introducing powershares ® funds by: allen teska cfp, cim, fcsi june 12 th, 2010 for advisor use...
TRANSCRIPT
Introducing
PowerShares® Funds
By: Allen Teska CFP, CIM, FCSIJune 12th, 2010
For advisor use only.No portion of this communication may be reproduced or distributed to members of the public.
This presentation was not produced by Invesco PowerShares Capital Management LLC
2 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Specialized investment capabilities globally
Invesco AimInvestment focus: U.S., international and global equities
Invesco TrimarkInvestment focus: Canadian equities, fixed income and global value
Invesco Asia-PacificInvestment focus:
Asian Ex-Japanese, greater Chinese, Japanese and Australian equities
Invesco Global StrategiesInvestment focus:
Global equity
(global, non-U.S., and emerging market equities)
Quantitative equity
(quantitative active, enhanced and long/short strategies)
Global asset allocation
(tactical asset allocation, alternative beta and multi-asset class solutions
Invesco Real EstateInvestment focus: Global direct real estate investing and public real estate investing
Invesco Worldwide Fixed IncomeInvestment focus: Money market, stable value, global fixed income and alternatives/financial structures
Invesco PowerShares
Investment focus: ETFsAtlantic Trust
Investment focus:
High-net-worth multimanagement
Invesco PerpetualInvestment focus: U.K. equities, fixed income and European equities
Invesco Private CapitalInvestment focus: Fund-of-funds and venture capital private equities
WL RossInvestment focus: Distressed and restructuring private equities
The listed investment centres do not all provide products or services that are available in Canada, nor are their products and services available on all platforms.
3 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Our businessLooking forward from a position of strength
Denotes availability in the Canadian marketplace.
4 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Growth of ETFs and Invesco PowerShares
PowerShares® Funds and their benefits
Implementing PowerShares® Funds into your business
2
1
3
Agenda
5 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
ETF growth and drivers
Source: Barclays Global Investors 1 Relative to mutual funds. Invesco Trimark does not offer tax advice. Please consult your own tax advisor for
information regarding your own tax situation.
Lower cost Tax efficient1
Access to specialized markets Client demand Advisor adoption
6 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Act like an institutional investorInstitutional usage of ETFs
More than 1,950 U.S. institutions report holding at least one exchange-traded product (ETP) as of December 31, 2008
— 413 hedge fund managers— 83 mutual fund complexes— 37 insurance companies— 24 pension funds— 11 endowments/foundations
15 of the 20 largest hedge funds use ETFs
Five of the six largest U.S. endowments report ETF usage among their top 10 holdings
— Harvard Management Company lists eight ETPs among top 10 equity holdings
17 of the 20 largest mutual fund complexes use ETFs in their portfolios
Source: State Street Global Advisors; Bloomberg. Data as at December 31, 2007. Based on 13F-filings.
7 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
What are ETFs?
Combine features of mutual funds and individual stocks
Provide exposure to a group of securities through the purchase of a single share
Trade on all major exchanges at market-determined prices and can be bought and sold at any moment during market hours through brokerage accounts
8 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
History of ETFs
The first U.S. ETF was created in 1993 to mirror the price and yield of the S&P 500 Index1
Later, ETFs were modeled after narrower indices, tracking specific sectors, commodities or regions
Most recently, ETFs have been modeled after “intelligent indices”
1 Source: “Actively Managed Exchange-Traded Funds,” sec.gov.
9 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
› Low expenses*
› Portfolio transparency
› Near instant liquidity (NAV every 15 seconds)
› Trade at or near NAV
› Long or short (including downtick)
› Purchase on margin
› Flexible: Market/Stop/Limit orders
› Tax-efficient structure1
› Options2
* Ordinary brokerage commissions apply. 1 Relative to mutual funds. Invesco Trimark does not offer tax advice. Please consult your own tax advisor for information
regarding your own tax situation. 2 Options may not be suitable for all investors.
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 units only, typically consisting of 50,000 shares.
