PowerShares ETFs

BKLN - PowerShares Senior Loan Portfolio

Alternative - Bank Loans

Product details

The PowerShares Senior Loan Portfolio (Fund) is based on the S&P/LSTA U.S. Leveraged Loan 100 Index (Index). The Fund will normally invest at least 80% of its total assets in the component securities that comprise the Index. The Index is designed to track the market-weighted performance of the largest institutional leveraged loans based on market weightings, spreads and interest payments. The Fund and the Index are rebalanced and reconstituted bi-annually, in June and December.

The PowerShares Senior Loan Portfolio tracks the S&P/LSTA U.S. Leveraged Loan 100 Index – providing fixed-income investors with attractive yield potential, while mitigating the risks of rising interest rates.

Floating rate loans offer attractive current income potential

The PowerShares Senior Loan Portfolio tracks the S&P/LSTA U.S. Leverage Loan Index, comprising the 100 largest bank loans with floating rate coupons. Unlike fixed-rate instruments, the coupons of floating rate bank loans adjust upward as interest rates rise – providing investors with the potential of an attractive source of current income.

With their floating rate coupons and low durations, senior loans may offer compelling yield potential.

Source: Bloomberg, L.P., as of March 31, 2015. Senior loans are measured by the S&P/LSTA Leveraged Loan 100 Index. 10-Yr Treasury are measured by the US Generic Government 10 Year Treasury. I.G. Corporate Bonds, High Yield Bonds and TIPS are measured by the BofA ML U.S. Corporate Index, US High Yield Index and All-Maturity U.S. Inflation-Linked Government Index, respectively. Past performance does not guarantee future results. An investor cannot invest directly in an index. Corporate bonds may offer a higher yield than government bonds but are often considered riskier because they're not issued by the government. The interest of these bonds is taxable. Unlike bonds, senior secured loans are secured by collateral, but are typically made to below investment-grade companies. The risk of default may be higher when compared to loans or bonds issued for investment-grade companies, but senior secured loans typically have a lower risk when compared to noninvestment-grade or high yield bonds. Treasuries are backed by the full faith and credit of the US government as to the timely payment of principal and interest, while legislative or economic conditions could affect a municipal securities issuer’s ability to make payments of principal or interest. Treasury Inflation Protection Securities' (TIPS) coupon payments and underlying principal are automatically increased to compensate for inflation by tracking the consumer price index (CPI). While the real rate of return is guaranteed, TIPS tend to offer a low return. Because the return of TIPS is linked to inflation, TIPS may significantly underperform versus conventional U.S. Treasuries in times of low inflation.

  • Floating rates are interest rates that are allowed to move up and down with the rest of the market or with an index.
  • Duration, which measures the price sensitivity of a fixed income investment to interest rate changes, is the number of years it will take a bond’s cash flow to repay an investor the bond’s purchase price.
  • Modified duration measures the rate of change of price with respect to yield.
  • US Generic Government 10 Year Treasury is the on the run 10 Year Treasury Security.
  • BofA Merrill Lynch US High Yield Index tracks the performance of US dollar-denominated, below-investment-grade corporate debt publicly issued in the US domestic market.
  • BofA Merrill Lynch US Inflation-Linked Treasury Index tracks the performance of US dollar denominated inflation linked sovereign debt publicly issued by the US government in its domestic market.
  • The BofA Merrill Lynch US Corporate Index tracks the performance of US dollar denominated investment grade corporate debt publicly issued in the US domestic market.

 

Secured bank loans are senior to other claims

The PowerShares Senior Loan Portfolio’s underlying index is considered a barometer of the US leveraged loan market, and includes some of the largest loan facilities in this space. The senior and secured status of these US dollar-denominated loans means they are given higher claim priority than subordinated debt and preferred stock, while generally exhibiting low correlation to other segments of the fixed-income universe.

The higher claim status of senior loans has typically resulted in higher recovery rates in the event of a default.

Source: Moody’s Annual Default Study, February 2014
*Includes senior subordinated and junior subordinated bonds

  • The value of the collateral securing a loan may not be sufficient to cover the amount owed, may be found invalid or may be used to pay other outstanding obligations of the borrower under applicable law. There is also the risk that the collateral may be difficult to liquidate, or that a majority of the collateral may be illiquid.
  • Correlation is the degree to which two investments have historically moved in relation to each other.

