Invesco PowerShares
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The PowerShares Fundamental High Yield® Corporate Bond Portfolio (PHB) is the first fundamentally weighted fixed-income ETF.
The Fund seeks results that correspond (before fees and expenses) generally to the price and yield performance of the RAFI® High Yield Bond Index. Based on the Fundamental Index® methodology developed by Research Affiliates, LLC, the Index is calculated and maintained by Ryan ALM, Inc.
Fundamental Question
Traditional Approach
Should your exposure to a company's debt automatically increase solely because the company issues more debt? Traditional broad market, cap-weighted indexes say yes.
RAFI Approach
Under the RAFI approach, the weight of a company's debt within the index is linked directly to factors that are indicative of the company's ability to service its debt.
Index Methodology
Issuers held in the RAFI High Yield Bond Index are weighted by a combination of four measures of their fundamental size: sales, cash flow, dividends and book value of assets.
Each bond in the index:
  • Must have a minimum par value amount outstanding of $350 million
  • Must fall within the following Moody's/S&P rating† range:
    Baa/BBB > rating > Caa/CCC
  • Must have greater than one year to maturity
The index is divided into two distinct maturity cells:
  • >1 and <=5 years
  • >5 and <=10 years
The index may not hold more than two issues from any single issuer (one per cell).
Fund Details
Fund SymbolPHB
Expense Ratio0.50%
Index ProviderResearch Affiliates
Index TickerRAFIHY
Rebalance FrequencyMonthly
Distribution FrequencyMonthly
PHB Fund Overview
  • Invests in high-yield corporate bonds that meet specific investment criteria.
  • Provides relatively low cost,1 broad exposure to the high-yield corporate bond market in a single trade.
  • Offers the benefits of the ETF structure including intra-day liquidity2 and transparency.3
  • Offers the potential for monthly income.
† Credit ratings are assigned by Nationally Recognized Statistical Rating Organizations based on assessment of the credit worthiness of the underlying bond issuers. The ratings range from AAA (highest) to D (lowest) and are subject to change.
1 Since ordinary brokerage commissions apply for each buy and sell transaction, frequent trading activity may increase the cost of ETFs.
2 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 100,000 Shares.
3 ETFs disclose their full portfolio holdings daily.
High-yield securities have additional risks, including interest-rate changes, decreased market liquidity and a larger amount of outstanding debt than investment-grade securities.
Foreign securities have additional risks, including exchange-rate changes, decreased market liquidity, political instability and taxation by foreign governments.
The Fund's underlying securities may be subject to call risk, which may result in the Fund having to reinvest the proceeds at lower interest rates, resulting in a decline in the Fund's income.
The Fund may invest in illiquid securities, resulting in a decline of the Fund's returns.
The Fund is considered non-diversified and may be subject to greater risks than a diversified fund.
Fundamental Index®, Research Affiliates®, Fundamental High Yield® and all other Research Affiliates trademarks, trade names, patented and patent-pending concepts are the exclusive property of Research Affiliates, LLC. The RAFI High Yield Bond Index is calculated and maintained by ALM Research Solutions, Inc. (a wholly owned subsidiary of Ryan ALM, Inc.) in conjunction with Research Affiliates LLC and is the exclusive property of Research Affiliates.
©2012 Invesco PowerShares Capital Management LLC
PowerShares® is a registered trademark of Invesco PowerShares Capital Management LLC (Invesco PowerShares). Invesco PowerShares Capital Management LLC and Invesco Distributors, Inc. are indirect, wholly owned subsidiaries of Invesco Ltd.
Invesco Distributors, Inc. is the distributor of the PowerShares Exchange-Traded Fund Trust, the PowerShares Exchange-Traded Fund Trust II, the PowerShares India Exchange-Traded Fund Trust and the PowerShares Actively Managed Exchange-Traded Fund Trust.
Investment products offered are: Not FDIC Insured  • No Bank Guarantee  • May Lose Value
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