Deals & People June 17, 2011

Fiduciary Investment Advisors Hires Two Consultants

Kevin O’Brien and Tyler Polk are the newest investment consultants at Fiduciary Investment Advisors (FIA), based in Windsor, Connecticut.
Reported by

O’Brien has more than a decade of experience providing investment advisory services to retirement plans. He works with corporate, nonprofit, and municipal clients. Prior to FIA, he was a member of the investment staff overseeing the portfolio of Baystate Health, Inc. His background also includes positions at Old Mutual Capital and Phoenix Investment Partners (now Virtus Investment Partners).

Polk has nearly a decade of experience in the industry. His focus is on defined contribution retirement plans, both corporate and tax-exempt. Prior to FIA, he was a Consultant at Lindberg & Ripple Inc. whose primary duties included supervising the Group Retirement division and assisting clients with their qualified planning goals. His previous roles also include Retirement Plan Wholesaler and Plan Manager at Hartford Life. 

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Fiduciary Investment Advisors is an independent, employee-owned investment consulting firm that works with fiduciary clients including retirement plan sponsors, non-profit organizations, and wealthy families. Assets under advisement total more than $18 Billion. 

Products June 17, 2011

Invesco Introduces Fundamental Pure Style ETFs

Invesco PowerShares Capital Management LLC is rolling out a suite of nine PowerShares Fundamental Pure Style exchange-traded funds (ETFs). 
Reported by

The new funds, which are based on methodology from the Research Affiliates Fundamental Index (RAFI) Fundamental US Style Index Series, have begun trading on the NYSE Arca. Their names and tickers are listed below:

  

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Value 

Core 

Growth 

Large 

PowerShares Fundamental Pure
Large Value Portfolio (PXLV) 

PowerShares Fundamental Pure
Large Core Portfolio (PXLC) 

PowerShares Fundamental Pure
Large Growth Portfolio (PXLG) 

Mid 

PowerShares Fundamental Pure
Mid Value Portfolio (PXMV) 

PowerShares Fundamental Pure
Mid Core Portfolio (PXMC) 

PowerShares Fundamental Pure
Mid Growth Portfolio (PXMG) 

Small 

PowerShares Fundamental Pure
Small Value Portfolio (PXSV) 

PowerShares Fundamental Pure
Small Core Portfolio (PXSC) 

PowerShares Fundamental Pure
Small Growth Portfolio (PXSG) 

The PowerShares Fundamental Pure Style ETFs are designed to address the structural performance drag caused by market cap-weighting, which over time tends to overweight overvalued stocks and underweight undervalued stocks. The RAFI methodology uses four measures of economic size rather than market capitalization to weight each position; by selecting and weighting by economic size rather than market-cap, these funds effectively break the link between market price and index weight.

The indexes are constructed from the 2,500 largest U.S. listed companies, based on four fundamental measures of firm size: latest available book value, cash flow averaged over the prior five years, sales averaged over the prior five years, and total dividend distributions averaged over the prior five years.

The release stated that a composite fundamental weight is calculated for each firm by equally weighting the four fundamental measures. For companies that have never paid dividends, that measure will be excluded from the average.

Each company is then classified as “large,” “mid,” or “small” and “growth,” “core,” or “value” in the following manner:

  1. Stocks are segregated into three size groups: “large,” “mid,” and “small.” Companies are divided amongst these groups based on their fundamental weight. Securities that have a substantially different fundamental weight relative to their market-cap weight are excluded.
  2. Once classified into the three size groups, RAFI methodology uses fundamental measures of growth and value to give each company a style score. Based on this style score, companies are classified as “growth,” “core,” or “value.” 
  3. Stocks within each sub-index are weighted by their composite fundamental weight. 

Each index in the RAFI Fundamental US Style Index Series is reconstituted and rebalanced annually on the third Friday of March.

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