The benefits of ETFs
10 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Relationship between ETFs and indices
Index ETF Investors
Index owner
Licensing agreement
ETF sponsor
Such as:
Research Affiliates® (FTSE RAFI)
Standard and Poor’s (S&P)
Morgan Stanley Capital International (MSCI)
Indxis
Such as:
PowerShares (Invesco) iShares (Blackrock) SPDRs (State Street)
11 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
You can access PowerShares ETFs through a number of solutions
Through the NYSE for those IIROC licensed
As a component of our Retirement Payout Portfolios (RPPs)
Available through our new PowerShares® Funds
12 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Growth of ETFs and Invesco PowerShares
PowerShares® Funds and their benefits
Implementing PowerShares® Funds into your business
2
1
3
Agenda
13 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
PowerShares® Funds
Mutual funds Familiar to investors
and well-established in marketplace
Enhanced tax efficiency when offered in a mutual fund corporation
Easy to purchase (e.g., through pre-authorized chequing plans)
Typically purchased in Canadian dollars
U.S.-listed ETF mutual fund+Innovative structure
U.S.–listed ETFs Lower cost Portfolio transparency1
Fully invested Provide access to wide
range of markets and sectors
More tax-efficient than Canadian-listed ETFs
1 ETFs disclose their full portfolio holdings daily
Innovative structure
14 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Index
Index
PowerShares ETF
Invest in ETFs
Replicates
PowerShares® Funds
Replicate
Structure with U.S.-listed ETF Structure without U.S.-listed ETF
PowerShares® Funds structure
PowerShares® Funds
¥ U.S.-dollar currency hedging on all PowerShares® Funds that purchase underlying U.S.-listed ETFs as well as PowerShares High Yield Corporate Bond Index Fund.
15 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
PowerShares® Funds compared to TSX-listed ETFs
PowerShares®
Funds TSX-listed ETFs
Low cost
Portfolio transparency
Access/diversification
Intra-day liquidity
Trade at NAV
Sell short
Limit and stop orders
Listed options available
Trade in C$
Available to MFDA and IIROC
Compensation – Advisor
Grid payout
PAC, DRIPs and SWPs
Small subsequent transactions
Client services support
16 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
17 PowerShares® Funds in total
Introducing… Full suite of PowerShares® Funds
PowerShares 1-5 Year Laddered Corporate Bond Index Fund
PowerShares Real Return Bond Index Fund
PowerShares FTSE RAFI® U.S. Fundamental Fund
PowerShares FTSE RAFI® Global+ Fundamental Fund
PowerShares Canadian Preferred Share Index Class
PowerShares Global Dividend Achievers Fund
PowerShares High Yield Corporate Bond Index Fund
PowerShares Diversified Yield Fund
PowerShares India Class
PowerShares FTSE RAFI® Canadian Fundamental Index Class
PowerShares Canadian Dividend Index Class
PowerShares Global Water Class
PowerShares Global Clean Energy Class
PowerShares Global Gold and Precious Metals Class
PowerShares Golden Dragon China Class
PowerShares Global Agriculture Class
PowerShares FTSE RAFI® Emerging Markets Fundamental Class
Fixed income
Dividend income
Fundamentals Weighted®
Intelligentaccess
10 corporate class funds
7 trust funds
17 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Greater tax efficiency in a
lower-cost solution
Enhanced portfolio risk management
Intelligent indices
and access
PowerShares® Funds and their benefits
18 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Fund facts Series A MER: 0.95%1
Trailer: 0.50% Series F MER: 0.37%1
Category/Asset class: Fixed income (Canadian InflationProtection)2
Asset class size: $1.7B3
Median Fund MER in category: 1.89%4
Fee reduction against median: 0.94%
Distributions: Income: semi-annually Capital gains: annually
Index information Duration: 16.05 Current gross yield: 1.48%5
Source: PC Bond. As at December 31, 2009
Index: DEX Real Return Canada Bond Index™ Index requirements Government of Canada Real Return Bonds Constituents with maturity greater than one year
Why invest? Hedges against inflation over the long term Low credit risk of federal government default Provides valuable diversification in a fixed-income portfolio Provides a cost-effective way to access Real Return Bonds
PowerShares Real Return Bond Index Fund
1 As the Funds have not yet reach a full financial year, these MER are estimated. Please see “Important information – MER disclosure” slide at the end of the presentation for more details. Subject to change. It is Invesco’s intention to absorb operating expenses so that the operating expense portion of the MER for these Funds does not exceed 15 bps for Series A and 10 bps for Series F, exclusive of taxes. Invesco may increase that limit in its discretion. Fees may fluctuate depending on USD fluctuation and are subject to change as the underlying ETF charges its fees in USD and the Fund converts that expense to Canadian dollars for the purposes of calculating the MER. It is possible that the ETF fee, expressed as a percentage of the Fund’s assets, may be greater or less than the stated management fee rate for the ETF, depending on the USD-Cdn dollar exchange rate. We do not expect that these differences will be material.
