PowerShares’ S&P 500 BuyWrite ETF Crosses One Year Mark, Outperforming S&P 500

Invesco PowerShares Capital Management LLC, a leading provider of exchange-traded funds (ETFs), yesterday (Monday) announced the one year anniversary of its S&P 500 BuyWrite Portfolio (PBP). Since its inception (as of 12/20/07), PBP has outperformed the S&P 500 Index (^GSPC) by a cumulative 7.10%.   In April 2008, PBP was recognized at the Capital Link Forum on Closed End Funds and ETFs with The Award for Most Innovative New ETF in 2007, due to its unique ability to provide efficient access to a buy-write options strategy on one of the most widely used benchmarks in the world - the S&P 500 Index.

“In December of 2007 we launched PBP, the first ETF to make significant use of options strategies, and now - one year later - we are able to celebrate the relative outperformance PBP has brought its investors,” said Bruce Bond, president of Invesco PowerShares. “We believe a buy-write strategy can be used to reduce volatility and enhance portfolio returns, and this past year’s volatility has been a boon for PBP, as it has outperformed nearly every major broad U.S. stock index.”¹

The buy-write strategy, also called a “covered call” strategy, is an investment strategy in which an investor or advisor buys a stock or a basket of stocks and sells (”writes”) call options that cover the stock position. This allows investors to gain income and a small cushion of protection through the sale of covered call options - in exchange for some upside potential on their stock or portfolio position. PBP was designed to provide investors this strategy within the convenient, cost-effective ETF framework.  The CBOE S&P 500 BuyWrite Index, on which the ETF is based, was originally created by the Chicago Board Options Exchange (CBOE), the world’s first options risk-management marketplace and one of the largest securities exchanges in the world. In 2004 the Index was awarded the Most Innovative Benchmark Index of the year by Information Management Network (IMN).

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