PowerShares has filed paperwork with the SEC for a “PowerShares Fundamental Emerging Markets Local Debt Portfolio.” The PowerShares Fundamental Emerging Markets Local Debt Portfolio (the “Fund”) seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Citi RAFI Sovereign Emerging Markets Bond Index.
Principal Investment Strategies
The Fund generally will invest at least 80% of its total assets in bonds issued by governments of emerging market countries that comprise the Underlying Index. The Underlying Index measures potential returns of a theoretical portfolio of bonds issued by governments of 14 emerging market countries.
Citigroup Index LLC (“Citigroup” or the “Index Provider”) selects the emerging market countries to include in the Underlying Index based on a country’s rank in four fundamental measures: gross domestic product, population, land area and energy use. Using a proprietary weighting methodology by Research Affiliates (“RAFI”), the Index Provider weights the bonds of each selected country annually in the Underlying Index based on that country’s composite rankings. As of June 30, 2012, the Underlying Index included bonds issued by the national governments of Brazil, Colombia, Chile, the Czech Republic, Hungary, Indonesia, Malaysia, Mexico, Peru, the Philippines, Poland, South Africa, Thailand and Turkey. Strictly in accordance with its existing guidelines and mandated procedures, Citigroup selects bonds from such countries for inclusion in the Underlying Index that have at least one year to maturity and whose national government has a minimum domestic sovereign debt rating of “C” by either Standard & Poor’s (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”).
The Fund does not purchase all of the securities in the Underlying Index; instead, the Fund utilizes a “sampling” methodology to seek to achieve its investment objective.
For the complete filing click: HERE