 

Floating rates mean less interest rate sensitivity

The index underlying the PowerShares Senior Loan Portfolio features bank loans with floating rate coupons. Floating rate coupons are locked only until the next rate reset date – typically quarterly. When interest rates rise, so do the coupons, with some floating rate coupons subject to floors, or lower boundaries. The lower duration of senior loans has typically exposed investors to less overall price volatility than high yield bonds.

Floating rate loans has typically been less sensitive to changes in interest rates than high yield bonds.

Source: Bloomberg L.P., April 30, 2013 through Dec. 31, 2013.
Most senior loans are made to corporations with below investment-grade credit ratings and are subject to significant credit, valuation and liquidity risk.

  • Floating rates are interest rates that are allowed to move up and down with the rest of the market or with an index.
  • Volatility measures the amount of fluctuation in the price of a security or portfolio over time.
  • Duration, which measures the price sensitivity of a fixed income investment to interest rate changes, is the number of years it will take a bond’s cash flow to repay an investor the bond’s purchase price.
  • 10 Year Treasury is the current, as of Dec. 31, 2013, on the run 10 Year Treasury security.
  • BofA Merrill Lynch US High Yield Index tracks the performance of US dollar-denominated, below-investment-grade corporate debt publicly issued in the US domestic market.

 

as of 05/31/2016 03/31/2016

Performance

  YTD 1Yr 3Yr 5Yr 10Yr Since Inception
Index History (%)
S&P/LSTA U.S. Leveraged Loan 100 Index 2.49 -2.14 1.16 2.78 N/A 2.74
Barclays U.S. Aggregate Index 3.03 1.96 2.50 3.78 4.90 3.86
S&P/LSTA U.S. Leveraged Loan 100 Index 5.52 -0.02 1.91 3.36 N/A 3.23
Barclays U.S. Aggregate Index 3.45 2.99 2.91 3.33 4.97 3.82
Fund History (%)
Fund NAV 2.05 -2.22 0.69 2.42 N/A 2.40
After Tax Held 1.55 -3.95 -1.07 0.66 N/A 0.66
After Tax Sold 1.15 -1.26 -0.26 1.12 N/A 1.12
Fund Market Price 2.55 -1.74 0.76 2.33 N/A 2.36
Fund NAV 4.79 -0.16 1.37 2.85 N/A 2.84
After Tax Held 3.90 -2.02 -0.41 1.05 N/A 1.09
After Tax Sold 2.69 -0.12 0.24 1.42 N/A 1.43
Fund Market Price 4.98 -0.20 1.36 2.76 N/A 2.74

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 Fund inception and ending 03/31/2016. Fund performance shown at NAV.

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.

Quality Allocations as of 06/27/2016

S&P Moody's
BBB : 19% Baa : 5%
BB : 42% Ba : 51%
B : 28% B : 34%
CCC : 6% Caa : 3%
Not Rated : 6% Not Rated : 7%

Credit rating quality allocations data applies to securities only — not money market instruments.

as of 06/27/2016 Maturity

Years % of Fund
0 - 1 years 5.28
1 - 5 years 53.81
5 - 10 years 40.91
10 - 15 years 0.00
15 - 20 years 0.00
20 - 25 years 0.00
25 years and over 0.00
as of 06/27/2016

Asset Type Allocation

as of 06/27/2016Top Fixed-Income Holdings | View All

Holding Name Coupon Rate Maturity Date S&P / Moody's Rating† Weight
Avago Technologies Cayman Finance 02/01/23 4.25% 02/01/2023 BBB/Ba1 2.12%
1011778 BC ULC FRN 12/10/2021 3.75% 12/10/2021 B+/Ba3 1.99%
Texas Competitive Electric Hldgs Co. 4.93% 10/10/2017 NR/NR 1.98%
ENERGY FUTURE INTERMEDIATE 4.25% 12/19/2016 BB/Ba3 1.97%
PETSMART INC FRN 3/11/2022 4.25% 03/11/2022 BB-/Ba3 1.94%
Fortescue Metal 06/30/2019 4.25% 06/30/2019 BB+/Ba2 1.93%
HILTON WORLDWID FRN 10/26/20 3.50% 10/26/2020 BBB/Ba1 1.91%
AVAGO TECHNOLOG 02/01/21 2.19% 02/01/2021 BBB/Ba1 1.82%
VALEANT PHARMA FRN 04/01/22 5.00% 04/01/2022 BB-/Ba2 1.76%
CSC Holdings, LLC 10/09/22 5.00% 10/09/2022 BB-/Ba1 1.75%

Holdings are subject to change and are not buy/sell recommendations.

