Invesco Powershares has reportedly launched a UCITS-qualified exchange-traded fund to open up the S&P 500 Index to UK smart beta investors.
The Powershares S&P 500 VEQTOR UCITS ETF is active from 15 June 2015 and provides long-only exposure to the S&P 500 and S&P VIX Short-Term Futures indices, as well as cash positions, tracking the S&P 500 Dynamic VEQTOR Index, reported Portfolio Adviser.
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The fund will shift allocation into cash or cash equivalents if index losses reach 2% over five business days, via the negative correlation of the S&P 500 VIX Short-Term Futures Index against the S&P 500 Index to alleviate the risk between the US equity space and market volatility.
The ETF will usually hold a minimum exposure to the VIX index, but the allocation will reach as high as 40% of the portfolio, in times of increased market volatility.
The fund will be initially available on the London Stock Exchange and Irish Stock Exchange with plans to be floated on the Deutsche Börse Index and Borsa Italiana from 19 June 2015, said the news website.
Invesco PowerShares EMEA head Bryon Lake said: "Capital preservation has become an increasingly important and relevant component of investing.
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By GlobalData"We don’t need to look far back to remember how quickly and unexpectedly market volatility can strike in today’s market environment. Investors are looking for intuitive solutions which allow them to refine their exposure in key markets, like US equities."
