PowerShares International Listed Private Equity (PFP): PowerShares Momentum Tracker Examines

Aug. 18, 2008 - PRLog -- In September of 2007, PowerShares debuted their International Listed Private Equity Portfolio (PFP) in what Don Dion, publisher of PowerShares Momentum Tracker (http://www.fidelityadviser.com/readMe_PS.asp), calls an “inhospitable climate.” In the latest issue of PowerShares Momentum Tracker, however, Dion announced that PFP has been moving up his rankings in recent months.

“As the ‘credit crunch’ became the ‘credit crisis,’ private equity firms were some of the first financials to suffer,” Dion noted in his profile of the fund. In 2008, as credit problems have snowballed, PFP has experienced a 20% drop in share price since inception.

In recent weeks, however, PFP has begun creeping back up the PowerShares Momentum Tracker Momentum Table (http://store.fidelityadviser.com/pws1yr.html ), moving from the 65th spot on June 25 to the 54th spot on August 6. PFP’s trend has been upward recently, boosting the fund more than 4% in the last month—helping it outperform the benchmark MSCI EAFE index by 4.20% for the same period. “With its emphasis on several methods of diversification, now may be the time to give PFP a second look,” Dion said.

PFP tracks the International Listed Private Equity Index and invests at least 80% of its total assets in publicly listed companies that invest in or lend capital to privately held companies. PFP’s holdings hail from ten different countries, from South Korea to the U.K., and are selected based on reputation, valuation, management, financial data, historical performance and the need for diversification. http://store.fidelityadviser.com/pws1yr.html  

“Out of all of these criteria, PFHP seems to make the most visible effort in the area of diversification,” Dion noted. PowerShares estimates that the 42 companies that compose PFHP have direct investments in more than 1,000 private global businesses. “The U.K., Australia and France are standard international ETF allocations, and all three have a relatively high correlation with the potential for steady investment returns over time,” Dion added, “but the fund’s inclusion of South Korea and the Netherlands may help to pack a short term punch for investors who are seeking to capture the returns of growing economies without saddling themselves with a label like ‘emerging markets.’”

Does Dion see PFP continuing to grow momentum? (http://store.fidelityadviser.com/pws1yr.html) “The broad definition of PFP’s index composition—“any foreign publicly traded company that invests in private firms—could help to increase the momentum and appeal of the index as credit fears ease,” Dion said. Dion also believes that PFP’s past may not affect its future: “While set backs in private equity have caused PFP’s first months to be rocky, the diversification and scope of the index may position the fund, and a patient investor, to reap the returns of global growth.”

PowerShares Momentum Tracker is a member of Fidelity Independent Adviser’s family of financial publications. With more than 70,000 subscribers in the United States and 29 other countries, Fidelity Independent Adviser publishes four monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers. http://store.fidelityadviser.com/pws1yr.html

Don Dion, publisher of Fidelity Independent Adviser, is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Massachusetts, Dion Money Management manages more than $750 million in assets for clients in 49 states and 11 countries. A licensed attorney in Massachusetts and Maine, Mr. Dion has more than 25 years’ experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management. http://www.dionmm.com/

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