PowerShares Convertible Securities ETF Debuts Today

PowerShares, the fourth-largest U.S. ETF issuer, will introduce the PowerShares Convertible Securities Portfolio ETF CVRT today. With an expense ratio of 0.35%, CVRT will track the BofA Merrill Lynch All U.S. Convertibles Index. The index tracks the performance of dollar-denominated convertible issues trading in the U.S., including on the over-the-counter market. Securities must have an aggregate value of $50 million or more at the time of issuance to be included in the index, according to PowerShares. Index constituents are market value-weighted based on the convertible securities prices and outstanding shares. The Index is rebalanced daily. “The yield on the BofA Merrill Lynch All U.S. Convertibles Index has been higher than the dividend yield on the S&P 500 Index since its inception in December 1994, and it has produced better risk-adjusted returns,”according to Ben Fulton, Invesco PowerShares managing director of global ETFs. Convertible securities are typically issued as corporate bonds or preferred shares, another high-yielding asset class. CVRT will be the twelfth fixed income ETF offered by PowerShares. At the end of April, PowerShares had 120 ETFs and over $64 billion in assets under management, according to National Stock Exchange data. Atlanta-based Invesco IVZ is the parent company of PowerShares.