SOURCE: Invesco PowerShares Capital Management LLC

Invesco PowerShares Capital Management LLC

November 07, 2014 09:30 ET

Invesco PowerShares Expands Industry Leading Smart Beta Suite With a Broad-Based Commodity Strategy ETF

Broad and Efficient Commodity Exposure in a Liquid, Transparent and Cost Efficient Vehicle Without a K-1*

CHICAGO, IL--(Marketwired - Nov 7, 2014) - Invesco PowerShares Capital Management, LLC, a leading global provider of exchange-traded funds (ETFs), announced today the expansion of its smart beta lineup with the listing of PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio (PDBC) on The Nasdaq Stock Market. Most ETFs investing in commodity futures available today are structured as limited partnerships and require that shareholders receive a Schedule K-1 form1, PDBC is designed to meet investors' demand for broad and efficient ETF exposure to commodities, and instead issue a Form 1099-DIV (1099)(SM) to shareholders after calendar year end. 

"Excluding physical gold ETFs Invesco PowerShares is the leader in the commodity/currency ETF space with over $8 billion in franchise assets," said Dan Draper, Head of Invesco PowerShares. "By leveraging our existing leadership in this area, we are expanding our already diversified range of commodity products with our latest smart beta offering, PDBC." 

Invesco PowerShares has a long history of experience in alternative ETFs, beginning in 2006 when the PowerShares DB fund suite was introduced to meet growing investor demand for broad and efficient exposure to commodities in a liquid, transparent and cost effective vehicle. As part of the firm's ongoing commitment to the commodity/currency product suite, on October 30, 2014, Invesco PowerShares Capital Management, LLC entered into an agreement with DB Commodity Services, LLC, the adviser to the PowerShares DB fund suite, to transfer management of the existing PowerShares DB fund suite to Invesco PowerShares. The transaction is expected to close in the first quarter of 2015. 

PDBC is an actively managed ETF benchmarked to a smart beta index, expanding Invesco PowerShares' leading suite of smart beta ETFs to 82 portfolios -- the largest and broadest range available today. As the 4th largest provider of ETFs in the US and globally, Invesco PowerShares is recognized as a pioneer behind the smart beta revolution, having introduced many of the first smart beta strategies, and currently offer 60 smart beta ETFs with track records greater than 5-years.

"In today's unusually low interest rate environment, rising market volatility and the potential for additional rate changes are posing real challenges for investors," said Lorraine Wang, Invesco PowerShares Global Head of ETF Products and Research. "Commodities have historically exhibited low correlation to stocks and bonds. We believe broad-based commodity exposure like PDBC may help diversify a portfolio's returns and improve investors' overall risk-adjusted returns."

Through the ETF structure, exposure to commodities can be added to a portfolio as efficiently as stocks or bonds. Rather than purchase exposure to individual commodities, investors can gain broad and diversified access. PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio (PDBC) seeks to outperform its benchmark through actively managed investments in commodity-linked futures contracts. PDBC provides exposure to components of the DBIQ Optimum Yield Diversified Commodity Index Excess Return (Benchmark) which is composed of futures contracts on 14 heavily traded commodities across the energy, precious metals, industrial metals and agriculture sectors. 

The DBIQ Optimum Yield Diversified Commodity Index Total Return* (DB Commodity Index) has historically exhibited low correlations to stocks and bonds (Exhibit 1). As investors consider rising rates and market volatility, commodities may provide an additional layer of portfolio diversification beyond traditional equity and fixed-income allocations.

To learn more about the PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio (PDBC), please visit www.powershares.com

* Since ordinary brokerage commissions apply for each buy and sell transaction, frequent trading activity may increase the cost of ETFs. ETFs disclose their full portfolio holdings daily. Shares are not individually redeemable and owners of the Shares may acquire those shares from the Funds and tender those shares for redemption to the Funds in Creation Unit aggregations only, typically consisting of 50,000 Shares.

Invesco PowerShares does not offer tax advice. Please consult your own tax advisor for information regarding your own tax situation.

About Invesco PowerShares Capital Management LLC and Invesco, Ltd.
Invesco PowerShares Capital Management LLC is leading the Intelligent ETF Revolution® through its family of more than 170 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 of nearly $100 billion1 as of September 30, 2014. PowerShares ETFs trade on both US stock exchanges. For more information, please visit us at invescopowershares.com or follow us on Twitter @PowerShares.

