Invesco PowerShares to Launch the First Variable Rate Preferred ETF
CHICAGO, IL--(Marketwired - Apr 21, 2014) - Invesco PowerShares
Capital Management LLC, a leading global provider of
exchange-traded funds (ETFs), today announced the anticipated
listing of the PowerShares Variable Rate Preferred Portfolio (VRP)
on May 1, 2014, on the NYSEARCA. VRP will provide income-seeking
investors efficient access to a portfolio of variable-rate
preferred securities.
Variable-rate preferred securities are typically issued at rates
below fixed-rate preferred securities of similar quality, in
exchange for the issuer bearing most of the risk for changes in
interest rates. Accordingly, variable-rate preferred
securities are priced more like short-term instruments, rather than
long-term instruments, and are generally less sensitive than
fixed-rate preferred securities to changes in interest rates.
"Investors today are challenged for ways to increase yield and
meet their investment income objectives, while balancing portfolio
exposure to the risk of rising interest rates," said Lorraine Wang,
Invesco PowerShares Global Head of ETF Products and Research. "We
believe VRP offers investors the potential for high current income
and lower interest-rate sensitivity than traditional fixed-rate
preferred securities. Dividends from variable-rate preferred
securities also receive preferential tax rates compared to interest
income, which makes them particularly attractive for top tax
bracket investors.+"
The PowerShares Variable Rate Preferred Portfolio (VRP) is based
on the Wells Fargo® Hybrid and Preferred Securities Floating and
Variable Rate Index (Index). The Fund will generally invest at
least 90% of its total assets in preferred securities that comprise
the Index. The Index is a market capitalization-weighted index
designed to track the performance of preferred stock, as well as
certain types of "hybrid securities" that are functionally
equivalent to preferred stock, that are issued by US-based or
foreign issuers and that pay a floating or variable rate dividend
or coupon. The Fund and the Index are rebalanced monthly.
To learn more about the PowerShares Variable Rate Preferred
Portfolio (VRP), please visit:
http://www.invescopowershares.com/VRP.
+ Invesco PowerShares does not offer tax advice. Please consult
your own tax adviser for information regarding your own tax
situation.
Preferred securities may be less liquid than many other
securities, and in certain circumstances, an issuer of preferred
securities may redeem the securities prior to a specified date.
Please see below for additional risk information.
About Invesco PowerShares Capital Management LLC and Invesco,
Ltd. Invesco PowerShares Capital Management LLC is leading the
Intelligent ETF Revolution® through its family of more than 140
domestic and international exchange-traded funds, which seek to
outperform traditional benchmark indexes while providing advisors
and investors access to an innovative array of focused investment
opportunities. With franchise assets of nearly $100 billion* as of
March 31, 2014, PowerShares ETFs trade on both US stock exchanges.
For more information, please visit us at invescopowershares.com or
follow us on Twitter @PowerShares.
Invesco Ltd. is a leading independent global investment
management firm, dedicated to helping investors worldwide achieve
their financial objectives. By delivering the combined power of our
distinctive investment management capabilities, Invesco provides a
wide range of investment strategies and vehicles to our clients
around the world. Operating in more than 20 countries, the firm is
listed on the New York Stock Exchange under the symbol IVZ.
Additional information is available at www.invesco.com.
*US franchise assets include QQQs, BLDRS and DB
Funds. ALPS Distributors, Inc. is the distributor of PowerShares
QQQ, BLDRS Funds and PowerShares DB Funds. PowerShares QQQ and
BLDRS Funds are unit investment trusts. Invesco PowerShares and
Invesco Distributors, Inc. are not affiliated with ALPS
Distributors, Inc.
Not FDIC Insured | May Lose Value | No Bank Guarantee
Important Risk Information
There are risks involved with investing in ETFs, including
possible loss of money. Shares are not actively managed and are
subject to risks similar to those of stocks, including those
regarding short selling and margin maintenance requirements.
Ordinary brokerage commissions apply. The Fund's return may not
match the return of the Underlying Index.
