PowerShares ETFs

SPHQ - PowerShares S&P 500 Quality Portfolio

Equity - US Equity

Product Details

The PowerShares S&P 500® Quality Portfolio (Fund) is based on the S&P 500® Quality Index (Index).The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Index tracks the performance of stocks in the S&P 500® Index that have the highest quality score, which is calculated based on three fundamental measures, return on equity, accruals ratio and financial leverage ratio. The Fund and the Index are rebalanced and reconstituted semi-annually on the third Friday of June and December.

Effective at the close of markets on Friday, March 18, 2016, the Funds’ name, investment objective, principal investment strategy and underlying index have changed. Please see the Fund's prospectus for further information.

The rationale for quality

Historically offering lower volatility and higher risk-adjusted returns than low-quality stocks, characteristics of quality stocks include:

  • Strong fundamentals – Quality stocks are typically issued by companies with strong balance sheets and stable earnings growth
  • Added risk mitigation – Quality stocks have historically outperformed lower-quality shares during periods of escalating market volatility. (Similarly, quality stocks can lag during periods of falling market volatility.)
  • Balance sheet focus – Considers often-overlooked balance sheet metrics that can be important drivers of stock returns

Features of SPHQ:

  • Rigorous S&P quality screens – Stocks are selected from the S&P 500 Index according to three researched measures of company quality – return on equity, accruals ratio and financial leverage
  • Quality factor benefits – Potential to outperform across market cycles, including periods of market stress
  • Transparency – Clearly defined and transparent index methodology based on industry-leading S&P 500 Index

Research-based quality screens

SPHQ’s underlying index seeks to identify the highest quality stocks in the S&P 500® Index by screening holdings according to S&P’s “Quality Score.” This score is based on three fundamental measures of quality, which help to assess a company’s potential future profitability, as well as the financial risk each company faces.*

Profitability
  • Measured by return on equity (ROE)
  • ROE determines how much shareholders earned for their investment in the company
  • High ROE implies efficient management of a firm’s equity base
Earnings quality
  • Measured by accruals ratio
  • The accruals ratio factors cash flow into the assessment of a company’s earnings.
  • Cash earnings are viewed as higher quality relative to non-cash (accrual-based) earnings
Financial Risk
  • Measured by financial leverage
  • Financial leverage is the degree to which a company uses debt to finance operations
  • Extensive use of debt can subject a company to interest rate and credit risk, resulting in unstable cash flow and earnings

*Quality: A Distinct Equity Factor?, S&P Down Jones Indices, Daniel Ung, Priscilla Luk, Xiaowei Kang, July 2014.

When market stress increases, quality matters.

SPHQ provides convenient exposure to the quality factor, which can help benefit investors regardless of market conditions.

The quality difference – Rising market volatility

A rising VIX level indicates elevated market volatility. Quality stocks have shown relative outperformance over lower-quality shares during periods of market stress.

S&P 500 Quality Index - S&P 500 Low Quality Ranking Index By VIX Level

Average excess return by Weekly VIX close

Source: Bloomberg, L.P., data as of 7/18/2014 – 2/29/16. The annualized return for the S&P Quality Index was 2.5% and the S&P 500 Index was 0.66% for the date range July 18, 2014 through Feb. 29, 2016. Past performance is no guarantee of future results. An investor cannot invest directly in an index. VIX is the ticker symbol of the CBOE Volatility Index and serves as a barometer of near-term market volatility. Based on option prices, and gauges investors’ estimates of volatility.

The quality difference – Widening credit spreads

Widening credit spreads are another indicator of market stress. Widening spreads can indicate collective investor uncertainty about companies’ ability to service debt – making investments in lower-quality companies more risky.

When credit spreads widen, quality stocks have historically outperformed lower-quality stocks.

