PowerShares Lists Four New Foreign ETFs

Includes: IVE, PAF, PRF, PXF
by: Roger Nusbaum

An article in the WSJ Online on Tuesday said that by the end of 2007, trading in ETFs will shift from the NYSE floor to the NYSE ARCA platform.

Assuming this happens it is one more step to stations looking like this one during the day, and not just after hours.

I buy any argument that says human intervention can help get trades done at critical times, but the truth is that more exchanges around the world are electronic, and the NYSE seems to be headed down the same path.

And not from the department of redundancy department, PowerShares is listing four new foreign ETFs. It just listed a batch under its Dynamic brand, but these newer four will be from theFTSE/RAFI crew, which uses a different methodology.

The four new funds are:

  • PowerShares Europe (PEF)
  • PowerShares Japan (PJO)
  • PowerShares Asia Ex-Japan (NYSEARCA:PAF)
  • PowerShares Developed Market Ex-US (NYSEARCA:PXF)
  • They are scheduled to come on June 25, but the nature of these things is that they could come on another day.

    I was not able to find any composition information on the PowerShares site, so we might have to wait a few days for that info.

    PowerShares overlaps sector funds from the FTSE/RAFI (NYSEARCA:PRF), and Dynamic brands. I looked at a few (not all) of the sectors, comparing the Dynamic versus the corresponding FTSE/RAFI, and the sectors where there was a difference, the nod went to the Dynamic brand often enough for me wonder. I have taken similar looks in the past, and found the same thing.

    I know the flagship FTSE/RAFI fund. It has done very well against the S&P 500 (NYSEARCA:SPY). Not quite as well as S&P 500 Value ETF (NYSEARCA:IVE), but I have not studied the risk adjusted numbers.

    This is a good reminder that there are a lot of variations on the same theme which can make things confusing. Further, I would expect that different methodologies would take turns providing leadership - the Dynamic/FTSE-RAFI results notwithstanding.

    I should note I don't use too many domestic sector ETFs. Generally I think the foreign, or the global sector funds are more interesting.