Invesco PowerShares Builds Out Fixed-Income Line

The PowerShares Fundamental Emerging Markets Local Debt Portfolio (PFEM) was unveiled by Invesco PowerShares, trading on the NYSE Arca. 

The fund expands Invesco PowerShares’ fundamental fixed-income line with the emerging market local currency sovereign debt portfolio.

PFEM is designed to provide investors fundamentals-weighted exposure to emerging market sovereign debt denominated in local currencies. The fund has an expense ratio of 0.50% and is expected to issue monthly distributions.

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Emerging market sovereign debt represents an attractive asset class that can potentially offer higher yields and lower debt to gross domestic product ratios relative to most developed markets, according to Andrew Schlossberg, head of U.S. distribution and global ETFs at Invesco. “The portfolio is the first ETF to provide investors a fundamentals-weighted exposure to emerging market sovereign debt denominated in local currencies.”

Traditional bond indexes generally use some form of market-cap weighting, where constituent weights are a function of both the amount of debt issued and the debt’s current price. This approach can result in greater weights being assigned to issuers that have issued more debt. In contrast, the Fundamental Index approach developed by Research Affiliates LLC weights bonds based on each country’s economic footprint, resulting in a portfolio that is correlated to a country’s debt service capacity. 

Weighting by fundamentals gives higher portfolio weights to issuers with lower leverage and better debt service capacity, resulting in generally lower credit risk compared with the cap-weight benchmark, according to Shane Shepherd, senior vice president and head of fixed-income research at Research Affiliates. “A regular rebalance back to fundamental weights takes advantage of potential market inefficiencies in credit spreads by buying cheaper bonds and selling more expensive ones,” Shepherd said.

Savant Capital Brings Investment Advice Online

A new service from Savant Capital Management, eSavant Advisor, offers investment and planning advice to online investors. 

Among the first online financial planning, investment and wealth management firms, eSavant Advisor offers each client a dedicated team to help identify needs and construct a vision of the investor’s ideal financial future.

“eSavant Advisor’s goal is to enhance the quality of life for each of our clients, wherever they live,” said Brent Brodeski, chief executive of Savant Capital Management. 

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The platform, eSavant Advisor, can be accessed through www.esavantadvisor.com and applies Savant’s financial expertise with access to its investment solutions, integrated wealth management and planning philosophies.

The service lets clients take advantage of current technology to help them pursue financial goals without any geographic restrictions, Brodeski said. “We’ve been servicing clients remotely for years,” he noted. “eSavant officially launches our targeted approach to provide that robust, personal relationship and quality advisory services to others in a more efficient and effective manner by leveraging the latest technology.”

Savant Capital Management, a fee-only adviser with offices in Illinois, Wisconsin and Virginia, has more than $3 billion in assets under management. 

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