PowerShares set to list bond ETF on NYSE

The ETF will track the Research Affiliates Fundamental Index (RAFI) methodology which selects bonds based on cash flow, dividends, sales and book value of assets. Maturities of the bonds range from one to 10 years. Traditional fixed income indices tend to select their components based on the size of issuance, which therefore exposes investors in the index to the most heavily indebted companies. This has been a criticism of fixed income ETFs. "We think that the concept of fundamentally weighting products as opposed to cap-weighting, particularly in the case of fixed income ETFs, is a ...