S&P 500 Quality Index - S&P 500 Low Quality Ranking Index By High Yield Spread Level Average excess return by Barcap HY - 10 year treasury weekly closing level

Source: Bloomberg, L.P., data as of 7/18/2014 – 2/29/16. The annualized return for the S&P Quality Index was 2.5% and the S&P 500 Index was 0.66% for the date range July 18, 2014 through Feb. 29, 2016. Past performance is no guarantee of future results. An investor cannot invest directly in an index.

SPHQ’s underlying index utilizes a transparent, easy-to-understand selection process. Each security in the S&P 500 Index is assessed for its ability to generate strong earnings through often-overlooked, but critical balance sheet measures that can affect profitability.

Funnel flow graphic
as of 04/30/2016

Morningstar Rating

Overall Rating - ETF Large Blend Category

As of 04/30/2016 the Fund had an overall rating of 4 stars out of 46 funds and was rated 5 stars out of 46 funds, 5 stars out of 37 funds and 2 stars out of 17 funds for the 3-, 5- and 10- year periods, respectively.

Morningstar details

Source: Morningstar Inc. Ratings are based on a risk-adjusted return measure that accounts for variation in a fund's monthly performance (including the effect of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The overall rating is derived from a weighted average of three-, five- and 10-year rating metrics, as applicable. ©2016 Morningstar Inc. All rights reserved. The information contained herein is proprietary to Morningstar and/or its content providers. It may not be copied or distributed and is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance does not guarantee future results. A fund is eligible for a Morningstar Rating three years after inception. The top 10% of funds in a category receive five stars, the next 22.5% four stars, the next 35% three stars, the next 22.5% two stars and the bottom 10% one star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) Ratings for other share classes may differ due to different performance characteristics.

as of 04/30/2016 03/31/2016

Performance

  YTD 1Yr 3Yr 5Yr 10Yr Since Inception
Index History (%)
S&P 500 Quality Index 1.82 0.51 N/A N/A N/A N/A
S&P 500 Index 1.35 1.78 11.82 11.58 7.01 7.10
S&P 500 High Quality Rankings Index 6.30 7.06 14.49 14.34 N/A N/A
S&P 500 Quality Index 2.30 1.34 N/A N/A N/A N/A
S&P 500 Index 1.74 1.21 11.26 11.02 6.91 7.08
S&P 500 High Quality Rankings Index 6.08 7.79 13.50 13.41 N/A N/A
Fund History (%)
Fund NAV 6.36 6.94 14.22 13.99 5.08 5.66
After Tax Held 6.36 6.43 13.71 13.54 4.86 5.44
After Tax Sold 3.60 4.29 11.09 11.21 4.04 4.52
Fund Market Price 6.31 6.93 14.20 13.99 5.08 5.62
Fund NAV 6.83 8.39 13.48 13.21 4.87 5.66
After Tax Held 6.83 7.87 12.98 12.76 4.65 5.44
After Tax Sold 3.87 5.11 10.50 10.55 3.86 4.53
Fund Market Price 6.70 8.43 13.48 13.21 4.86 5.61

Market returns are based on the midpoint of the bid/ask spread at 4 p.m. ET and do not represent the returns an investor would receive if shares were traded at other times. Performance data quoted represents past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than performance data quoted. After-tax returns reflect the highest federal income tax rate but exclude state and local taxes. Fund performance reflects fee waivers, absent which, performance data quoted would have been lower. After Tax Held and After Tax Sold are based on NAV. Returns less than one year are cumulative.


as of 03/31/2016

Growth of $10,000

Data beginning 10 years prior to the ending date of 03/31/2016. Fund performance shown at NAV.

S&P 500 High Quality Rankings Index* performance prior to 6/30/2010 reflects that of the original Underlying Index Value Line Timeliness Select Index. From 6/30/2010, forward, the Index performance reflects that of the Underlying Index S&P 500 High Quality Rankings Index AND IS NOT INTENDED FOR ANY THIRD PARTY USE.

