PowerShares Launches Fundamental Corporate Bond ETF (PFIG)
PowerShares, one of the leading providers of alternative weighted ETFs, announced today the latest addition to its fixed income lineup. The new Fundamental Investment Grade Corporate Bond Portfolio (PFIG) will offer an alternative means of accessing high quality corporate bonds, distinguishing itself from other products in the Corporate Bonds ETFdb Category by the weighting methodology employed by the underlying index. Fundamental Approach PFIG will seek to replicate the RAFI Investment Grade Corporate Bond Index, a benchmark that utilizes the fundamental weighting methodology pioneered by Research Affiliates. Most fixed income indexes–including many of those to which the most popular bond ETFs are linked–assign weightings based on the amount of debt issued and the price of the individual securities. That approach can potentially have some less-than-optimal impacts on the composition of any related ETFs. First, there is a tendency to assign the largest weightings to the largest issuers of debt–a group likely [...] Click here to read the original article on ETFdb.com. Related Posts: State Street Launches Fundamental Corporate Bond ETF (CBND) Recapping Impressive Innovation In Bond ETF Space PHB: Different Kind Of Junk Bond ETF PIMCO Preps To Boost Bond ETF Lineup Future Of The ETF Industry: Part II
PowerShares, one of the leading providers of alternative weighted ETFs, announced today the latest addition to its fixed income lineup. The new Fundamental Investment Grade Corporate Bond Portfolio (PFIG) will offer an alternative means of accessing high quality corporate bonds, distinguishing itself from other products in the Corporate Bonds ETFdb Category by the weighting methodology employed by the underlying index. Fundamental Approach PFIG will seek to replicate the RAFI Investment Grade Corporate Bond Index, a benchmark that utilizes the fundamental weighting methodology pioneered by Research Affiliates. Most fixed income indexes–including many of those to which the most popular bond ETFs are linked–assign weightings based on the amount of debt issued and the price of the individual securities. That approach can potentially have some less-than-optimal impacts on the composition of any related ETFs. First, there is a tendency to assign the largest weightings to the largest issuers of debt–a group likely [...]

Click here to read the original article on ETFdb.com.

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