Distributions | View All | Distribution Information

Ex-Date Record Date Pay Date $/
Share
Ordinary Income Short Term Gains Long Term Gains Return of Capital
06/15/2016 06/17/2016 06/30/2016 0.09500 0.09500 - - -
05/13/2016 05/17/2016 05/31/2016 0.09500 0.09500 - - -
04/15/2016 04/19/2016 04/29/2016 0.09000 0.09000 - - -
03/15/2016 03/17/2016 03/31/2016 0.08600 0.08600 - - -
02/12/2016 02/17/2016 02/29/2016 0.08400 0.08400 - - -
01/15/2016 01/20/2016 01/29/2016 0.08350 0.08350 - - -
12/15/2015 12/17/2015 12/31/2015 0.08248 0.08248 - - -
11/13/2015 11/17/2015 11/30/2015 0.08081 0.08081 - - -
10/15/2015 10/19/2015 10/30/2015 0.08027 0.08027 - - -
09/15/2015 09/17/2015 09/30/2015 0.07964 0.07964 - - -
08/14/2015 08/18/2015 08/31/2015 0.07852 0.07852 - - -
07/15/2015 07/17/2015 07/31/2015 0.07624 0.07624 - - -
06/15/2015 06/17/2015 06/30/2015 0.07537 0.07537 - - -
05/15/2015 05/19/2015 05/29/2015 0.07440 0.07440 - - -
04/15/2015 04/17/2015 04/30/2015 0.07346 0.07346 - - -
03/13/2015 03/17/2015 03/31/2015 0.07304 0.07304 - - -
02/13/2015 02/18/2015 02/27/2015 0.07389 0.07389 - - -
01/15/2015 01/20/2015 01/30/2015 0.07500 0.07500 - - -
12/15/2014 12/17/2014 12/31/2014 0.07600 0.07600 - - -
11/14/2014 11/18/2014 11/28/2014 0.08000 0.08000 - - -
10/15/2014 10/17/2014 10/31/2014 0.08928 0.08928 - - -
09/15/2014 09/17/2014 09/30/2014 0.08569 0.08569 - - -
08/15/2014 08/19/2014 08/29/2014 0.08380 0.08380 - - -
07/15/2014 07/17/2014 07/31/2014 0.08224 0.08224 - - -
06/13/2014 06/17/2014 06/30/2014 0.08116 0.08116 - - -
05/15/2014 05/19/2014 05/30/2014 0.08102 0.08102 - - -
04/15/2014 04/17/2014 04/30/2014 0.08025 0.08025 - - -
03/14/2014 03/18/2014 03/31/2014 0.08259 0.08259 - - -
02/14/2014 02/19/2014 02/28/2014 0.08348 0.08348 - - -
01/15/2014 01/17/2014 01/31/2014 0.08409 0.08409 - - -
12/13/2013 12/17/2013 12/31/2013 0.08406 0.08406 - - -
11/15/2013 11/19/2013 11/29/2013 0.08434 0.08434 - - -
10/15/2013 10/17/2013 10/31/2013 0.08300 0.08300 - - -
09/13/2013 09/17/2013 09/30/2013 0.08300 0.08300 - - -
08/15/2013 08/19/2013 08/30/2013 0.09000 0.09000 - - -
07/15/2013 07/17/2013 07/31/2013 0.09050 0.09050 - - -
06/14/2013 06/18/2013 06/28/2013 0.09012 0.09012 - - -
05/15/2013 05/17/2013 05/31/2013 0.09213 0.09213 - - -
04/15/2013 04/17/2013 04/30/2013 0.09536 0.09536 - - -
03/15/2013 03/19/2013 03/28/2013 0.09570 0.09570 - - -
02/15/2013 02/20/2013 02/28/2013 0.10025 0.10025 - - -
01/15/2013 01/17/2013 01/31/2013 0.10642 0.10642 - - -
12/14/2012 12/18/2012 12/31/2012 0.09750 0.09750 - - -
11/15/2012 11/19/2012 11/30/2012 0.10027 0.10027 - - -
10/15/2012 10/17/2012 10/31/2012 0.10307 0.10307 - - -
09/14/2012 09/18/2012 09/28/2012 0.09115 0.09115 - - -
08/15/2012 08/17/2012 08/31/2012 0.09103 0.09103 - - -
07/13/2012 07/17/2012 07/31/2012 0.10412 0.10412 - - -
06/15/2012 06/19/2012 06/29/2012 0.09983 0.09983 - - -
05/15/2012 05/17/2012 05/31/2012 0.10476 0.10476 - - -
04/13/2012 04/17/2012 04/30/2012 0.10697 0.10697 - - -
03/15/2012 03/19/2012 03/30/2012 0.10100 0.10100 - - -
02/15/2012 02/17/2012 02/29/2012 0.10120 0.10120 - - -
01/13/2012 01/18/2012 01/31/2012 0.09984 0.09984 - - -
12/15/2011 12/19/2011 12/30/2011 0.11592 0.11592 - - -
11/15/2011 11/17/2011 11/30/2011 0.10292 0.10292 - - -
10/14/2011 10/18/2011 10/31/2011 0.11557 0.11557 - - -
09/15/2011 09/19/2011 09/30/2011 0.08600 0.08600 - - -
08/15/2011 08/17/2011 08/31/2011 0.08317 0.08317 - - -
07/15/2011 07/19/2011 07/29/2011 0.07568 0.07568 - - -
06/15/2011 06/17/2011 06/30/2011 0.07726 0.07726 - - -
05/13/2011 05/17/2011 05/31/2011 0.07600 0.07600 - - -
04/15/2011 04/19/2011 04/29/2011 0.07357 0.07357 - - -

