Börse Frankfurt News
New ETFs: European equity selected by factor strategies
PowerShares offers investors access to major European companies with a selection based on five different factors.
The new smart beta ETFs enable investors to participate in the performance of European stock corporations which are selected based on one of the following factors: quality, value, low beta, price momentum or earnings momentum. The reference indices each comprise 50 exchange-listed European ordinary shares from different sectors; they are weighted on the basis of their liquidity using a modified equal-weighting scheme.
Depending on the factor, different criteria are used to select the index securities. The quality factor takes account of the three company indicators: return on investment, debt level and liquidity. The value factor, in contrast, is applied to select high-value equities as measured by three traditional benchmarks: price-to-earnings and price-to-book ratios and dividend yield. The low beta and price momentum factors are applied to select equities with below-average reaction to movements on the European stock market as a whole or those that recorded an above-average percentage change in share price over the previous year. The earnings momentum factor enables investment in stock corporations with strong, positive earnings momentum expressed as a percentage change in analysts’ consensus earnings estimate.
The product offering in Deutsche Börse's XTF segment currently comprises a total of 1,212 exchange traded funds. This selection, together with an average monthly trading volume of around €11 billion, makes Xetra Europe’s leading trading venue for ETFs.
27, November 2017, © Deutsche Börse AG