The ETF, the first of its kind according to Invesco, will be called the PowerShares Preferred Shares UCITS ETF and will be available in US dollars.
This is the first fund launch since Invesco acquired London-based ETF provider Source and will be managed by senior portfolio manager Jeff Kernagis.
It will trade on the London Stock Exchange and invest in US preferred shares.
Mike Paul, head of Invesco PowerShares (EMEA) said: “Over the years, Source and Invesco PowerShares have both established reputations for innovation. Now that we’ve joined forces, we believe we can drive it forward even more effectively.
Source and Invesco PowerShares join forces
“This fund launch is a good example. It offers clients exposure to a market segment not available through any other European ETF provider, from a manager with 28 years of experience and the support of a team already managing around c$30 billion of assets.”
Paul added: “While this is the first launch of our combined companies, it’s just the tip of the iceberg. There is much more to come, so keep watching this space.”
Nicolas Samaran, head of innovative product development at Invesco PowerShares added: “With interest rates and bond yields at all-time lows, investors have really struggled to generate meaningful income.
“Preferred shares provide yields comparable to high yield bonds, but from securities issued typically by more well-known companies.”
Over the past five years, the ETF’s underlying index, BofAML Diversified Core Plus Fixed Rate Preferred Securities Index, has produced a 6.1% annualised return, like the US high yield market and higher than US investment grade bonds.
The ETF will have an ongoing charge of 0.5% and dividends will be distributed quarterly.