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 13 10 0 0 0 0
12/31/2015 64 15 7 0 0 0 0
09/30/2015 64 12 1 0 0 0 0
06/30/2015 63 20 0 0 0 0 0
Year Ended 2015 252 58 11 0 0 0 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 16 16 6 0 0 0
12/31/2015 64 24 13 5 0 0 0
09/30/2015 64 30 19 2 0 0 0
06/30/2015 63 36 7 0 0 0 0
Year Ended 2015 252 116 59 8 0 0 0

Fund Inception: 03/03/2011

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

† Credit ratings are assigned by Nationally Recognized Statistical Rating Organizations based on assessment of the credit worthiness of the underlying bond issuers. The ratings range from AAA (highest) to D (lowest) and are subject to change. Not rated indicates the debtor was not rated, and should not be interpreted as indicating low quality. Futures and other derivatives are not eligible for assigned credit ratings by any NRSRO and are excluded from quality allocations. For more information on rating methodologies, please visit the following NRSRO websites: standardandpoors.com and select "Understanding Ratings" under Rating Resources and moodys.com and select "Rating Methodologies" under Research and Ratings.

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.

Most senior loans are made to corporations with below investment-grade credit ratings and are subject to significant credit, valuation and liquidity risk. The value of the collateral securing a loan may not be sufficient to cover the amount owed, may be found invalid or may be used to pay other outstanding obligations of the borrower under applicable law. There is also the risk that the collateral may be difficult to liquidate, or that a majority of the collateral may be illiquid.

Fixed-income investments are subject to credit risk of the issuer and the effects of changing interest rates. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. An issuer may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating. Junk bonds involve a greater risk of default or price changes due to changes in the issuer’s credit quality. The values of junk bonds fluctuate more than those of high quality bonds and can decline significantly over short time periods. Due to anticipated Federal Reserve Board policy changes, there is a risk that interest rates will rise in the near future.

The Fund is non-diversified and may experience greater volatility than a more diversified investment.

The Fund’s use of a representative sampling approach will result in its holding a smaller number of bonds than are in the underlying Index, and may be subject to greater volatility.

The Fund may hold illiquid securities that it may be unable to sell at the preferred time or price and could lose its entire investment in such securities.

Under a participation in senior loans, the fund generally will have rights that are more limited than those of lenders or of persons who acquire a senior loan by assignment. In a participation, the fund assumes the credit risk of the lender selling the participation in addition to the credit risk of the borrower. In the event of the insolvency of the lender selling the participation, the fund may be treated as a general creditor of the lender and may not have a senior claim to the lender's interest in the senior loan. Certain participations in senior loans are illiquid and difficult to value.

The Fund currently intends to effect creations and redemptions principally for cash, rather than principally in-kind because of the nature of the Fund's investments. As such, investments in the Fund may be less tax efficient than investments in ETFs that create and redeem in-kind.

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

The Barclays U.S. Aggregate Index is an unmanaged index considered representative of the US investment-grade, fixed-rate bond market.

