CHICAGO, IL -- (Marketwire) -- 12/04/08 -- Invesco PowerShares Capital Management LLC, a
leading provider of exchange-traded funds (ETFs), today announced that it
expects to pay zero capital gains distributions for 119 of its 120 equity
and fixed-income exchange-traded funds for 2008.
To date, Invesco PowerShares has never made a capital gain distribution to
shareholders of its equity or fixed-income based ETF portfolios. Only one
PowerShares ETF -- PowerShares S&P 500 BuyWrite Portfolio (NYSE: PBP),
which was named "Most Innovative New ETF" in 2007 -- is estimated to
realize a small capital gains distribution (see table below), due largely
in part to the unique underlying index methodology which writes covered
calls on the S&P 500 Index.
"We are very pleased to announce zero capital gains payouts for the year on
all but one of our ETFs," said Bruce Bond, President and CEO of Invesco
PowerShares. "At a time when the financial markets and many funds have lost
significant value over the past year, the last thing investors want is to
be hit with a tax bill. Taxes may be the most critical and overlooked
factor in wealth creation over time, and the ETF continues to prove its
viability as a tax-efficient and transparent investment vehicle."
According to a recent Lipper study, in 2007 mutual funds paid out nearly
$393 billion, or 3% of their market share in capital gains to their
shareholders.(1) That number is expected to increase in 2008 as redemptions
have forced many fund managers to liquidate positions, inherently creating
capital gains. By comparison, PowerShares equity and fixed-income ETFs had
no capital gains distributions in 2007.
The only PowerShares equity ETF expected to pay a capital gain distribution
for 2008 -- PBP -- is unique in the fact that it accounts for its gain or loss
on its investments for federal income tax purposes on a daily mark-to-market basis. Year-to-date (as of 12/01/08), the PowerShares S&P 500
BuyWrite Portfolio had outperformed the S&P 500 Index by over 9%. "We
believe that the recent success of PBP is a testament to the effectiveness
of the underlying index methodology," Bond said. "The premiums shareholders
have collected on the covered call options over the past year show that the
Fund is doing exactly what it has been designed to do."
PBP Standardized Performance (as of 9/30/08)
Since
1 Year 3 Year 5 Year 10 Year Inception*
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PowerShares S&P 500
BuyWrite Portfolio N/A N/A N/A N/A -9.05
S&P 500 Index -21.96 0.22 5.17 3.06 -19.27
* Since inception returns are based on the inception date of the Fund: Dec.
20, 2007.
Past performance is not a guarantee of future results: current performance
may be higher or lower than performance quoted. Investment returns and
principal value will fluctuate and Shares, when redeemed, may be worth more
or less than their original cost.
