The recent surge in companies buying back their shares has boosted the activity and returns of this buyback exchange-traded fund. The ETF’s top three holdings are: AT&T Inc. (5.12%), Home Depot, Inc. (5.06%) and Oracle Corporation (5.03%).
PowerShares Buyback Achievers (PKW)
from Byrne Investment Research
We are initiating coverage on PowerShares Buyback Achievers (PKW) as a Special Situation.
The PowerShares Buyback Achievers Portfolio (PKW) is based on the NASDAQ U.S. Buyback Achievers Index. The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The NASDAQ U.S. BuyBack Achievers Index is comprised of US securities issued by corporations that have effected a net reduction in shares outstanding of 5% or more in the trailing 12 months. The Fund and the Index are reconstituted annually in January and rebalanced quarterly in January, April, July and October.
Since the fund was opened five years ago, the Nasdaq U.S. Buyback Achievers Index has a return of 26.96%. The PKW stock price has a return of 26.13%, which show how low the expense ratio is on the fund. The S&P 500 has returned 21.16% over the same time frame. PKW has outperformed the S&P 500 by exactly 497 basis points over the last five years, right in line with the studies we conducted for the last 65 years. PKW is a conservative investment with growth potential, a rare combination that should be in every one of our client’s portfolios.
Tom Byrne, Byrne Investment Research, 4025 Sunset Ridge Drive, Canyon Ferry Crossing, Helena, MT 59602, 406-465-4663, May 14, 2014