PowerShares has about 50 domestic and a dozen international sector funds. The ETFs offered in this line are actively managed, with a broker picking the stocks. PowerShares industry sector offerings include the following:
| U.S. Sector Fund Name | Ticker |
|---|---|
| PowerShares Dynamic Biotechnology & Genome | PBE |
| PowerShares Dynamic Building & Construction | PKB |
| PowerShares Dynamic Energy & Exploration | PXE |
| PowerShares Dynamic Food & Beverage | PBJ |
| PowerShares Dynamic Hardware & Consumer Electronics | PHW |
| PowerShares Dynamic Insurance | PIC |
| PowerShares Dynamic Leisure & Entertainment | PEJ |
| PowerShares Dynamic Media | PBS |
| PowerShares Dynamic Networking | PXQ |
| PowerShares Dynamic Oil & Gas Services | PXJ |
| PowerShares Dynamic Pharmaceuticals | PJP |
| PowerShares Dynamic Retail | PMR |
| PowerShares Dynamic Semiconductors | PSI |
| PowerShares Dynamic Software | PSJ |
| PowerShares Dynamic Telecommunications & Wireless | PTE |
| PowerShares Dynamic Utilities | PUI |
| PowerShares Lux Nanotech | PXN |
| PowerShares Aerospace & Defense | PPA |
| PowerShares WilderHill Clean Energy | PBW |
| PowerShares Water Resources | PHO |
| Global Sector Fund Name | Ticker |
|---|---|
| PowerShares Global Coal Portfolio | PKOL |
| PowerShares Global Nuclear Energy | PKN |
| Powershares Global Steel Portfolio | PSTL |
| PowerShares Global Wind Energy Portfolio | PWND |
On the down side, PowerShares charges 0.60 percent for its domestic offerings and 0.75 percent for its global funds: That’s a whole lot more than most of the competition is charging or would dare charge.
The funds are also “dynamic,” which means that the indexes they track are actively managed (someone somewhere is picking stocks). Many investors would see that as a plus. However, it means added expense (both up front and behind the scenes) and a possible loss of tax efficiency. On the upside, however, PowerShares’ selection of industry groupings, in both their U.S. and global offerings, has been innovative, to say the least.
Although it’s not a good idea to build an entire portfolio of PowerShares sector ETFs, if you’re looking to sprinkle some noncorrelating holdings into an otherwise well-diversified portfolio, PowerShares may have something to offer.
Especially intriguing are the WilderHill Clean Energy ETF (PBW) and the Water Resources ETF (PHO). Investing in companies that provide alternative fuels and the filtration and delivery of drinking water respectively, these two ETFs, so far, seem to have sweetly low correlations to the broad market.