenders. The
loans are typically secured by specific assets of the borrower such
as property, plant, or equipment and are senior to all other
outstanding debt obligations. Proceeds are often used to finance
leveraged buyouts, mergers, acquisitions, stock repurchases and
other transactions.
The PowerShares Senior Loan Portfolio
(BKLN) is based on the S&P/LSTA U.S. Leveraged Loan 100
Index. The Underlying Index is designed to track the
market-weighted performance of the largest institutional leveraged
loans based on market weightings, spreads and interest payments.
The Fund will normally invest at least 80% of its total assets in
the securities that comprise the Underlying Index.
The index consists of 100 loan facilities drawn from a larger
benchmark -- the S&P/LSTA Leveraged Loan Index which covers
more than 1,100 facilities. Loans eligible for inclusion in the
index must be U.S. dollar denominated, senior secured first lien,
with a minimum initial term of one year, and a minimum initial
spread of 125 basis points over LIBOR at the time of issuance. The
underlying index which is compiled, maintained and calculated by
Standard & Poor's is rebalanced semi-annually and reviewed for
deletions on a weekly basis.
Invesco PowerShares Capital Management LLC is leading the
Intelligent ETF Revolution® through its family of more than 148
domestic and international exchange-traded funds, which seek to
outperform traditional benchmark indexes while providing advisors
and investors access to an innovative array of focused investment
opportunities. With franchise assets over $57 billion as of Jan.
31, 2011, PowerShares ETFs trade on both U.S. stock exchanges. For
more information, please visit us at
www.invescopowershares.com.
Invesco PowerShares is part of Invesco Ltd., a leading
independent global investment manager, dedicated to helping
investors worldwide achieve their financial objectives. By
delivering the combined power of our distinctive investment
management capabilities, Invesco provides a wide range of
investment strategies and vehicles to our retail, institutional and
high net worth clients around the world. Operating in more than 20
countries, the company is listed on the New York Stock Exchange
under the symbol IVZ. Additional information is available at
www.invesco.com.
Not FDIC Insured | May Lose Value | No Bank Guarantee
Duration is a measure of a bond's sensitivity to interest rate
changes that reflects the change in a bond's price given a change
in yield.
There are risks involved with investing in ETFs, including
possible loss of money. Shares are not actively managed and are
subject to risks including those regarding short selling and margin
maintenance requirements. Ordinary brokerage commissions apply.
Shares are not individually redeemable and owners of the shares
may acquire those shares from the Fund and tender those shares for
redemption to the Fund in Creation Unit aggregations only,
typically consisting of 100,000 shares.
Investments in loans are subject to interest rate risk and
credit risk. Interest rate risk refers to fluctuations in the value
of a loan resulting from changes in the general level of interest
rates. Credit risk refers to the possibility that the borrower of a
loan will be unable and/or unwilling to make timely interest
payments and/or repay the principal on its obligation. There is no
organized exchange on which loans are traded and reliable market
quotations may not be readily available.
As the purchaser of a loan assignment, the Fund typically
succeeds to all assigning institution rights and obligations and
becomes a lender under the credit agreement with respect to the
debt obligation. However, the Fund may not be able to enforce all
rights and remedies under the loan including any associated
collateral. If the loan is foreclosed, the Fund may become part
owner of any collateral and may bear the costs and liabilities of
owning and disposing the collateral. The Fund may be required to
pass on to a purchaser that buys a loan from the Fund a portion of
fees it is entitled to under the loan. In connection with
purchasing loan participations, the Fund will have no right to
enforce borrower compliance with the terms of the loan agreement,
nor any rights of set-off against the borrower, and the Fund may
not benefit from any collateral supporting the loan. Consequently,
the Fund will be subject to the credit risk of both the borrower
and the lender that is selling the participation. In the event of
the insolvency of the lender selling a participation, the Fund may
be treated as the lender's general creditor and may not benefit
from any set-off between the lender and the borrower.
The Fund may invest in non-investment grade, or high-yield,
securities (junk bonds). High-yield securities have additional
risks, including interest-rate changes, decreased market liquidity
and a larger amount of outstanding debt than investment-grade
securities.
Proceeds from a current investment of the Fund, both interest
payments and principal payments, may be reinvested in instruments
that offer lower yields than the current investment due in part to
market conditions and the interest rate environment at the time of
reinvestment.
The market value of the shares of closed-end investment
companies may differ from their NAV. In addition, the shares of
closed-end investment companies frequently trade at a discount to
their NAV. As an investor in closed-end investment companies, the
Fund would bear its ratable share of those closed-end investment
companies' fees and expenses, including its investment advisory and
administration fees, while continuing to pay its own advisory and
administration fees and other expenses. As a result, shareholders
will be absorbing duplicate levels of fees with respect to
investments in closed-end investment companies.
The Fund may invest all or a portion of its assets in loans of
non-U.S. borrowers. Loans of non-U.S. borrowers have additional
risks, including decreased market liquidity, political instability
and taxation by foreign governments.
The Fund's use of a representative sampling approach will result
in its holding a smaller number of loans than are in the Underlying
Index, and may subject the Fund to greater volatility.
The Fund currently intends to effect creations and redemptions
principally for cash, rather than principally in-kind because of
the nature of the Fund's investments. As such, investments in the
Fund may be less tax efficient than investments in ETFs that create
and redeem in-kind.
The Fund is non-diversified and can invest a greater portion of
its assets in securities of individual issuers than a diversified
fund.
Investments focused in a particular industry are subject to
greater risk, and are more greatly impacted by market volatility
than more diversified investments.
The Barclays Capital U.S. Aggregate, Barclays Capital U.S.
Government: Intermediate and Barclays Capital U.S. Municipal Bond
Indexes are unmanaged indexes considered representative of the U.S.
investment-grade, fixed-rate bond market, intermediate maturity
U.S. government securities market and the U.S. municipal bond
market, respectively.
The BofA Merrill Lynch U.S. Corporate Master Index is an
unmanaged index of corporate bonds considered representative of the
investment-grade corporate bond market.
The Barclays Capital U.S. Treasury: U.S. TIPS is an unmanaged
index considered representative of the U.S. Treasury inflation
protected securities market.
The Credit Suisse Leveraged Loan Index is designed to mirror the
investable universe of the $U.S.-denominated leveraged loan
market.
The S&P 500® Index is an unmanaged index considered
representative of the U.S. stock market.
Invesco Distributors, Inc. is the distributor of the PowerShares
Exchange-Traded Fund Trust II.
PowerShares® is a registered trademark of Invesco PowerShares
Capital Management LLC. Invesco PowerShares Capital Management LLC
(Invesco PowerShares) and Invesco Distributors, Inc. are indirect,
wholly owned subsidiaries of Invesco Ltd.
Standard & Poor's® and S&P® are registered trademarks of
Standard & Poor's Financial Services LLC (S&P) and have
been licensed for use by Invesco PowerShares Capital Management
LLC. The Fund is not sponsored, endorsed, sold or promoted by
S&P or its affiliates, and S&P and its affiliates make no
representation, warranty or condition regarding the advisability of
buying, selling or holding units/shares in the Fund.
Note: Not all products available through all firms.
An investor should consider the Fund's
investment objective, risks, charges and expenses carefully before
investing. For this and more complete information about the Fund
call 800 983 0903 or visit invescopowershares.com for a prospectus.
Please read the prospectus carefully before investing.
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Media Contacts: Kristin Sadlon Porter Novelli
212-601-8192 Email Contact Bill Conboy 303-415-2290 Email
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