Investments in preferred securities carry interest rate risk.
Interest rate risk refers to the risk that bond prices generally
fall as interest rates rise and vice versa.
The Fund's underlying securities may be subject to call risk,
which may result in the Fund having to reinvest the proceeds at
lower interest rates, resulting in a decline in the Fund's
income.
Variable and floating-rate securities may be subject to
liquidity risk, meaning that there may be limitations on the Fund's
ability to sell the securities at any given time. Due to their
variable or floating-rate features, these securities generally will
pay higher levels of income in a rising interest rate environment;
however, there can be no guarantee that a dividend paid by a
floating-rate security will increase as interest rates rise.
If the Fund owns a preferred security that is deferring or
suspending payments of dividends, the Fund may be required to
report the distribution on its tax returns, even though it may not
have received any income.
Moreover, in the event an issuer of preferred securities
experiences economic difficulties, the issuer's preferred
securities may lose substantial value due to the reduced likelihood
that the issuer's board of directors will declare a dividend and
the fact that the preferred securities may be subordinated to other
securities of the same issuer.
Convertible securities are subject to the risks of both debt
securities and equity securities. As with equity securities,
declining common stock values may cause the value of the Fund's
investments to decline. A debt security tends to decrease in value
when interest rates rise. Moreover, many convertible securities are
subject to the same risks as lower rated debt securities.
Hybrid securities potentially are more volatile than traditional
equity securities and may carry credit risk and liquidity risk.
Perpetual subordinated debt typically has lower credit ratings
and lower priority than other obligations of an issuer during
bankruptcy, presenting a greater risk for nonpayment, and
increasing as the priority of the obligation becomes lower.
Foreign securities have additional risks, including
exchange-rate changes, decreased market liquidity, political
instability and taxation by foreign governments.
Investments focused in a particular industry are subject to
greater risk, and are more greatly impacted by market volatility,
than more diversified investments.
The Fund's use of a representative sampling approach will result
in its holding a smaller number of securities than are in the
underlying Index, and may be subject to greater volatility.
The Fund is considered non-diversified and may be subject to
greater risks than a diversified fund.
Investing in securities of small and medium-sized companies may
involve greater risk than is customarily associated with investing
in large companies.
Shares are not individually redeemable and owners of the shares
may acquire those Shares from the Funds and tender those shares for
redemption to the Funds in Creation Unit aggregations only,
typically consisting of 50,000 shares.
Note: Not all products, materials or services available at all
firms.
Trademarks & Other Information
Wells Fargo is the Index Provider for the Fund. The Wells Fargo®
Hybrid and Preferred Securities Floating and Variable Rate Index is
a service mark of Wells Fargo & Company and has been licensed
for use by the Adviser. The Fund is not sponsored, issued or
advised by Wells Fargo & Company, Wells Fargo Securities, LLC
or their subsidiaries and affiliates (collectively, "Wells Fargo")
and Wells Fargo makes no representation regarding the advisability
of investing in the Fund. The Fund is entitled to use the
Underlying Index pursuant to a sub-licensing agreement with the
Adviser.
Invesco Distributors, Inc. is the distributor of the PowerShares
Exchange-Traded Fund Trust II.
PowerShares® is a registered trademark of Invesco PowerShares
Capital Management LLC (Invesco PowerShares). Invesco PowerShares
Capital Management LLC and Invesco Distributors, Inc. are indirect,
wholly owned subsidiaries of Invesco Ltd.
An investor should consider the Fund's investment objective,
risks, charges and expenses carefully before investing. The
prospectus contains this and other information about the Fund. For
this and more complete information about the Fund call 800 983 0903
or visit invescopowershares.com for a prospectus. Please read the
prospectus carefully before investing.
P-VRP-PR-1-E 5227 04/14 x 04/15
Media Contacts: Kristin Sadlon Porter Novelli 212-601-8192 Email
Contact Bill Conboy 303-415-2290 Email Contact
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