Invesco PowerShares Lists First-of-Its-Kind ETF Referencing the
Morgan Stanley Multi-Strategy Alternative Index
CHICAGO, IL--(Marketwired - May 29, 2014) - Invesco PowerShares
Capital Management LLC, a leading global provider of
exchange-traded funds (ETFs), today announced the listing of the
PowerShares Multi-Strategy Alternative Portfolio (LALT) on The
NASDAQ Stock Market, LLC. LALT is an alternative strategy that is
designed to offer investors attractive risk-adjusted returns with
low correlation to traditional asset classes.
"In the current market environment, many investors are concerned
about the potential effects of inflation, market volatility and
correlation of assets on their portfolios," said Andrew
Schlossberg, Invesco Managing Director and Head of US Retail
Distribution and Global ETFs. "Invesco has managed alternative
assets in multiple formats for over 30 years, so we are uniquely
positioned to offer an institutional caliber, time-tested strategy
in a transparent and liquid vehicle.1, 2"
The PowerShares LALT strategy is designed to help investors
reach their portfolio objectives by reducing the volatility of
returns and mitigating the risk of drawdowns. To accomplish this,
the Fund employs a long-short strategy that seeks to provide a
positive total return with low correlation to the broader
securities markets through a cost efficient vehicle.2 Invesco
Advisers, Inc., the sub-adviser to the Fund, selects investments
for inclusion in the Fund's portfolio with reference to the
components of the Morgan Stanley Multi-Strategy Alternative Index
(the "Benchmark") using a quantitative process that seeks to exceed
the Benchmark's performance, and delivers the strategy through a
transparent and liquid vehicle.
"We are excited to partner with Invesco PowerShares to offer
this innovative benchmark to the exchange traded market," said
Nikki Tippins, Head of Equity Derivatives Distribution for the
Americas at Morgan Stanley. "We see increasing client interest
in liquid alternatives solutions, and this vehicle gives investors
a new opportunity to access Morgan Stanley's established
proprietary index platform."
The Benchmark is a proprietary index developed and used by
Morgan Stanley's Sales & Trading Division. The Benchmark and
its components consist of a combination of quantitative,
rules-based strategies, some of which have been used for years as
benchmarks for products offered to institutional investors. Since
the Benchmark's underlying strategies draw returns from different
risk sources, combining the strategies may result in further
diversification and risk reduction.
To learn more about the PowerShares Multi-Strategy Alternative
Portfolio (LALT), please visit
www.PowerShares.com/portal/site/us/investors/etfs/featured-funds/LALT.
1 Invesco's tenure of managing alternative assets includes
the following registered investment advisors: Invesco Advisors,
Inc.; Invesco Private Capital, Inc.; Invesco Senior Secured
Management, Inc., WL Ross & Co. LLC; Invesco Asset Management
Ltd.
2 Since ordinary brokerage commissions apply for each buy
and sell transaction, frequent trading activity may increase the
cost of ETFs. ETFs disclose their full portfolio holdings daily.
Shares are not individually redeemable and owners of the shares may
acquire those shares from the Fund and tender those shares for
redemption to the Fund in Creation Unit aggregations only,
typically consisting of 50,000 shares.
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
April 30, 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
Alternative strategies typically are subject to increased risk
and loss of principal.
Consequently, investments such as exchange-traded funds which
focus on alternative strategies are not suitable for all
investors.
There are risks involved with investing in ETFs, including
possible loss of money.
Index-based ETFs are not actively managed. Actively managed ETFs
do not necessarily seek to replicate the performance of a specified
index. Both index-based and actively managed ETFs are subject to
risks similar to stocks, including those related to short selling
and margin maintenance. Ordinary brokerage commissions apply.
The Fund is subject to management risk because it is an actively
managed portfolio.
The investment techniques and risk analysis used by the
portfolio managers may not produce the desired results.
The Sub-Adviser uses a rules-based methodology to allocate the
Fund's assets in a combination of investment strategies designed to
limit the Fund's risk and volatility. As market dynamics shift over
time, these various investment strategies -- as well as the
rules-based methodology that the Sub-Adviser employs to allocate
Fund assets among them -- may become outdated or inaccurate. As a
result, the Fund may suffer significant losses.
