PowerShares Capital Management LLC has created an Emerging Markets Sovereign Debt Portfolio to begin trading in October 2007. This new exchange-traded fund (ETF) is designed to provide investors with access to a more difficult-to-reach asset class. Investors who seek a convenient, low-cost approach to investing in emerging markets sovereign debt securities may find the portfolio suitable for long-term investing, asset allocation, and usable as a risk control tool.
The ETF provides the benefits of liquidity and tax efficiency. The portfolio is based on the Deutsche Bank Emerging Markets USD Liquid Balanced Index which tracks the performance of a select group of liquid emerging market US dollar-denominated government bonds. Countries eligible for inclusion in the index will be evaluated annually and membership will be optimized on a quarterly basis based on ratings, size, liquidity, and other considerations.