PowerShares Fundamental Investment Grade Bond ETF Launched

PowerShares Fundamental Investment Grade Corporate Bond Portfolio (PFIG) began trading September 15.  Based on the RAFI Investment Grade Bond Index, the fund will weight holdings by the issuer’s ability to service debt instead of the usual market cap method. The Research Affiliates’ Fundamental Index (“RAFI”) methodology looks at four measures of company size: book value, sales, dividends, and cash flow.  The goal is to sever the link between weight, price, and indebtedness.  RAFI believes this overcomes some of the problems of cap-weighted indexes that place greater emphasis on firms issuing the most debt. PFIG has just 31 holdings (complete list of holdings) with an anticipated yield of 2.5%, a modified duration of 4.9 years, and an expense ratio of 0.22%.  . . . → Read More: PowerShares Fundamental Investment Grade Bond ETF Launched