The Fund will enter in futures contracts. Because futures
contracts project price levels in the future, market circumstances
may cause a discrepancy between the price of the near and distant
contract. In the event of adverse price movements, the Fund would
be required to make daily cash payments to maintain its required
margin. The Fund also must segregate liquid assets or enter into
off-setting positions to "cover" open positions in futures
contracts. By investing in futures contracts, the Fund also is
subject to capacity constraints and liquidity risks.
Certain derivative instruments that involve counterparties
subject the Fund to the risk that the counterparty could default on
its obligations under the agreement, either through the
counterparty's bankruptcy or failure to perform its obligations. In
the event of default, the Fund could experience lengthy delays in
recovering some or all of its assets or no recovery at all. The
Fund's investments in the futures markets also introduce the risk
that its futures commission merchant (FCM) would default on an
obligation set forth in an agreement between the Fund and the FCM,
including the FCM's obligation to return margin posted in
connection with the Fund's futures contracts.
The Fund will invest in derivatives and other instruments that
may be less liquid than other types of investments. Illiquid
investments can be more difficult or more costly to buy, or to
sell, compared to other more liquid or active investments, and
could have a negative effect on the Fund's ability to achieve its
investment objective, resulting in losses to Fund shareholders.
The Fund may invest in foreign currency forward contracts, which
may expose the Fund to foreign exchange risk. The factors of supply
and demand in the international markets are influenced by factors
such as macroeconomic, governmental policy, speculative factors,
market sentiment and other political and economic considerations,
and may affect the value of the assets of the Fund.
Some Benchmark Strategies attempt to hedge out broader exposure
to their respective asset classes by short positions in futures,
forwards, individual stocks, or other securities. These hedges may
not always be effective, can result in unexpected exposures and
potential losses, and may act to magnify losses.
While the Benchmark Strategies are designed to exhibit low
correlation to each other and to the broader securities markets,
there are no assurances that this low correlation will continue in
the future.
Short sales are speculative transactions and involve special
risks, including a greater reliance on the Sub-Adviser's ability to
accurately anticipate the future value of a security.
The Fund's exposure to derivatives and other investment
techniques, such as short sales, can create a leveraging effect on
the portfolio. This leverage will vary over time and may at times
be significant, subjecting the Fund to certain risks causing the
Fund to be more volatile and may result in the loss of a
substantial amount of the Fund's assets. The Fund may have a
substantial cash position due to margin and collateral requirements
that may limit the Fund's ability to take advantage of other
investment opportunities, and the Fund also may have to sell or
liquidate a portion of its assets at inopportune times to satisfy
these requirements. This may negatively affect the Fund's ability
to achieve its investment objective. In addition, the Fund's assets
that are used as collateral to secure these transactions may
decrease in value while the positions are outstanding, which may
force the Fund to use its other assets to increase collateral.
The Fund may invest in US government obligations issued or
guaranteed by the US Government, its agencies and
instrumentalities, including bills, notes and bonds issued by the
US Treasury.
Money market funds are subject to management fees and other
expenses, and investments in money market funds will cause the Fund
to bear proportionately the costs incurred by the money market
funds' operations. It is possible for the Fund to lose money by
investing in money market funds.
Investments in fixed-income securities, such as notes and bonds,
carry interest rate and credit risk. Interest rate risk refers to
the risk that bond prices generally fall as interest rates rise and
vice versa. Credit risk is the risk of loss on an investment due to
the deterioration of an issuer's financial health.
During periods of reduced market liquidity or in the absence of
readily available market quotations for the holdings of the Fund,
the ability of the Fund to value its holdings becomes more
difficult and the judgment of the Sub-Adviser may play a greater
role in the valuation of the Fund's holdings due to reduced
availability of reliable objective pricing data.
Equity risk is the risk that the value of equity securities,
including common stocks, may fall due to both changes in general
economic and political conditions that impact the market as a
whole, as well as factors that directly relate to a specific
company or its industry.
Because the Fund may invest in other investment companies, it is
subject to the risks associated with that investment company and
its investment performance may depend on the underlying investment
company's performance. The Fund will indirectly pay a proportional
share of the investment company's fees and expenses, while
continuing to pay its own management fee to the Adviser, resulting
in shareholders absorbing duplicate levels of fees.