2 Source: Investment Funds Institute of Canada (IFIC). As at October 31, 2009. 3 Source: IFIC. As at October 31, 2009. 4 As at October 31, 2009. Source: PALTrak. 5 Does not include principal adjustments (up or down), which are included in taxable income (as interest) at the time of the adjustment.
19 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Less costly with greater tax efficiencyPricing – Series F
5 bps incremental fee over underlying ETF, expenses capped at 10 bps
Estimated MER1 on average 50 bps lower than the fund category average5
PowerShares® Fund list - Series F MAF
Operatingexpense
cap2 Subtotal3
UnderlyingPowerShares
ETF fee4
EstimatedMER
0.55 0.10 0.68 0.68
0.50 0.10 0.63 0.63
0.05 0.10 0.16 0.75 0.91
0.05 0.10 0.16 0.75 0.91
0.05 0.10 0.16 0.75 0.91
0.05 0.10 0.16 0.75 0.91
0.05 0.10 0.16 0.60 0.76
PowerShares FTSE RAFI Canadian Fundamental Index Class
PowerShares Canadian Dividend Index Class
PowerShares Global Agriculture Class
PowerShares Global Gold and Precious Metals Class
PowerShares Global Water Class
PowerShares Global Clean Energy Class
PowerShares Golden Dragon China Class
PowerShares FTSE RAFI Emerging Markets Fundamental Class 0.05 0.10 0.16 0.85 1.01
1As the Funds have not yet reach a full financial year, these MER are estimated. Please see slide 77 for more details. 2Subject to change. It is Invesco’s intention to absorb operating expenses so that the operating expense portion of the MER for Series F of these Funds does not exceed 10 bps, exclusive of taxes. Invesco may increase that limit in its discretion. 3This includes an estimated value for the GST; based on a 5% charge against the MAF and fund expenses. 4As of October 31, 2009 (April 30, 2009 for PowerShares Golden Dragon China Class); fees may fluctuate depending on USD fluctuation and are subject to change as the underlying ETF charges its fees in USD and the Fund converts that expense to Canadian dollars for the purposes of calculating the MER. It is possible that the ETF fee, expressed as a percentage of the Fund’s assets, may be greater or less than the stated management fee rate for the ETF, depending on the USD-Cdn dollar exchange rate. We do not expect that these differences will be material. 5 Median fund MER, as at October 31 2009; Source: Morningstar Research Inc.
20 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Enhanced portfolio risk management
Portfolio transparency
As opposed to regular mutual funds, which publish their complete holdings semi-annually, PowerShares® Funds report a complete holdings listing daily
Hedging U.S. dollar
The Funds will hedge a substantial portion of the U.S. dollar
The hedging activity will not impact the foreign currency exposure experienced by the underlying ETF
21 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Share-for-share exchange defers capital gains recognition
Less costly with greater tax efficiency Corporate class funds – Impact of switching
Rollover
Trigger
22 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Features of U.S.-listed ETFs: Greater tax efficiency
Superior tax treatment of underlying U.S.-listed ETFs – less likely than Canadian-listed ETFs to distribute capital gains
Invesco PowerShares in particular has only once made a capital gains distribution on any of its 117 ETFs*, allowing more of your money to stay invested
Allows more of your clients’ money to stay invested
*As at January 7, 2010. Past performance no guarantee of future results.
Greater tax efficiency
23 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
PowerShares® Funds
Greater tax efficiency in a
lower-cost solution
Enhanced portfolio risk management
Intelligent indices
and access
A better portfolio
PowerShares® Funds
Introducing
PowerShares® FundsFocus on Fixed Income
For advisor use only.No portion of this communication may be reproduced or distributed to members of the public.