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).

as of 06/27/2016
4:00 PM EST

BKLN
Intraday Stats

  • Last Trade $22.70
  • Current IIV $22.77
  • Change -$0.11
  • % Change -0.48%
as of 06/27/2016
  • NAV at market close $22.76
as of 06/27/2016

Fund Yield

  • SEC 30 Day Yield 6.08%
  • Distribution Rate 5.01%
  • 12 Month Distribution Rate 4.43%
  • 30-Day SEC Unsubsidized Yield
    as of 06/27/2016
    6.06%
as of 06/27/2016

Prior Close

  • Closing Price $22.81
  • Bid/Ask Midpoint $22.70
  • Bid/Ask Prem/Disc -$0.06
  • Bid/Ask Prem/Disc -0.26%
as of 06/24/2016

Fund Characteristics*

  • Yield to Maturity 5.42%
  • Weighted Avg Maturity 4.38
  • Weighted Avg Coupon 4.85%
  • Days To Reset 22.14
as of 06/24/2016
  • 3 Month LIBOR 0.62%
  • Weighted Avg Price 97.18
*Applies to loan portion only

Fund Details

  • Fund Ticker BKLN
  • CUSIP # 73936Q769
  • ISIN US73936Q7694
  • Intraday NAV BKLNIV
  • Index Ticker SPBDLL
  • Index Provider S&P Dow Jones Indices LLC
  • Management Fee 0.65%
  • Total Expense Ratio 0.65%
  • Marginable Yes
  • Short Selling Yes
  • Options Yes
  • Exchange NYSE Arca
  • Inception Date 03/03/2011
  • NAIC Designation 4
  • # of Holdings 118
    as of 06/27/2016

SVO Disclosure

The Securities Valuation Office of the National Association of Insurance Commissioners (NAIC) assigns credit quality designations to securities held by state-regulated insurance companies. NAIC Designations are opinions of credit quality that range from NAIC 1, being the highest quality, to NAIC 6, being the lowest quality. “P” is a valuation indicator used to classify perpetual preferred stock. NAIC Designations allow fixed-income ETFs to be reported as bonds and are used to set Risk-Based Capital (RBC) requirements. NAIC designations only measure credit risk and do not measure other risks or factors that may affect repayment, such as volatility/interest rate, prepayment, extension or liquidity risk.

Preliminary NAIC Designation Disclosure:

Preliminary NAIC Designations are the intellectual property of the National Association of Insurance Commissioners (NAIC) and are redistributed here under License. A Preliminary NAIC Designation is an opinion of the NAIC Securities Valuation Office (SVO) of the probable credit quality designation that would be assigned by the SVO to an investment if purchased by an insurance company and reported to the SVO. A Preliminary NAIC Designations is only one of the regulatory factors considered by the SVO as part of its analysis of probable regulatory treatment under the Regulatory Treatment Analysis Service. A full discussion of such other regulatory factors is set forth in the RTAS Letter provided to Invesco PowerShares Capital Management LLC. A Preliminary NAIC Designation cannot be used to report the ETF to state insurance regulators. However, the purchasing insurance company may obtain an NAIC Designation for the ETF by filing the security and final documents for the ETF with the SVO. The indication of probable regulatory treatment indicated by a Preliminary NAIC Designation is not a recommendation to purchase the ETF and is not intended to convey approval or endorsement of the ETF Sponsor or the ETF by the NAIC.

Official NAIC Designation Disclosure:

NAIC Designations are the intellectual property of the National Association of Insurance Commissioners (NAIC) and are redistributed here under License. An NAIC Designation is a proprietary symbol used by the NAIC Securities Valuation Office (SVO) to denote a category or band of credit risk (i.e., the likelihood of repayment in accordance with a written contract) for an issuer or for a security. NAIC Designations may be notched up or down to reflect the position of a specific liability in the issuer’s capital structure and/or the existence of other non-payment risk in the specific security. Under NAIC reporting rules, shares of an ETF are presumed to be reportable as common stock. The SVO may classify an ETF as a bond or preferred stock and assign it an NAIC Designation if it meets defined criteria. For a discussion of these criteria please call the SVO or refer to the Purposes and Procedures Manual of the NAIC Securities Valuation Office. The assignment of an NAIC Designation is not a recommendation to purchase the ETF and is not intended to convey approval or endorsement of the ETF Sponsor or the ETF by the NAIC.

as of 06/27/2016

Quick Facts

  • Previous Close $22.81
  • Open $22.79
  • Today's High $22.80
  • Today's Low $22.69
  • Today's Volume 3,724,838
  • 52 Week High $23.96
  • 52 Week Low $21.75
  • Shares Outstanding 197.70MM
  • Market Value $4,499.4MM