Invesco PowersShares Capital Management will shut 19 of its ETFs on May 18, which marks the final...
Invesco PowersShares Capital Management will shut 19 of its ETFs on May 18, which marks the final day of trading.
The PowerShares Funds Board of Trustees decided at a meeting on Friday to close the funds in "an effort to position its business for future growth opportunities and to align its family of ETFs with the changing investment landscape."
Invesco PowerShares president and CEO Bruce Bond comments: "After carefully evaluating numerous factors including shareholder considerations, length of time on the market, asset levels and the potential for future growth, we proposed closing certain portfolios that have not gained sufficient acceptance with investors."
The range of affected ETFs spans portfolios based on Europe and Asia, aggressive growth strategies, FTSE RAFI sector portfolios including health care and industrials, as well as international listed private equity.
The funds will now begin the process of closing down and liquidating their respective portfolios. However, this will cause each fund's holdings to shift from the securities in the underlying index, potentially leading to increased tracking error, while each fund will increase its cash holdings.
The funds will be closed to new investors as of 19 May, and PowerShares states that shareholders can sell their holdings prior to this date, incurring transaction fees. Shareholders of record will receive cash equal to the amount of the net asset value of their shares as of 22 May including any capital gains and dividends.
The funds to be closed represent less than 1% of Invesco PowerShares' total assets. The range of products comprises 135 portfolios with assets under management of $25.8bn as of 31 March 2009.
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