An investor cannot invest directly in an index. The results assume that no cash was added to or assets withdrawn from the Index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.

as of 05/27/2016

Sector Allocation

as of 05/26/2016

Market Cap & Style Allocations

Large-Cap Value 18.60%
Large-Cap Blend 34.38%
Large-Cap Growth 38.77%
Mid-Cap Value 2.97%
Mid-Cap Blend 4.00%
Mid-Cap Growth 1.18%
Small-Cap Value -
Small-Cap Blend 0.08%
Small-Cap Growth -

as of 05/27/2016 Top Holdings | View All

Fund Holdings subject to change

Ticker Company % of Fund
JNJ Johnson & Johnson 5.42
PG Procter & Gamble Co/The 4.45
HD Home Depot Inc/The 4.42
IBM International Business Machines Corp 4.17
GILD Gilead Sciences Inc 4.12
V Visa Inc 3.25
MA MasterCard Inc 3.22
PEP PepsiCo Inc 2.90
MMM 3M Co 2.90
BA Boeing Co/The 2.76

Distributions | View All | Distribution Information

Ex-Date Record Date Pay Date $/
Share
Ordinary Income Short Term Gains Long Term Gains Return of Capital
03/18/2016 03/22/2016 03/31/2016 - - - - -
12/18/2015 12/22/2015 12/31/2015 0.22675 0.22675 - - -
09/18/2015 09/22/2015 09/30/2015 0.11100 0.11100 - - -
06/19/2015 06/23/2015 06/30/2015 0.11986 0.11986 - - -
03/20/2015 03/24/2015 03/31/2015 0.07101 0.07101 - - -
12/19/2014 12/23/2014 12/31/2014 0.12495 0.12495 - - -
09/19/2014 09/23/2014 09/30/2014 0.09480 0.09480 - - -
06/20/2014 06/24/2014 06/30/2014 0.09728 0.09728 - - -
03/21/2014 03/25/2014 03/31/2014 0.06869 0.06869 - - -
12/20/2013 12/24/2013 12/31/2013 0.10653 0.10653 - - -
09/20/2013 09/24/2013 09/30/2013 0.07948 0.07948 - - -
06/21/2013 06/25/2013 06/28/2013 0.10234 0.10234 - - -
03/15/2013 03/19/2013 03/28/2013 0.05915 0.05915 - - -
12/21/2012 12/26/2012 12/31/2012 0.09781 0.09781 - - -
09/21/2012 09/25/2012 09/28/2012 0.07112 0.07112 - - -
06/15/2012 06/19/2012 06/29/2012 0.07951 0.07951 - - -
03/16/2012 03/20/2012 03/30/2012 0.06167 0.06167 - - -
12/16/2011 12/20/2011 12/30/2011 0.06441 0.06441 - - -
09/16/2011 09/20/2011 09/30/2011 0.05889 0.05889 - - -
06/17/2011 06/21/2011 06/30/2011 0.12334 0.12334 - - -
12/17/2010 12/21/2010 12/31/2010 0.07952 0.07952 - - -
06/19/2009 06/23/2009 06/30/2009 0.03349 0.03349 - - -
12/19/2008 12/23/2008 12/31/2008 0.01080 0.01080 - - -

Frequency Distribution of Discounts & Premiums

    Bid/Ask MidPoint Above NAV
Quarter
Ending
Days 0.00-
0.25%
0.26-
0.50%
0.51-
0.99%
1.00-
1.49%
1.50-
1.99%
≥2.00%
03/31/2016 61 36 0 0 0 0 0
12/31/2015 64 41 0 0 0 0 0
09/30/2015 64 42 0 0 0 1 0
06/30/2015 63 37 0 0 0 0 0
Year Ended 2015 252 159 1 0 0 1 0
    Bid/Ask Midpoint Below NAV
Quarter
Ending
Days 0.00-
0.25%
0.26-
0.50%
0.51-
0.99%
1.00-
1.49%
1.50-
1.99%
≥2.00%
03/31/2016 61 25 0 0 0 0 0
12/31/2015 64 23 0 0 0 0 0
09/30/2015 64 21 0 0 0 0 0
06/30/2015 63 26 0 0 0 0 0
Year Ended 2015 252 91 0 0 0 0 0

Fund Inception: 12/06/2005

Shareholders may pay more than net asset value when they buy Fund shares and receive less than net asset value when they sell those shares, because shares are bought and sold at current market prices. Performance data quoted represents past performance, which is not a guarantee of future results.


