Invesco to launch residential MBS-centered ETFS

Invesco PowerShares Capital Management LLC has filed registration statements for two actively managed exchange traded funds focused on the non-agency prime and Alt-A residential-mortgage-backed securities markets. The funds will be named the PowerShares Prime Non-Agency RMBS Opportunity Fund and the PowerShares Alt-A Non-Agency RMBS Opportunity Fund “We believe that various economic factors have converged to push the prices of many Prime and Alt-A residential-mortgage-backed securities well below their fundamental values,” Bruce Bond, president and chief executive of Wheaton, Ill.-based Invesco PowerShares, said in a statement. “We are hopeful that these ETFs will provide access and transparency into these markets.” Prime residential mortgage loans are extended to borrowers who represent a relatively low-risk profile and a strong credit history. Alt-A loans are made to borrowers whose risk profile falls between prime and subprime. The PowerShares Prime Non-Agency RMBS Opportunity Fund will seek to provide total return by investing at least 80% of its assets in non-agency mortgage-backed securities collateralized by pools of prime residential mortgage loans. The PowerShares Alt-A Non-Agency RMBS Opportunity Fund will seek to provide total return by investing at least 80% of its assets in non-agency mortgage-backed securities collateralized by pools of Alt-A residential mortgage loans.