This presentation was not produced by Invesco PowerShares Capital Management LLC
25 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Growth of ETFs and Invesco PowerShares
PowerShares® Funds and their benefits
Implementing PowerShares® Funds into your business
2
1
3
Agenda
26 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Non-inflationary
growth 51%
Recession 17% Inflationary
growth 32%
Rethinking riskDefending a portfolio
Source: Invesco Analysis, percentage of months since August 1973, based on historical analysis, and should not be considered future-looking.
Probability of economic environments
27 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Emerging markets equity
Asset allocation – Harvard style
Policy portfolio evolution
Private equities
Fixed income
Real assets
Domestic equities
Cash
Absolute return & special situations
Developed foreignequities
120%
100%
80%
60%
40%
20%
0%
-20%1980 1988 1996 2008
Source: Harvard Management Company, Inc., as at December 31, 2007
19911980 1988 1991 1996 20082000 2007
28 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Rethinking riskEconomic environments and asset classes
• Developed equities
• Emerging equities
• Private equity
• Hedge funds: long-short equity
• Long-term government bonds
Inflationary growth
• Commodities
• Floating-rate securities
• Market neutral
• Natural resources
• Real estate
Non-inflationary growth Recession
Risk means more things can happen than will happen
29 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
EquitiesFixed Income
Increased diversification Higher potential returns for a
given level of risk
Starting with core fixed-income allocation
COREFixed income
Corporate bonds
Government bonds
Long-term bond40%
Real Return Bond10%
1-5 year laddered bond15%
Short-term government bond
10%
High-yield bond10%
Floating-rate loan15%
For illustrative purposes only.
30 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Bond exposure in different economic cycles
0%
5%
10%
15%
20%
25%
Source: Bank of Canada
Canadian interest ratesJanuary 1980 to December 2009
31 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Source: Zephyr StyleADVISOR as at November 30, 2009. Short Term Corporate Bonds are represented by the DEX Short Term Corporate Bond Index. Real Return Bonds are represented by the DEX Real Return Canada Bond Index. Long Term Corporate Bonds are represented by the DEX Long Term Corporate Bond Index. Floating Rate Loans are represented by the Credit Suisse Leveraged Loan Index (USD). High Yield Bond are represented by the Merrill Lynch High Yield Master II (USD). Short Term Government Bonds are represented by the DEX Short Term Government Bond Index. Long Term Government Bonds are represented by the DEX Long Term Government Bond Index.
Bond exposure in different economic cycles
32 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Trimark Canadian Bond Fund
Investment-grade bonds
Floating coupon
High-yield bonds
Trimark Floating Rate Income Fund
PowerShares Real Return Bond Index Fund
Trimark Global High Yield Bond Fund
Trimark Advantage Bond Fund
PowerShares High Yield Corporate Bond Index Fund
Government bonds
Trimark Government Plus Income Fund
PowerShares 1-5 Year Laddered Corporate Bond Index Fund
Better fixed-income through duration and credit risk management
33 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Fund facts Series A MER: 0.95%1
Trailer: 0.50% Series F MER: 0.37%1
Category/Asset class: Fixed income (Canadian Short-TermFixed Income) Asset class size: $12.8B2
Median fund MER in category: 1.68%3
Fee reduction against median: 0.73%
Distributions: Income: monthly Capital gains: annually
Index information* Duration: 2.79 Gross yield information
5.06% Cash yield 2.79% YTM
Source: PC Bond. As at January 14, 2010
Index: DEX Investment Grade 1-5 Year Laddered Corporate Bond Index
Why invest? Provides diversification by bond issue and term to maturity Requires no extensive bond research Requires no continual portfolio maintenance Mitigates the effects of interest-rate risk and reinvestment-rate risk Compared to buying individual bonds, bond funds lessen the impact of
single-security credit risk Bond funds make reinvestment of interest payments easier Provides a more cost-effective way to diversify a fixed-income portfolio
PowerShares 1-5 Year Laddered Corporate Bond Index Fund
Index requirements Select five corporate bonds for each term bucket with the highest volume 25 constituents weighted by market cap Investment grade or higher
1 As the Funds have not yet reach a full financial year, these MER are estimated. Please see MER disclaimer slide for more details. Subject to change. It is Invesco’s intention to absorb operating expenses so that the operating expense portion of the MER for these Funds does not exceed 15 bps for Series A and 10 bps for Series F, exclusive of taxes. Invesco may increase that limit in its discretion. Fees may fluctuate depending on USD fluctuation and are subject to change as the underlying ETF charges its fees in USD and the Fund converts that expense to Canadian dollars for the purposes of calculating the MER. It is possible that the ETF fee, expressed as a percentage of the Fund’s assets, may be greater or less than the stated management fee rate for the ETF, depending on the U.S.-Cdn dollar exchange rate. We do not expect that these differences will be material.
