Invesco PowerShares has launched sector ETFs, tracking KBW indices for the banking, capital markets, insurance and regional banking sectors.
The ETFs began trading on the New York Stock Exchange on 1 November and PowerShares says it expects to see good demand for the products.
"According to KBW research, as of March 2011, there was $3.7 billion tied to these four KBW financial indexes, which shows a great demand both for the financial sector, and for the KBW index line up," says Taylor Ames, from the Product Srategy and Research Group at Invesco PowerShares.
"Although financials have been a more volatile asset class as of late, we believe that investors may see financials as an undervalued sector, and thus it may be worth investing in."
The ETF provider already has a large range of sector ETFs and Ames says they are used at all levels of the investment community. "Retail advisors and investors might use sector ETFs for tactical bets, or as a way to round out a core part of a diversified portfolio.
"At the institutional level, investors might use sector ETFs as a way to either hedge their positions or establish a short position."
Of its current sector ETF offering, Ames says that its products on the energy and consumer sectors have seen the most interest lately, however, financial sector ETFs see continued demand.
The provider has exclusive rights to the indices; the State Street ETFs which were tied to the indices will remain in existence but they will no longer track the indices.
PowerShares has also announced that it is waiving fees on the four new ETFs.
Growth driven by platform business
No preferred charging model
To 1,552 families and businesses
HL and Liberty SIPP slowest
Lifetime and annual allowances