US equities remain favorites with many investors in 2014, particularly after last year’s remarkable performance that saw the S&P 500 surge by more than 30 percent year-on-year. Small cap stocks even performed better, triggering a spurt in cash flows in ETFs focused on the US economy. In fact, data compiled by research agencies showed more than $117 billion flowed into US equity funds in 2013, underling the renewed investor confidence in the world’s largest economy.
With such heavy investor interest, many ETF issuers have launched new products targeting the US market in recent months. Some of these have a few novel features that set them apart in the crowded US equity space.
In particular, the latest addition from Illinois-based Invesco PowerShares offers an interesting alternative to investors wishing to play the broader US market since it focuses on both large- and small cap US companies. The PowerShare Century Portfolio ETF (NYCC), launched in collaboration with NYSE Euronext – an exchange operator and index provider, is the first fund to be based on the NYSE Century Index.
Unveiled in 2012, The NYSE Century Index is constituted of American companies that were incorporated at least 100 years ago, still remains listed in the US and have a market capitalization of at least $1 billion.
The selection criteria results in exposure to some of the largest and oldest public companies across 10 sectors in the country. Companies with a market capitalization of $5 billion or less get the maximum allocation (44 percent) while about 30 percent of constituents are large cap companies. About 10 percent of the constituents are valued at $50 billion or more and includes household names such as JP Morgan, General Electric, PepsiCo, Chevron, Exxon Mobil, Wells Fargo and AT&T.
The underlying index comprises of about 375 companies, meaning there is a pretty large collection of century-old firms out there. Sector-wise, financials get the largest weighting at 23.35 percent, followed by industrials (19.91 percent), utilities (11.57 percent), consumer staples (11.31 percent) and consumer discretionary (10.93 percent). Materials, healthcare, energy, information technology and telecommunication services all receive less than 10-percent allocation. The index is equal-weighted and is rebalanced annually.
NYCC has an expense ratio of 0.5 percent.
Disclosure: No holdings
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Comments 2
Ulli
Great Work
Why is XLP still in “Hold” when you said you sold on 1/30/14?
Rudy
Rudy,
It is just a matter of which table you look at as it shows different data. The first table shows the position of a fund relative to its own trend line, which was broken ins the case of XLP. The second table tracks the trailing sell stop, which was not yet triggered. Personally, I sell once the trend line break occurs, but there is nothing wrong with waiting until the actual sell stop gets triggered. It all depends on your personal risk tolerance.
Ulli…