2 Source: Investment Funds Institute of Canada (IFIC). As at October 31, 2009. 3 Source: IFIC. As at October 31, 2009.4 As at October 31, 2009. Source: PALTrak.
34 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Fund facts Series A MER: 0.95%1
Trailer: 0.50% Series F MER: 0.37%1
Category/Asset class: Fixed income (Canadian InflationProtection)2
Asset class size: $1.7B3
Median Fund MER in category: 1.89%4
Fee reduction against median: 0.94%
Distributions: Income: semi-annually Capital gains: annually
Index information Duration: 16.05 Current gross yield: 1.48%5
Source: PC Bond. As at December 31, 2009
Index: DEX Real Return Canada Bond Index™ Index requirements Government of Canada Real Return Bonds Constituents with maturity greater than one year
Why invest? Hedges against inflation over the long term Low credit risk of federal government default Provides valuable diversification in a fixed-income portfolio Provides a cost-effective way to access Real Return Bonds
PowerShares Real Return Bond Index Fund
1 As the Funds have not yet reach a full financial year, these MER are estimated. Please see MER disclaimer slide for more details. Subject to change. It is Invesco’s intention to absorb operating expenses so that the operating expense portion of the MER for these Funds does not exceed 15 bps for Series A and 10 bps for Series F, exclusive of taxes. Invesco may increase that limit in its discretion. Fees may fluctuate depending on USD fluctuation and are subject to change as the underlying ETF charges its fees in USD and the Fund converts that expense to Canadian dollars for the purposes of calculating the MER. It is possible that the ETF fee, expressed as a percentage of the Fund’s assets, may be greater or less than the stated management fee rate for the ETF, depending on the USD-Cdn dollar exchange rate. We do not expect that these differences will be material.
2 Source: Investment Funds Institute of Canada (IFIC). As at October 31, 2009. 3 Source: IFIC. As at October 31, 2009. 4 As at October 31, 2009. Source: PALTrak. 5 Does not include principal adjustments (up or down), which are included in taxable income (as interest) at the time of the adjustment.
35 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Fund facts Series A MER: 1.21%1
Trailer: 0.50% Series F MER: 0.63%1
Category/Asset class: Fixed Income (High-Yield Bond)2 Asset class size: $9B3
Median fund MER in category: 1.68%4
Fee reduction against median: 0.47%
Distributions: Income: monthly Capital gains: annually
Index information Duration: 3.15 Current gross yield: 7.29%Source: Merrill Lynch, as at December 31, 2009
Index: BofA Merrill Lynch US High Yield 100 Index Index requirements A bond must be a constituent of the US High Yield Constrained Index (HUC0), have at least $200 million outstanding face value, have a remaining term to final maturity of at least two years, be issued by a corporation with a country of risk of the United States, Canada, the United Kingdom or a Euro member country, have a CCC3 or higher rating (based on an average of Moody’s, S&P and Fitch)
Why invest? Provides diversification of high-yield bonds by issue and issuer Generally offers higher yields than common dividends Provides high current income Tracks an asset class with historically low correlation to investment-
grade bonds and money market instruments Requires no extensive research of high-yield securities Compared to buying single bonds, bond funds lessen the impact of
single-security credit risk Provides a more cost-effective way to add high-yield bonds to a
fixed-income portfolio
1 As the Funds have not yet reach a full financial year, these MER are estimated. Please see MER disclaimer slide for more details. Subject to change. It is Invesco’s intention to absorb operating expenses so that the operating expense portion of the MER for Series A of these Funds does not exceed 15 bps, exclusive of taxes, and operating expenses for series F not to exceed 10bps, exclusive of taxes. Invesco may increase that limit in its discretion. Fees may fluctuate depending on USD fluctuation and are subject to change as the underlying ETF charges its fees in USD and the Fund converts that expense to Canadian dollars for the purposes of calculating the MER. It is possible that the ETF fee, expressed as a percentage of the Fund’s assets, may be greater or less than the stated management fee rate for the ETF, depending on the USD-Cdn dollar exchange rate. We do not expect that these differences will be material.