 Risk & Other Information

Typically, security classifications used in calculating allocation tables are as of the last trading day of the previous month.

There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. The Fund's return may not match the return of the Underlying Index. The Fund is subject to certain other risks. Please see the current prospectus for more information regarding the risk associated with an investment in the Fund.

Investments focused in a particular sector, such as industrials, are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.

The S&P 500® Index is an unmanaged index considered representative of the U.S stock market. The Value Line Timeliness Select Index seeks to identify a group of companies that have the potential to outperform the US equity market. The Index utilizes three core Value Line Ranking Systems: Timeliness, Safety and Technicals.

The Global Industry Classification Standard was developed by and is the exclusive property and a service mark of MSCI, Inc. and Standard & Poor's.

S&P® is a registered trademark of Standard & Poor's Financial Services LLC (S&P) and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones). These trademarks have been licensed for use by S&P Dow Jones Indices LLC. S&P® and Standard & Poor's® are trademarks of S&P and Dow Jones® is a trademark of Dow Jones. These trademarks have been sublicensed for certain purposes by Invesco PowerShares Capital Management LLC (Invesco PowerShares). The Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Invesco PowerShares. The Fund is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates make any representation regarding the advisability of investing in such product(s).

Beta is a measure of risk representing how a security is expected to respond to general market movements. Smart Beta represents an alternative and selection index based methodology that seeks to outperform a benchmark or reduce portfolio risk, or both. Smart beta funds may underperform cap-weighted benchmarks and increase portfolio risk.

as of 05/27/2016
3:59 PM EST

SPHQ
Intraday Stats

  • Last Trade $24.94
  • Current IIV $24.95
  • Change $0.09
  • % Change 0.36%
as of 05/27/2016
  • NAV at market close $24.95
as of 05/27/2016

Fund Yield

  • SEC 30 Day Yield 1.99%
  • 12 Month Distribution Rate 1.83%
  • 30-Day SEC Unsubsidized Yield
    as of 05/26/2016
    1.90%
as of 05/27/2016

Prior Close

  • Closing Price $24.85
  • Bid/Ask Midpoint $24.94
  • Bid/Ask Prem/Disc -$0.01
  • Bid/Ask Prem/Disc -0.04%
as of 03/31/2016

Fund Characteristics

  • Price/Earnings Ratio1 17.88
  • Price/Book Ratio1 5.78
  • ROE2 52.55%
  • Avg Market Cap2 $98,076MM

1 Weighted Harmonic Average

2 Weighted Average

Fund Details

  • Fund Ticker SPHQ
  • CUSIP # 73935X682
  • ISIN US73935X6821
  • Intraday NAV SPHQIV
  • Index Ticker SPXQUT
  • Index Provider S&P Dow Jones Indices LLC
  • Management Fee 0.29%
  • Total Expense Ratio 0.38%
  • Fee Waiver 0.09%
  • Net Expense Ratio 0.29%
  • Marginable Yes
  • Short Selling Yes
  • Options No
  • Exchange NYSE Arca
  • Inception Date 12/06/2005
  • # of Holdings 98
    as of 05/27/2016
as of 05/27/2016

Quick Facts

  • Previous Close $24.85
  • Open $24.86
  • Today's High $24.96
  • Today's Low $24.86
  • Today's Volume 182,909
  • 52 Week High $25.28
  • 52 Week Low $18.67
  • Shares Outstanding 38.95MM
  • Market Value $971.7MM