Invesco PowerShares to launch multi-strategy alternative ETF
Exchange-traded fund provider Invesco PowerShares Capital Management is to list the PowerShares Multi-Strategy Alternative Portfolio (LALT) on 29 May on the Nasdaq Stock Market.
LALT is an alternative ETF designed to help investors achieve lower portfolio volatility and enhance risk-adjusted returns.
"One of the primary goals for investors that use alternative strategies is to minimise exposure to equity and bond markets, and to achieve better risk-adjusted returns compared to portfolios consisting only of traditional asset classes," says Dan Draper, Invesco PowerShares managing director of global ETFs. "LALT is an actively managed long-short strategy that seeks to provide efficient exposure to a broad mix of alternative-asset classes. Invesco PowerShares is committed to providing innovative tools to help investors achieve their goals of wealth accumulation and capital preservation."
Anticipating an unwinding of historic central bank intervention, the stock and bond markets have greater potential to experience heightened volatility against a backdrop of subpar growth. In such an environment, a multi-strategy alternative solution may be able to help investors navigate through more challenging market environments by reducing the volatility of returns and mitigate drawdowns.
"Morgan Stanley has an established platform of proprietary liquid alternative indices across asset classes," says Nikki Tippins, managing director, head of Americas equity derivatives distribution. "The Morgan Stanley Multi-Strategy Alternative Index is designed to combine such strategies that seek to offer attractive risk-adjusted returns with low correlation to traditional asset classes. We're delighted to provide this benchmark for such an original ETF."
The PowerShares Multi-Strategy Alternative Portfolio (LALT) is an actively managed ETF that seeks a positive total return with low correlation to the broader securities markets. Invesco Advisers, the sub-adviser to the fund, selects investments for inclusion in the fund's portfolio with reference to the components of the Morgan Stanley Multi-Strategy Alternative Index using a quantitative process that seeks to exceed the benchmark's performance.
The benchmark is a proprietary index developed and used by Morgan Stanley's sales and trading division. The benchmark and its components consist of a combination of quantitative, rules-based strategies, some of which have been used for years as benchmarks for products offered to institutional investors. Since the benchmark's underlying strategies draw returns from different risk sources, combining the strategies may result in further diversification and risk reduction.
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