PRZOOM - /newswire/ -
Williamstown, MA, United States, 2008/09/12 - As stocks struggle to regain their footing in volatile market conditions, PowerShares Momentum Tracker identified one successful sector in their publication today.
“The consumer staples sector has been surprisingly resilient, even as other sectors wax and wane in the face of increased market volatility,” said PowerShares Momentum Tracker publisher Don Dion. “In 2008, however, PSL’s losses have been smaller and its subsequent rebound more substantial,” Dion added.
While the retail sector scales back prices to meet newly curtailed budgets nationwide, some investors have begun to bargain hunt among the consumer staples equities hit hard by recent market woes. In a reflection of the sector that it is designed to track, the PowerShares Dynamic Consumer Staples Fund has gained momentum in recent months, helping the fund outperform the S&P 500 benchmark index by 2.74% in the week ending September 8.
Since its debut in October of 2006, PSL has experienced many of the pullbacks that have plagued the broader market. According to Morningstar, PSL’s market return has outperformed the S&P 500 by more than 6% in the three months ending September 8, while the year-to-date return shows the fund outperforming the S&P by more than 10%. PSL’s returns have helped the fund to improve its standing on Dion’s PowerShares Momentum Tracker sector rankings from the 30th position at the end of July to the 15th position on September 9.
Designed to track the Dynamic Consumer Staples Sector Index, PSL comprises equities that demonstrate the greatest capital appreciation potential based on the index’s investment criteria: fundamental growth, stock valuation, investments and risk factors. This methodology allows for a broad range of equity size—large-cap equities composing 48% of the fund, mid-cap equities composing 25% and small-cap stocks making up the remaining 27%. This type of diversification is helpful to many investors who hope to cushion their sector exposure against the headlines of any one large-cap holding.
“Despite the range of equity size, PSL’s portfolio is distributed conservatively among its 60 components,” noted Dion. Rather than concentrating the fund’s exposure in the top components, PSL places less than 3% in any single equity. The fund’s top 10 components compose only 26% of the fund’s holdings. “This allocation is comforting to some investors,” Dion said, “the combination of a relatively small number of holdings—just 60—and wide range of depth in allocation style could make the fund appropriate for investors looking to capture a broad swath of the consumer staples market.”
PowerShares Momentum Tracker is a member of Fidelity Independent Adviser’s family of financial publications. With more than 70,000 subscribers in the United States and 29 other countries, Fidelity Independent Adviser publishes four monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.
Publisher Don Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Massachusetts, Dion Money Management manages more than $720 million in assets for clients in 49 states and 11 countries. A licensed attorney in Massachusetts and Maine, Mr. Dion has more than 25 years’ experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.