2 Source: Investment Funds Institute of Canada (IFIC). As at October 31, 2009. 3 Source: IFIC. As at October 31, 2009. 4 As at October 31, 2009. Source: PALTrak.
PowerShares High Yield Corporate Bond Index Fund
36 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
EquitiesFixed Income
Increased diversification Higher potential returns for a
given level of risk
Starting with core fixed-income allocation
COREFixed income
Corporate bonds
Government bonds
Long-term bond40%
Real Return Bond10%
1-5 year laddered bond15%
Short-term government bond
10%
High-yield bond10%
Floating-rate loan15%
For illustrative purposes only.
37 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
PowerShares Diversified Yield Fund
PowerShares 1-5 yr
Laddered Corporate
Bond Index Fund
PowerShares Canadian Dividend
Index Class
PowerShares High Yield Corporate
Bond Index Fund
PowerShares Canadian Preferred
Share Index Class
35% 15% 30% 20%
Why invest? Provides a current income stream and the potential for
moderate capital appreciation Provides a diversified basket of income-producing vehicles Low-cost, single-ticket solution
1 As the Funds have not yet reach a full financial year, these MER are estimated. Please see MER disclaimer slide for more details. Subject to change. It is Invesco’s intention to absorb operating expenses so that the operating expense portion of the MER for these Funds does not exceed 15 bps for Series A and 10 bps for Series F, exclusive of taxes. Invesco may increase that limit in its discretion. Fees may fluctuate depending on USD fluctuation and are subject to change as the underlying ETF charges its fees in USD and the Fund converts that expense to Canadian dollars for the purposes of calculating the MER. It is possible that the ETF fee, expressed as a percentage of the Fund’s assets, may be greater or less than the stated management fee rate for the ETF, depending on the U.S.-Cdn dollar exchange rate. We do not expect that these differences will be material.
2 Source: Investment Funds Institute of Canada (IFIC). As at October 31, 2009. 3 As at October 31, 2009. Source: PALTrak. 4 Hypothetical duration calculated as a weighted average of the duration of the fixed-income indices underlying the component funds. Durations have been sourced from PC Bond. Data as at December 31, 2009.
5 Hypothetical yields have been calculated as a weighted average of the yields of the indices underlying the component funds. Yield sources: PC Bond, Bloomberg LP and Indxis Inc. Data as at December 31, 2009.
PowerShares Diversified Yield Fund
Fund facts Series A MER: 1.63%1
Series T6: 1.63%1
Series T8 MER: 1.63%1
Trailer: 1.0% Series F MER: 0.53%1
Category/Asset class: Canadian Dividend2
Asset class size: $57B2
Median fund MER in category: 2.29%3
Fee reduction against median: 0.66%
Distributions: Income: quarterlyCapital gains: annuallyT6 and T8 monthly as per target payout
Index information Duration: 2.924
Current gross yield: 4.67%5
Questions
This presentation was not produced by Invesco PowerShares Capital Management LLC
For advisor use only.No portion of this communication may be reproduced or distributed to members of the public.
39 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Additional resources
Additional sales support tools:
PowerShares® Funds Advisor Q&A
PowerShares® Funds at-a-glance summary
PowerShares® Funds client brochure
Prospecting letter
Co-op ad
Client seminar kit
40 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Important informationMER disclosure
As the Funds have not completed a financial year, we are unable to provide an MER; however, based on the management fee for each Fund, the management fee for each underlying PowerShares ETF (where applicable), GST, and our commitment to cap operating expenses at 15 bps for Series A and 10 bps for Series F (exclusive of taxes), we expect that, once we have completed a full financial year, the MER for each Fund will be approximately as set forth in the previous tables. It is possible that MERs will be higher once the HST comes into effect or that we will be able to operate the Funds more efficiently than planned and, thereby, will not need to invoke the 15 bps cap (Series A) and 10 bps cap (Series F).