Invesco Ltd. is a leading independent global investment management firm, 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 clients around the world. Operating in more than 20 countries, the firm is listed on the New York Stock Exchange under the symbol IVZ. Additional information is available at www.invesco.com.

1 US franchise assets include QQQs, BLDRS and DB Funds. ALPS Distributors, Inc. is the distributor of PowerShares QQQ, BLDRS Funds and PowerShares DB Funds. PowerShares QQQ and BLDRS Funds are unit investment trusts. Invesco PowerShares and Invesco Distributors, Inc. are not affiliated with ALPS Distributors, Inc.

Not FDIC Insured | May Lose Value | No Bank Guarantee

Important Risk Information

**PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio (PDBC) seeks to outperform the excess return version of its Benchmark (DBLCDBCE). Because PDBC collateralizes its futures positions, the results of the total return version of the Benchmark, DBIQ Optimum Yield Diversified Commodity Index Total Return are displayed.

There are risks involved with investing in ETFs, including possible loss of money.

Index-based ETFs are not actively managed. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Both index based and actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply.

The Fund is subject to management risk because it is an actively managed portfolio. The investment techniques and risk analysis used by the portfolio managers may not produce the desired results.

Risks of futures contracts include: an imperfect correlation between the value of the futures contract and underlying commodity; possible lack of a liquid secondary market; the inability to close a futures contract when desired; losses caused by unanticipated market movement; obligation for the Funds to make daily cash payments to maintain its required margin; possibility that a failure to close a position may result in the Funds receiving an illiquid commodity; and unfavorable execution prices from rapid selling.

Commodity-linked instruments are subject to greater risk, and are more greatly impacted by market volatility, than traditional securities.

Investments in fixed-income securities, such as notes and bonds, carry interest rate and credit risk. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. Credit risk is the risk of loss on an investment due to the deterioration of an issuer's financial health.

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 considered non-diversified and may be subject to greater risks than a diversified fund.

In pursuing its investment strategy, particularly when "rolling" futures contracts, the Fund may engage in frequent trading of its portfolio securities, resulting in a high portfolio turnover rate.

The Fund may engage in frequent trading of portfolio securities, resulting in high portfolio turnover rates.

Beta is a measure of risk representing how a security is expected to respond to general market movements. Smart Beta represents an alternative and selection index based methodology that seeks to outperform a benchmark or reduce portfolio risk, or both. Smart beta funds may underperform cap-weighted benchmarks and increase portfolio risk.

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 50,000 shares.

"Deutsche Bank" and "DBIQ Optimum Yield Diversified Commodity Index Excess Return Index(SM) " are reprinted with permission. © Copyright 2014 Deutsche Bank AG. All rights reserved. "Deutsche Bank" and DBIQ Optimum Yield Diversified Commodity Index Excess Return Index(SM) are service marks of Deutsche Bank AG and have been licensed for use for certain purposes by PowerShares Capital Management LLC. The PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio is not sponsored, endorsed, sold or promoted by Deutsche Bank AG or any of its affiliates of subsidiaries. Deutsche Bank AG and Deutsche Bank Securities Inc., as Index Provider, make no representation, express or implied, regarding the advisability of investing in this product. As the Index Provider, Deutsche Bank AG and Deutsche Bank Securities Inc. are licensing certain trademarks, the underlying Index and trade names which are composed by Deutsche Bank AG and Deutsche Bank Securities Inc. without regard to this Index, this product or any investor.

PowerShares® is a registered trademark of Invesco PowerShares Capital Management LLC (Invesco PowerShares). Invesco PowerShares and Invesco Distributors, Inc. are indirect, wholly owned subsidiaries of Invesco Ltd.

Invesco Distributors, Inc. is the distributor of the PowerShares Actively Managed Exchange-Traded Commodity Fund Trust.

Note: Not all products available through all firms or in all jurisdictions.

Before investing, investors should carefully read the prospectus/summary prospectus and carefully consider the investment objectives, risks, charges and expenses. For this and more complete information about the Fund call 800 983 0903 or visit invescopowershares.com for the prospectus/summary prospectus.

Contact Information

  • CONTACT:
    Jeaneen Terrio
    Invesco/Invesco PowerShares
    212.278.9205
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