The Fund currently intends to effect creations and redemptions
principally for cash, rather than principally in-kind because of
the nature of the Fund's investments. As such, investments in the
Fund may be less tax efficient than investments in ETFs that create
and redeem in-kind.
The Fund generally will seek to invest in derivative instruments
that it believes generates qualifying income. The Fund will seek to
limit its non-qualifying income so as to qualify as a RIC. For the
Fund to qualify as a RIC, the Fund must meet a qualifying income
test each taxable year. Failure to comply with the qualifying
income requirements would have significant negative tax
consequences to Fund shareholders, including the imposition of a
higher tax rate on the Fund and taxes on its distributions to
shareholders.
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.
The Fund's investments in futures contracts will cause it to be
deemed to be a commodity pool, thereby subjecting the Fund to
regulation under the Commodity Exchange Act and Commodity Futures
Trading Commission (CFTC) rules. The Adviser is registered as a
Commodity Pool Operator (CPO), and the Fund will be operated in
accordance with CFTC rules, as well as the rules that apply to
registered investment companies. Registration as a CPO imposes
compliance obligations related to additional laws, regulations and
enforcement policies, which could increase compliance costs and may
affect the operations and financial performance of funds whose
adviser is required to register as a CPO.
Shares are not individually redeemable and owners of the shares
may acquire those shares from the Fund and tender those shares for
redemption to the Fund in Creation Unit aggregations only,
typically consisting of 50,000 shares.
The Morgan Stanley Multi-Strategy Alternative Index is a
quantitative, rules-based Index consisting of five long, short and
market-neutral (long/short) strategies which aim to capture
alternative risk premia across equities, interest rates, currencies
and volatility markets. Each of the five strategies is available as
a standalone, rules-based index which had been created by Morgan
Stanley & Co. LLC (the Benchmark Agent) and has a live history.
The Multi-Strategy Alternative Index uses a risk-weighted framework
by allocating to each strategy a weighting which is proportionate
to the inverse of its 1-year trailing volatility. The weightings
are rebalanced quarterly.
The Morgan Stanley Multi-Strategy Alternative Index (the
"Index") and Morgan Stanley (the "Marks") are the exclusive
property of Morgan Stanley & Co. LLC ("Morgan Stanley"), which
has contracted with Invesco PowerShares Capital Management LLC to
license certain exclusive rights to use and refer to Indexes and
Marks. The PowerShares Multi-Strategy Alternative Portfolio is not
sponsored, endorsed, sold or promoted by Morgan Stanley or its
affiliates. Morgan Stanley and its affiliates make no
representation or warranty, express or implied, regarding the
advisability of investing in securities generally or in the
PowerShares Multi-Strategy Alternative Portfolio particularly or
the ability of the Morgan Stanley Multi-Strategy Alternative Index
to track general market performance. Neither Morgan Stanley nor its
affiliates are responsible for and have not participated in the
determination of the prices and amount of the PowerShares
Multi-Strategy Alternative Portfolio or the timing of the issuance
or sale of the PowerShares Multi-Strategy Alternative Portfolio or
in the determination or calculation of the equation by which the
PowerShares Multi-Strategy Alternative Portfolio is to be converted
into cash. Neither Morgan Stanley nor its affiliates shall have any
liability, direct or indirect, for the PowerShares Multi-Strategy
Alternative Portfolio, Marks and/or the Index, including any errors
or omissions in the calculation thereof.
PowerShares® is a registered trademark of Invesco PowerShares
Capital Management LLC (Invesco PowerShares). Invesco PowerShares,
Invesco Advisers, Inc. and Invesco Distributors, Inc. are indirect,
wholly owned subsidiaries of Invesco Ltd.
Invesco Distributors, Inc. is the distributor of the PowerShares
Actively Managed Exchange-Traded Fund Trust. Invesco Advisers, Inc.
is an investment adviser. It provides investment advisory services
and does not sell securities.
Note: Not all products available through all firms.
An investor should consider the Fund's investment objective,
risks, charges and expenses carefully before investing. 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-LALT-PR-2-E 6917 0514 x 0515
Media Contacts: Kristin Sadlon Porter Novelli 212-601-8192 Email
Contact Bill Conboy 303-415-2290 Email Contact
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