41 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Important informationRisk disclosure
As with all investments there are associated inherent risks.
This presentation is not intended to provide legal, accounting, tax or specific investment advice. If such advice is required, the services of a competent professional should be sought. The information contained in this presentation was obtained or compiled from sources believed to be reliable; however, Invesco Trimark cannot represent that it is accurate or complete.
Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. Mutual funds 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 Trimark Ltd.
42 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Important informationGeneral PowerShares® Funds disclosure
Units/shares of the Funds and of the underlying PowerShares ETFs are not in any way sponsored, endorsed, sold or promoted by any of the Funds’ or PowerShares ETFs’ underlying Index providers or their affiliates, and these companies make no representation or warranty, express or implied, as to the results to be obtained from the use of the Index. None of these companies are affiliated with Invesco Trimark Ltd., Invesco PowerShares Capital Management LLC, or Invesco Advisers, Inc., nor any of their affiliates. Products are not sponsored, endorsed, sold or promoted by any of the Index providers, and the Index providers make no representation regarding the advisability of investing in these Funds.
43 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Invesco Canada may receive consideration for its role in marketing PowerShares ETFs to Canadian financial advisors.
No prospectus for the Shares has been filed with Canadian securities regulators, and no Canadian securities regulator has expressed an opinion about the Shares.
Invesco Canada and its affiliates do not provide tax advice, and nothing contained herein should be construed as tax advice. Investors should seek advice based on their particular circumstances from an independent tax advisor.
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.
There are risks involved with investing in exchange-traded funds, including possible loss of money. The Funds are not actively managed and are subject to risks similar to stocks, including those regarding short selling and margin maintenance. Ordinary brokerage commissions apply.
Shares of the Funds are not in any way sponsored, endorsed, sold or promoted by any of the Funds’ underlying index providers or their affiliates, and these companies make no representation or warranty, express or implied, as to the results to be obtained from the use of the indices. None of these companies are affiliated with Invesco PowerShares or Invesco Canada not any of their affiliates. The products are not sponsored, endorsed sold or promoted by any of the Index providers, and the Index providers make no representation regarding the advisability of investing in the Funds.
An investor should consider the Funds’ investment objectives, risks, charges and expenses carefully before investing. For other information about the Funds, visit our website at invescopowershares.ca.
Not CDIC insured ● No bank guarantee ● May lose value
Important informationPowerShares ETF disclosure
44 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Important informationAwards disclosure
1. To the Fund Sponsor who came up with the most innovative New Product in the given year. 2. To the Fund Sponsor who came up with the most innovative Index in the given year.3. To the Fund Sponsor who came up with the most innovative domestic product in the given year.4. To the Fund Sponsor who came up with the most innovative hybrid product in the given year.
Capital Link: A New York-based investor relations and financial communications firm with a strategic focus on CEFs and ETFs. The Awards are based on nominations by a committee of analysts who actively follow ETFs. The awards aim to identify and recognize annually those fund sponsors and executives who consistently apply high standards of financial disclosure, investor and shareholder relations and innovation.
The Global ETF Awards and Workshop: Hosted by exchangetradedfunds.com. The Global ETF AWARDS® provides an opportunity for industry professionals worldwide to be recognized for their contributions to the growth of the ETF marketplace. Winners are selected by votes cast by ETF industry entities worldwide. Additionally, a series of awards are determined by analysis of statistical data.
The William F. Sharpe Indexing Achievement Awards: Produced in conjunction with the Index Business Association are presented each year. The awards are chosen following a rigorous selection process, starting with a vetting committee of industry practitioners. The vetting committee reviews hundreds of nominations and narrows the field down to three finalists in each category. The finalists are voted upon by the world’s leading academics in the indexing research world.
45 For advisor use only. No portion of this communication may be reproduced or distributed to members of the public.
Important informationTrademark disclosure
Invesco and all associated trademarks are trademarks of Invesco Holding Company Limited, used under licence. Trimark and all associated trademarks are trademarks of Invesco Trimark Ltd. PowerShares and all associated trademarks are trademarks of Invesco PowerShares Capital Management LLC, used under licence.
