PowerShares

What Are PowerShares?

PowerShares is the branded name of a family of domestic and international exchange traded funds (ETFs) managed by the investment management company Invesco Ltd. One of the primary famous index ETFs, the PowerShares QQQs, which tracks the Nasdaq 100 index, sent off in 1999.

Established in 2003, PowerShares ETFs trade like stocks on both U.S. what's more, international stock exchanges, including the NASDAQ and NYSE Arca, and are planned to offer investors tax effectiveness, transparency, flexibility, and broad exposure. As of June 4, 2018, all PowerShares ETFs were rebranded as Invesco ETFs.

Grasping PowerShares

While ETFs were initially intended to follow a market index, PowerShares was part of a universe of ETFs intended to outperform market indexes. Hence, the company alludes to its ETFs as "future," "wise," or "value-added" ETFs. The company's broad categories of ETFs offer investors decisions, for example, actively managed ETFs, ETFs zeroed in on dividend-paying stocks, commodities, and fixed-income products.

Invesco is the biggest provider of smart beta ETFs that actively target scholastically recognized investment factors. A factor is a quantifiable characteristic that makes sense of a very remarkable stock's risk-return profile. Six factors — low volatility, momentum, quality, value, small size, and dividend yield — are scholastically upheld and have generally shown outperformance across asset classes and geologies. Smart beta ETFs invest in stocks that show leans toward specific factors.

PowerShares developed its market share in the ETF category by offering investors both traditional passive and cutting edge active ETF products. PowerShares was the biggest part of Invesco's ETF business and assisted it with becoming one of the five biggest ETF providers, with assets of roughly $175 billion across a bigger number of than 200 ETFs through March 2018.

Notwithstanding its smart beta set-up of ETFs, PowerShares offered market-cap-weighted ETFs intended to follow index and stock sector performances, investment style-box ETFs, investment subject based ETFs, risk-based ETFs as well as ETFs that followed such alternative asset classes as currencies and real estate.

Invesco expanded its ETF offerings in February 2018 with the purchase of Guggenheim Investments' ETF business. The Guggenheim acquisition added BulletShares fixed income and equal-weighted equity ETFs to Invesco's ETF setup.

Risks of PowerShares

While products offered by Invesco have been acquiring greater acceptance among investors, they additionally carry specific smart beta risks. Most smart-beta ETFs have too short a history to draw decisions about their viability in real market conditions compared to speculative backtests.

Compared to traditional capitalization-weighted passive ETFs, the higher management fees assessed by smart beta ETFs could lead to a drag on performance. A few onlookers have noticed that the multiplication of smart beta ETFs offering comparative strategies could make a vehicles that lack the assets or liquidity to appropriately function as advertised.

Features

• PowerShares is one of the world's biggest and notable ETF providers.
• PowerShares is presently known as Invesco ETFs, following Invesco's merger with Guggenheim ETFs.
• Established in the year 2003, PowerShares works in smart beta and actively managed ETF products, but at the same time was a trailblazer in passive indexed ETFs in the late 1990s and mid 2000s.