© Invesco Trimark Ltd., 2010
FTSE is a trademark jointly owned by the London Stock Exchange PLC and The Financial Times Limited and is used by FTSE International Limited under licence. The FTSE RAFI® Index Series is calculated by FTSE International Limited (“FTSE”) in conjunction with Research Affiliates, LLC (“RA”). Neither FTSE nor RA sponsor, endorse or promote this product and are not in any way connected to it and do not accept any liability in relation to its issue, operation and trading. All intellectual property rights in the index values and constituent list vest in FTSE. Fundamental Index® and RAFI® trade names and patent concept are the exclusive property of Research Affiliates, LLC. U.S. Patent Number 7,620,577. Patent pending: US-2005-0171884-A1, US-2006-0149645-A1, US-2007-0055598-A1. Invesco Trimark Ltd. has obtained full licence from FTSE to use such intellectual property rights in the creation of this product.
INDXIS and INDXIS SELECT CANADIAN ACHIEVERS™ are trademarks of Indxis and have been licensed for use by Invesco Trimark. The product is not sponsored, endorsed, sold or promoted by Indxis and Indxis makes no representation regarding the advisability of investing in PowerShares Canadian Dividend Index Class.
PC-Bond is a business unit of TMX Group Inc. Copyright © TMX Inc. All rights reserved. The information contained herein with respect to PC-Bond may not be sold or modified or used to create any derivative work without the prior written consent of TMX Group Inc. PC-Bond and the parties from whom PC-Bond obtains data do not have any liability for the accuracy or completeness of the data provided or for delays, interruptions or omissions therein or the results to be obtained through the use of this data. Neither PC-Bond nor the parties from whom it obtains data make any representation, warranty or condition, either express or implied, as to the results to be obtained from the use of the data or as to the merchantable quality or fitness of the data for a particular purpose.
“BofA Merrill Lynch” and “The BofA Merrill Lynch US High Yield 100 IndexSM” are reprinted with permission. © Copyright 2010 Merrill Lynch, Pierce, Fenner & Smith Incorporated (“BofAML”). All rights reserved. “BofAML” and “The BofA Merrill Lynch US High Yield 100 Index” are service marks of BofAML and/or its affiliates and have been licensed for use for certain purposes by Invesco Trimark Ltd. on behalf of PowerShares High Yield Corporate Bond Index Fund that is based on The BofA Merrill Lynch US High Yield 100 Index, and is not issued, sponsored, endorsed or promoted by BofAML and/or its affiliates nor is BofAML and/or its affiliates an adviser to PowerShares High Yield Corporate Bond Index Fund. BOFAML AND ITS AFFILIATES MAKE NO REPRESENTATION, EXPRESS OR IMPLIED, REGARDING THE ADVISABILITY OF INVESTING IN POWERSHARES HIGH YIELD CORPORATE BOND INDEX FUND OR THE BOFA MERRILL LYNCH US HIGH YIELD 100 INDEX AND DO NOT GUARANTEE THE QUALITY, ACCURACY, TIMELINESS AND/OR COMPLETENESS OF THE BOFA MERRILL LYNCH US HIGH YIELD 100 INDEX, INDEX VALUES OR ANY INDEX-RELATED DATA INCLUDED HEREIN, PROVIDED HEREWITH OR DERIVED THEREFROM AND ASSUME NO LIABILITY IN CONNECTION WITH THEM OR THEIR USE. As the index provider, BofAML is licensing certain trademarks, The BofA Merrill Lynch US High Yield 100 Index and trade names, which are composed by BofAML without regard to Invesco Trimark Ltd., Invesco Trimark Ltd. or PowerShares High Yield Corporate Bond Index Fund or any investor. BofA Merrill Lynch and BufA Merrill Lynch’s affiliates do not provide investment advice to PowerShares High Yield Corporate Bond Index Fund and are not responsible for the performance of PowerShares High Yield Corporate Bond Index Fund.
Thank you
For advisor use only.No portion of this communication may be reproduced or distributed to members of the public.
This presentation was not produced by Invesco PowerShares Capital Management LLC